Improved formulations developed through incremental innovation not to be included in Schedule I to DPCO 2013; NPPA decision to include CEFTAS 400 set aside

Delhi High Court: A Single Judge Bench comprising of Vibhu Bakhru, J. allowed a writ petition filed against the order of National Pharmaceuticals Pricing Authority (NPPA) demanding a sum of Rs 86,66,045.

The said demand was founded on the basis that the petitioner INTAS has sold its CEFTAS 400 tablets at a price in excess of ceiling price fixed for CEFIXIME 400 mg tablets which are included in Schedule I to Drugs (Price Control) Order, 2013. The petitioner claimed that even though CEFTAS contains CEFIXIME, it is not included in Schedule I and is not a scheduled formulation. It is so because CEFTAS is a dispersible tablet which is a novel formulation completely distinct and separate from conventional CEFIXIME tablet. The question before the Court was whether CEFTAS is included in Schedule I to DPCO 2013.

The High Court perused Paragraph 8(1) DPCO which provides what is a maximum retail price; sub-clause (zb) of Paragraph 2(1) which defines a scheduled formulation. It was observed that principal objective of the National Pharmaceuticals Pricing Policy, 2012 is to put in place a regulatory framework for pricing of drugs so as to ensure availability of essential medicines at reasonable prices. Reference was also made Explanation (2) to Schedule I titled Innovation in medicines must be encouraged. In the opinion of the Court, it was apparent from the explanation that improved formulations developed through incremental innovation involving technology for overcoming disadvantages associated with conventional forms would not be read as included in the National List of Essential Medicines, 2015 which is appended to Schedule I of DPCO 2013. On a plain reading of the order impugned, the Court held that NPPA proceeded on the basis that irrespective of the incremental innovation or the novelty of drug delivery system, all versions of the formulations would be included. The contention was erroneous and unsustainable. As such, the Court set aside the order impugned and directed NPPA to examine whether the different delivery system, as claimed by INTAS, was a substantial improvement with significant therapeutic advantages so as to consider the product materially different from a conventional version. The petition was disposed of in the terms above. [INTAS Pharmaceuticals Ltd. v. Union of India, 2018 SCC OnLine Del 11328, dated 17-09-2018]

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