Formulation manufacturers in Chennai are in a dilemma following the verdict of the Karnataka High Court which ordered, under the provisions of the DPCO, 1995, that prices should be revised within 15 days even in regard to the formulations which were manufactured prior to the date of notification or those manufactured within 15 days from the date of notification.

The NPPA has directed 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 and ensure that the stocks are sold after the stipulated period only at the prices fixed by the NPPA.

Pharma companies say that they are ready to comply with the NPPA direction but have two problems. One, if they recall the stock from the market there is no guarantee that all the stocks would come back to them. Secondly, the question of who will bear the cost of recall of stocks. The sources contend that the NPPA directive may lead to a confrontationist approach from pharmaceutical companies.

The sources state further that such sudden announcement by NPPA should be avoided in future given the fact that stocks move out of the company's warehouses much faster and that they are shipped to different corners of the country. “Even if we were to recall the stocks, stocks from farthest destination may take more time to reach the company which means the revised pricing cannot be done as is being expected by the NPPA. There are also chances that formulations could also be sold during the recall period. What will further cause problem to the companies is that there would be interruptions in the business while recalling the stocks from the market,” said a senior official of a leading pharmaceutical company in Chennai.

They further claim that bringing down the price would be a difficult task as the bulk drug used in for the formulation has been purchased at a higher price than the NPPA recent notification. “We have been charged higher and there is no way that the bulk drug company can recall the bulk drug already used in the manufacture of formulations,” claims the senior official, who further claimed that the 15 days time given would not be sufficient in most cases.

On the other hand, the bulk drug manufacturers also echo the same problems. They contend that they cannot recall the stocks sold to a formulation company which has already made use of for a formulation. “We can bring down the price of the bulk drug which has not been sold to the formulation companies, but what about the bulk drug which has already been sold and used in the manufacture of pharmaceutical formulations,” a source maintained.