SC allows Centre's plea on retail & ceiling prices of drugs

In a blow to pharma majors like Cipla and Dr Reddy's Laboratories, the Supreme Court today held as valid the government notification fixing retail and ceiling prices of formulations which were allegedly violated by the companies.
A bench comprising Justices M B Lokur and R K Agrawal allowed the appeal of the Centre against the decisions of various High Courts which had held that the notification dated July 13, 1999 issued by it under provisions of Drugs (Prices Control) Order, 1995 were issued mechanically and without any application of mind.
The provisions related to prescribing the norms for conversion cost, packing charges and process loss of raw materials (other than packing materials in conversion), packing and process loss of packing materials in packaging.

Cipla Ltd had got a favourable decision from the Allahabad High Court, the consequence of which was that about 40 notifications fixing the retail and the ceiling price of formulations had been invalidated.
Other companies had succeeded from the High Courts of Punjab & Haryana and Karnataka.
Dr Reddy Labs filed the appeal against the decision of the Andhra Pradesh High Court which had found the Centre's notifications in order.

The apex court held that notifications of July 12, 2000, 2001, 2002 and July 11, 2003 issued by the Centre under the provisions of the Drugs (Prices Control) Order, 1995 re-notifying the norms prescribed on 13th July, 1999 were neither issued mechanically nor without any application of mind.

It also held that it was not necessary to re-determine the norms every year.
The court also answered in affirmative that Centre's notifications fixing the retail price or ceiling price of formulations under the law are valid.