Zenotech sues DAE, Tata hospital on drug supply row

Mumbai, May 24 | Updated: May 25 2007, 07:01am hrs
The government of India has been dragged into a legal row between a drug manufacturing company and a Mumbai-based hospital over placing supply order for cancer drugs for a period of two years. Zenotech Laboratories, a Hyderabad-based small sized biotech company, has filed a suit against the secretary of the Department of Atomic Energy (DAE), and the director and purchasing officer, Tata Memorial Centre, alleging arbitrary rejection of the companys quotation submitted for supplying cancer drugs to the hospital. DAE is responsible for managing the hospital since 1962.

The company, in its writ petition filed under Article 226 in the High Court of Mumbai on Thursday, alleged that even though it has offered the lowest rates for the supply for various cancer drugs, other domestic companies which quoted higher rates, have been awarded the supply orders. The companies who won the bids have also been served with the notices.

We want the action of the respondents be declared as being illegal, arbitrary and violative of the principles of natural justice and hence unconstitutional and consequently direct the respondents to award the contract to the petitioner, says Jay Chigurupati, CEO, Zenotech, in its petition filed.

Rekha Batura, assistant medical superintendent, Tata Memorial Centre, told FE, So far, we have not taken any final decision on the supply order and hence, we have not given the order to any particular company. We are not obliged to give the order only on the basis that the drugs are the cheapest. The suggestion of expert doctors having years of experience in the profession on the effectiveness of the drugs submitted during tenders is also one among the criteria.

In the case of molgramostim 400 mg, Zenotech is the only manufacturer in India and yet it has not been considered. In the case of docetaxel, the awardee does not have a manufacturing facility for the drug, he added.

In February, Ranbaxy had signed a pact with Zenotech for generic filgrastim.