Case: M/S T.C.HEALTHCARE P. LTD Vs. UNION OF INDIA

excise duty. ************** 8(4). Any manufacturer, who desires revision of the retail price of a formulation fixed under sub- paragraph (1), shall make an application to the, Government in Form III or Form IV, as the case maybe, and the Government shall after making such enquiry, as it deems fit within a period of two months from the date of receipt of the complete information, fix a revised price for such formulation or reject the application for revision for reasons to be recorded in writing. ************** 8(6) No manufacturer or importer shall market a new pack, if not covered under sub-paragraph 3 of para 9, or a new formulation or a new dosage form of his existing Scheduled formulation without obtaining the prior approval of its price from the Government. 9. Power to fix ceiling price of Scheduled formulations: 1. Notwithstanding anything contained in this Order, the Government may, from time to time, by notification in the Official Gazette, fix the ceiling price of a Scheduled formulation in accordance with the formula laid down in paragraph 7, keeping in view the cost or efficiency, or both, of major manufacturers of such formulations and such price shall operate as the ceiling sale price for all such packs including those sold under generic name and for every manufacturer of such formulations. 2. The Government may, either on its own motion or on application made to it in this behalf by a manufacturer in Form III or Form IV, as the case may be, after calling for such information as it may consider necessary, by notification in the Official Gazette, fix a revised ceiling price for a Scheduled formulation. 3. With a view to enabling the manufacturers of similar formulations to sell those formulations in pack size different to the pack size for which ceiling price has been notified under the sub- paragraphs (1) and (2), manufacturers shall work out the price for their respective formulation packs in accordance with such norms, as may be notified by the Government from time to time, and he shall intimate the price of formulation pack, so worked out, to the Government and such formulation packs shall be released for sale only after the expiry of sixty days after such intimation. ************** 13. Power to recover Overcharged Amount: Notwithstanding anything contained in this order, the Government shall by notice, require the manufacturers, importers or distributors, as the case maybe, to deposit the amount accrued due to charging of prices higher than those fixed or notified by the Government under the provisions of Drugs (Prices Control) Order, 1987 and under the provisions of this Order. 9. The appellants argue before this court, that the High Court erred in overlooking that the sustained release and continuous release technologies used in their products had not been made the subject of any price fixation norm. Therefore, the price fixation resorted to in their case was contrary to law. The learned senior counsel appearing on their behalf submitted that the High Court had fallen into error in this regard, and consequently, its decision requires to be set aside. 10. The High Court, in the impugned judgment, we notice, had taken note of the notification dated 13 th August, 2008, which fixed conversion costs for plain tablets, coated tablets, dispersible tablets, gelatin coated tablets, bi layered tablets, sustained release tablets, chewable tablets, effervescent tablets, inlay tablets, capsules and other drugs. The appellants had not urged that different conversion costs were fixed for controlled release system, or the continuous release systems, anytime. In these circumstances, it was held that the pricing norms were applicable. The court also extracted Note (d) to the notification of 30 th April, 2009, which pertinently stated that: (d) For different packing materials used or different drug delivery systems or any other special features/forms claimed, the ceiling prices, as specified in Column 5 above, shall be applicable unless the companies approach NPPA for specific price approvals for its formulations 11. In this case, the appellants did not approach NPPA for specific price, or contend before it that their products contained special features. On the other hand, the allusion to sustained release and drug delivery systems (in Note (d)) clearly contemplated that unless otherwise specifically sought- in regard to particular drugs, the price fixation norms applied to all. 12. According to pharmacopedias and the US Food and Drug Administrations definitions, modifications in drug release are often desirable to increase the stability, safety and efficacy of the drug, to improve the therapeutic outcome of the drug treatment and/or to increase patient compliance and convenience of administration. In that context, the use of the term sustained release denotes the systems that maintain the rate of drug release over a sustained period. For example, if the release of the drug from the dosage form is sustained such that the release takes place throughout the entire gastrointestinal tract, one could prolong the time interval of drug concentration in the therapeutic range. This in turn may reduce the frequency of dosing, for example from three times a day to once a day. Sustained-release dosage forms achieve this mostly by the use of suitable polymers, used either to coat granules or tablets (reservoir systems) or to form a matrix in which the drug is dissolved or dispersed (matrix systems). Controlled release systems are drug delivery systems in which the drug is released in a predetermined pattern over a fixed period of time. Therefore, the materials on the record show that the DPCO was aware of the existence of different systems of drug delivery; it specifically talked of sustained release. If the appellants wished to say that the systems used by them were unique or different, it was open for them to have so demonstrated. Their omission to do so, did not in any way affect their obligation to follow the pricing norms and ceiling prices fixed by the impugned notifications. This court, therefore, sees no reason to differ from the conclusions and findings of the High Court.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]10. The High Court, in the impugned judgment, we notice, had taken note of the notification dated 13 th August, 2008, which fixed conversion costs for plain tablets, coated tablets, dispersible tablets, gelatin coated tablets, bi layered tablets, sustained release tablets, chewable tablets, effervescent tablets, inlay tablets, capsules and other drugs. The appellants had not urged that different conversion costs were fixed for controlled release system, or the continuous release systems, anytime11. In this case, the appellants did not approach NPPA for specific price, or contend before it that their products contained special features. On the other hand, the allusion to sustained release and drug delivery systems (in Note (d)) clearly contemplated that unless otherwise specifically sought- in regard to particular drugs, the price fixation norms applied to allTherefore, the materials on the record show that the DPCO was aware of the existence of different systems of drug delivery; it specifically talked of sustained release. If the appellants wished to say that the systems used by them were unique or different, it was open for them to have so demonstrated. Their omission to do so, did not in any way affect their obligation to follow the pricing norms and ceiling prices fixed by the impugned notifications. This court, therefore, sees no reason to differ from the conclusions and findings of the High Court.