Let down by the Supreme Court and faced with the threat of an imminent notice from the National Pharmaceutical Pricing Authority (NPPA) seeking huge amounts totaling about Rs 140 crore towards recovery of overcharged amount, the drug manufacturers, producing and marketing preparations of salbutamol, theophylline, cyproflaxacin, Norfloxacin, cloxacillin, dozycycline and glipizide are thinking of possible options to avoid an immediate remittance of the amount.
Though industry sources think that companies have fewer chances for avoiding the payment this time, they feel that these companies may either go for a review petition in the SC or seek more time and try to make payments in installments. Much would depend upon what decision would be taken by Cipla, which alone has to remit a good share of the total amount.
The SC Order had looked into the DPCO in its entirety and had observed that the government, while classifying the drugs for purpose of price control, should not flout or debilitate the set norms it professed to follow in the interest of transparency and objectivity. "The expression of turnover in the Drug Policy 1994 represents the sale value of bulk drug sold as such or in the form of formulations. Export sales should not be taken into account while computing turnover. The sum total of production and imports of bulk drugs cannot be equated to turnover, though they are not altogether irrelevant in calculating the turnover", SC said. The court also felt that ORG data does not give exhaustive account of turnover of bulk drug. However, it supported the government stand on considering single ingredient formulators alone for the purpose of calculating the turnover.
Scrutinizing the HC observations on each of the seven bulk drugs, the SC felt that the dispute over Theophylline was confined to the number of formulators and the meaning of the word "formulator" as understood by the government. In the case of Cloxacillin, the SC observed that there is a controversy regarding the number of formulators and their market share that need to be looked into. The Apex Court found the HC verdict on cyproflaxacin to be erroneous as the number of bulk drug manufacturers and formulators mentioned by the court was different from the data submitted by the petitioners. The SC pointed out the absence of data and dispute over actual turnover in the case of other drugs too.
The SC wanted the Mumbai High Court to consider afresh the relevant aspects concerning the criteria laid down in the Drug Policy 1994 in relation to each drug having due regard to the observations made in the judgment. It also ordered for a stay on 50 per cent of the overcharged amounts subject to the payment of remaining 50 per cent within the period of four weeks from the date of communication of the amount payable to the companies.
The industry associations like IDMA and BDMA are known to be not so enthusiastic in aligning with the issue at present. The associations are also watching the next move from individual units which are affected.