Pharma major Glaxo India, which was asked by the Supreme Court to pay Rs.71.21 crore to the Government in a 20-year-long battle over pricing recently, has said it was still reviewing the verdict and would decide the future course of action based on the legal opinions.


Without specifying on whether it would go for review petition, a spokesperson from the GSK said: “We are reviewing the contents of the Supreme Court judgement and will take necessary steps as may be legally advised. GSK is committed to operating with the highest ethical standards and will comply with all applicable legal requirements.”


The Supreme Court on April 4 had allowed the appeal by the Government and asked GSK to pay Rs.71.21 crore, ending a two-decade long dispute over pricing of drugs scheduled under the Drug Price Control Order (DPCO). The dispute was over the pricing of -- Betamethasone Alcohol, Betamethasone 17 valerate and Betamethasone di Sodium Phosphate -- formulation used for manufacturing medicines for skin-related problems and fungal infection.


The Government had filed that appeal against verdict of the Delhi High Court in 1991. The HC had rejected the demand by the government to pay Rs.71.21 crore in DPEA for charging more from customers between May 1981 and August 25, 1987.


The Supreme Court, thus, now allowed the appeal of the Government and struck down the HC verdict as “illegal and arbitrary.” The bench of Justice R V Raveendran and Justice H L Dattu said the Government had the right to recover the amount difference between the retail price at which GSK was selling the particular product to customers and the price fixed under DPCO.


“We allow this appeal and set aside the order passed by the High Court and, thereby, we confirm the demands raised by the Central Government,” the bench said. The apex court further held that if price of such bulk drugs is notified as lower in DPCO than the price allowed to the manufacturer, the Central Government may direct “manufacturer of formulation (on) the excess amount determined, to be deposited into DPEA.”


By bringing a new DPCO in 1979, the government had brought these drugs under the scheduled list and fixed the price. This was challenged by Glaxo before the Delhi High court, where it contended that before fixing the price, the government had not taken into account the cost of production of bulk drugs as was the requirement. The High Court in August 1981 stayed the drug prices fixed under DPCO and asked the government and Glaxo to go for a settlement.


Pursuant to that, government brought another notification in 1986 and fixed the prices. However, it was still lower than the prices on which the Glaxo was selling the scheduled formulations since 1981. The government then in June 1990 asked Glaxo to deposit Rs.71.21 crore in DPEA for charging more from customers between May 1981- August 25, 1987.