Bombay High Court quashes NPPA pricing order and blocks recovery demand

The Bombay High Court has quashed a 2009 notification issued by the National Pharmaceutical Pricing Authority (NPPA), ruling that the agency cannot impose blanket price ceilings on medicinal formulations without following the specific mechanisms prescribed under the Drugs (Price Control) Order, 1995 (DPCO 1995).

The ruling specifically impacts Pharmed Limited regarding its osteoarthritis treatment, Cartigen Forte. The court set aside a recovery demand of Rs 13.41 crore that the NPPA had sought from the company. The dispute centered on whether the NPPA could apply existing ceiling prices for multivitamin and mineral tablets to Cartigen Forte simply because it contained scheduled drug ingredients.

A division bench consisting of Justice Manish Pitale and Justice Shreeram V. Shirsat determined that the NPPA's 2009 notification was ‘ultra vires’ the DPCO 1995. The court noted that while the NPPA has the authority to fix prices when manufacturers fail to submit required information, it must calculate those prices and notify them in the official gazette according to the factors provided for in the DPCO.