Pharmaceutical companies in Tamil Nadu whose licence were due for renewal on and before December 31, 2002, have been able to renew their licences at the old rates. This has been possible following a Madras High Court verdict staying the Union government order of increasing the licence fees. The verdict was delivered on 26 December 2002.
According to the old rates, the licence fee stood at Rs.7,500 while the increased rate effective from 2001 was Rs.15,000. The Pharmaceutical Manufacturers Association of Tamil Nadu (PMA) had contested the hike and had filed a petition in the Madras High Court for granting a stay on the hike. The Madras High Court favoured the PMA in its verdict delivered in 2001.
Tamil Nadu along with Karnataka and Madhya Pradesh are the states where the companies have been able to renew their licences at the old rates instead of the new ones as announced by the Union government in 2001.
Following the Madras High Court verdict, the Drug Control Administration (DCA) of Tamil Nadu has suffered losses in revenue as compared to their counterparts in other states barring Karnataka and Madhya Pradesh. Official sources, however, did not reveal the loss in revenue following the High Court verdict.