Supreme Court terms drugs policy 'unreasonable', asks Centre to re-look

The Supreme Court on Wednesday termed the National Pharmaceutical Pricing Policy and the Drug Price Control order 2013 as "unreasonable and irrational" and asked the government to reconsider aspects like the formula to fix prices, and then pass a "reasoned" order.

"The Centre's drug pricing policy seems to be unreasonable and irrational for fixing prices at the very high level," a three-judge bench headed by Justice T S Thakur said.

The bench, which also comprised Justices V Gopala Gowda and R Banumathi, asked the Department of Pharmaceuticals of Union Ministry of Chemicals and Fertilizers to pass a "reasoned" order on the representation of NGO, All India Drug Action Network, on the issue within six months after hearing all parties concerned. It also asked the Centre to file a copy of its decision on the representation of NGO which would file it in six weeks.

One of the five issues to be considered relates to NGO's plea that MBP (Market Based Pricing) was never used for any price regulatory purposes and under the new policy, simple average ceiling prices were, in many cases, higher than the market leader price.

"You (Centre) are fixing the maximum price of a medicine above the retail price of the leading company of the same drug. It is absurd," the bench observed during the hearing.

The NGO has also sought inclusion of more life-saving medicines of diseases like diabetes and tuberculosis in the list of drugs whose prices would be regulated by the government. It also said that the price control must extend to various "dosages, strength and combinations".

At the outset, the bench, however, expressed reluctance to enter into the territory of drug pricing policy of the government saying "this is not an easy area for the courts to intervene and it is very difficult for a court to sit in judgement in such kind of policy matters."

The court was hearing a PIL filed by NGO All India Drug Action Network alleging that the MBP was never used for any price regulatory purposes and this was making medicines costlier. 

Earlier, the court had issued the notice to the Centre on the plea against National Pharmaceutical Pricing Policy to fix the ceiling price of essential medicines on the basis of market rates.

The petition had said that under the new policy, the profit margin for drug manufacturers and dealers has become in the range of 10-1300 per cent. It has sought a direction to the government to continue with cost-based ceiling prices of all essential drugs. It also contended that the National List of Essential Medicines (NLEM) consisted of only 348 drugs and had left out many essential medicines from price control.

The NGO had sought directions to the government to bring medicines specially used in HIV-AIDS, cancer, mental health, chronic non-communicable diseases like asthma and rheumatoid arthritis, under price control mechanism and pleaded for implementation of the Tamil Nadu model of public procurement to ensure all these essential drugs are available free of cost to those seeking treatment in public health facilities.

Under the Drug Price Control Order (DPCO) 2013, Government controls prices of 348 drugs listed in the NLEM.