M/S. FRANCO INDIAN PHARMACEUTICALS PVT. LTD. AND ANR. v. UNION OF INDIA AND 2 ORS.
DPCO 2013 Interpretation - Ceiling Prices Apply Only to Formulations Specifically Listed in the First Schedule; Sustained-Release Versions Not Automatically Covered by Conventional Drug Listings.
Court: Bombay High Court
Citation: 2026:BHC-OS:9091-DB
Decision Date: 10-04-2026
List of Laws
Drugs (Price Control) Order, 2013; National Pharmaceutical Pricing Policy, 2012; Essential Commodities Act, 1955; National List of Essential Medicines (NLEM); Administrative Law - Arbitrary Exercise of Power
- Facts: The petitioners, a pharmaceutical company and an industry association, challenged demand notices issued by the National Pharmaceutical Pricing Authority (NPPA). The NPPA alleged overcharging for certain drug formulations, specifically "Glyciphage SR 500 mg", which is a sustained-release (SR) version of Metformin. While the plain conventional tablet of Metformin 500 mg was notified with a ceiling price, the SR version was not explicitly listed in the First Schedule of the Drugs (Price Control) Order, 2013 (DPCO 2013). The petitioners argued that SR/CR (controlled release) formulations involve sophisticated technology and are distinct from conventional forms; therefore, unless specifically mentioned in the Schedule, they are "non-scheduled formulations" not subject to the same ceiling price.
- Procedural Posture: The case reached the Bombay High Court through Writ Petitions filed under Article 226 of the Constitution of India. The petitioners sought to quash the demand notices and sought a declaration that formulations not included in the First Schedule of DPCO 2013 cannot be subjected to ceiling price monitoring as scheduled formulations.
- Issue: Whether the NPPA can insist on a ceiling price for drug formulations, such as sustained-release versions, that are not specifically mentioned in the First Schedule of DPCO 2013, even if the base drug is listed.
- Holding: No, the NPPA cannot impose a ceiling price on formulations not specifically included in the First Schedule. The Court quashed the impugned demand notices and held that the interpretation of DPCO 2013 must align with the National Pharmaceutical Pricing Policy 2012.
- Reasoning: The Court reasoned that DPCO 2013 brought a fundamental shift from controlling "bulk drugs" to controlling specific "formulations". Definitions under Paragraph 2 of DPCO 2013 distinguish between "scheduled" and "non-scheduled" formulations based on their presence in the First Schedule. The Court noted that the parent Ministry (Ministry of Chemicals and Fertilizers) and the Ministry of Health had clarified through internal memoranda that modified-release forms are distinct from conventional forms and should not be under price control unless specifically listed. Furthermore, the Government had historically issued separate, specific orders to add SR versions of other drugs to the Schedule, proving that they are not automatically covered by the listing of the conventional drug. The NPPA's attempt to ignore these distinctions was deemed arbitrary and contrary to the express provisions of the DPCO 2013.
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