The Supreme Court on Tuesday dismissed a government appeal on an issue related to the pricing of pharma major Pfizer’s popular cough syrup Benadryl, a brand it no longer owns.
A bench headed by Justice Ranjan Gogoi, while dismissing the appeal, kept the question of law open. It said the government has priced the product that the company was not manufacturing.
Last year, the apex court had stayed the Bombay High Court order that asked the drug price control authority to review its order against the pharma firm. Benadryl was sold by Pfizer to Johnson and Johnson in 2008. The National Pharmaceutical Pricing Authority (NPPA) in September 2007 had slashed prices of Benadryl 100 ml to Rs 38.61 citing “public interest”, after Pfizer had increased the maximum retail price of the medicine by more than the then permissible 20% limit over November 2005, in November 2006. Then, the margin was just 10%.
The government had termed the price increase within a year as unreasonable and had directed the company to follow the price fixed by it. It was mandatory for the company to implement the same and not to charge exorbitant prices by making slight variations in the strength of Diphenhydramine Hydrochloride and sell it with the same brand to gain unjust and unauthorised benefit at the cost of consumer, it stated.
NPPA could force companies to slash their profit margin if they increased prices by over 20% (then) in 12 months to ensure drug costs don’t go unchecked. Pfizer’s review plea against the watchdog’s order was rejected by the minist-ry of chemicals and fertilisers.
Pursuant to this, the Indian arm of the US company had challenged the authority’s price notification and penalty notice in the HC, which had quashed the authority’s order on the technical ground that the same was not passed by the officer who heard the arguments.