In a joint representation to the secretary, department of chemicals and petrochemicals and to the chairman, National Pharmaceutical Pricing Authority (NPPA), IDMA and OPPI have urged to issue of a fresh press note superseding the press note issued on January 17, 2003 to clear the confusion and possible misreading of the communication by drug inspectors all over the country.
In the absence of such a clarification by NPPA, the January 17 press note could be taken as a government order by the officials and others concerned to initiate action against manufacturers, distributors or retailers, the associations said.
After the pronouncement of the judgement by the Karnataka High Court on November 12, 2002 in the case involving SKB, NPPA issued a press note dated on January 17, directing the drug manufacturers to implement the prices in respect of bulk drugs and formulations fixed or notified by NPPA within 15 days of the notification. The press note also wanted the manufacturers to ensure that stocks are sold after the stipulated period only at the prices fixed by NPPA.
The associations said that NPPA had relied solely on the Karnataka High Court judgement and suddenly abandoned the accepted and established view of para 14 to 16 of DPCO, 1995. As per the directions issued by the Supreme Court in such cases, drug manufacturers, distributors and dealers ought to have been joined and given opportunity to be heard before issuing any orders on writ petitions prejudicial to such parties.
They further stated that as clarified by the government on April 28,1979,effect of price control orders issued from time to time by NPPA under DPCO, 1979 was required to be given with reference to batches of production. This practice has been in existence and followed by all concerned including all government departments for implementing price control orders till now. This practice was necessary for due compliance with the requirement of Drug Rules and Excise rules.
Implementation of para 14 and 16 of the c would also cause heavy losses, prejudice to manufacturers, distributors and dealers and may involve them in violations of other statutory penal provisions of DPCO, 1995, Drug Rules and excise regulations.
As per the press note, existing stocks already released or distributed and lying unsold with manufacturers and trade channels with original higher price markings will be required to be sold at the notified lower prices. For distributors or dealers who have already paid for such stocks at higher prices, sale of revised lower prices would result in direct heavy losses. The manufacturers would also stand to lose the difference in excise duty already paid by them at higher rate on stocks already released.
No distributors or retailers would agree to bear such losses by selling at notified prices or risk statutory violations of DPCO provisions by selling at the original price. They would, therefore, insist on manufacturers reimbursing or replacing stocks with the revised prices. This could result in non-availability of several essential formulations in the market when their prices are revised.