Indian manufacturers challenge Drug Price Control Order

A new drug pricing policy that was intended to slash prices of essential medicines is being challenged by some of India’s major pharmaceutical manufacturers. Cipla and Alembic have approached the Delhi High Court and the Gujarat High Court respectively, challenging the provisions of India’s new Drug Price Control Order.

Introduced by the Indian government as a populist move, the new policy prescribes a price cap on 348 medicines based on an arithmetic average of all medicines with a minimum of 1% market share.

Taking a cue from Cipla and Alembic, many other domestic drug majors have decided to challenge India’s new drug price fixation orders. The move is expected to delay introduction of low priced medicines in the market.

While Sun Pharma and the Indian Drug Manufacturers Association as well as the Confederation of Indian Pharmaceutical Industry have approached the Delhi High Court challenging the 45-day time period given to companies for replacing existing stocks, Ipca Labs and multinational drug maker Abbott have filed a review petition with India’s Department of Pharmaceuticals challenging other aspects of the new price regulation.

According to the new notifications, drug companies are required to replace existing stocks in the market with newly priced batches within 45 days of notification. With several companies challenging the rules, however, it is likely that medicines will continue to be available at their earlier prices.

The issue has also come to the notice of the Supreme Court, which is hearing a public interest case alleging that the new policy would result in increased prices for essential and non-essential drugs.