Pricing Row: Sun Pharma, Cipla get relief from Delhi High Court

NEW DELHI: The Delhi High Court, in two separate cases, has asked the government not to take coercive measures against Sun Pharma and Cipla till the next hearing.

The court has also ordered the two companies to furnish price lists of essential drugs they manufacture as mandated under the new Drug Price Control Order (DPCO) to domestic drug distributors and state drug controllers.

The two companies had challenged the government on specific provision under Drug Price Control Order 2013, which mandated pharma companies to ensure that their essential drugs should sport new price labels within a period of 45 days from the date of DPCO.

Since the court has not spelt out explicitly that drug retailers would have to sell at new prices notified under DPCO 2013, companies are interpreting it as a temporary relief till the matter is finally decided or the court takes a different view. "However, by asking the companies to send price lists to distributors and the drug regulator, the court has sent a clear message that the process of implementation of new DPCO is on," a lawyer told ET on condition of anonymity.

This may prompt many more pharma firms to file similar cases in the court. For the first set of 151 essential drugs, prices of which were notified by the national pharma pricing authority on June 14, the new prices mandated by the DPCO 2013 were to kick in from Monday.

"If the petitioner furnishes the price list/supplementary price list in respect of the formulations covered under various price notifications issued under DPCO 2013 and the price lists are distributed to the dealers, the state drug controller and the government, then in that case, the respondent (the government) shall not take coercive measures against the petitioner (drug firm) in respect of the said formulations (essential drugs manufactured by the company)," the court said.

The court issued an order in case of Sun Pharma on Tuesday while in case of Cipla, the order was issued on last Friday. In case of Sun Pharma, the next hearing is scheduled for August 27.

Sun's plea filed by Ajay Bhargava, partner, Khaitan & Co, argued that by forcing the companies to comply within 45 days of price notification, the government was violating the law by not ensuring seamless supply and distribution of essential commodities in the interests of general public.

The firm argued that drug manufacturers exercise no control over drugs already distributed to wholesalers, distributors, stockists and retailers who then own the product as per their contracts.