The drug pricing regulator’s decision on February 27 to cap the maximum trade margin for 42 life-saving cancer medicines at 30 per cent — a move to make the cancer treatment affordable — has been challenged in the Karnataka High Court by a private hospital group, which runs 20 cancer care centres across the country.
According to the government, the National Pharmaceutical Pricing Authority (NPPA)’s decision, which came into effect on March 8, has resulted in the drop of prices of up to 85 per cent of 105 brands, including the critical breast cancer injection drug.
Healthcare Global Enterprises Limited has challenged the NPPA decision, stating that the regulator “usurped jurisdiction illegally under the garb (of) public healthcare and interest”. The petition is first official challenge of the order passed by the pricing regulator.
The Karnataka High Court will hear the matter on April 1.
In a writ filed before the court, the petitioner has sought that the court set aside the NPPA order on two grounds – lack of jurisdiction, and lack of extraordinary circumstances. It has said that Drug (Prices Control) Order, 2013 – known by its acronym DPCO – does not allows the regulator to cap the trade margins of non-scheduled drugs as they are not considered to essential.
“The DPCO only allows for fixation of ceiling prices in respect of schedules formulations and in the formula allowed thereof. There is no provision to fix prices, or trade margins, in respect for non-scheduled drugs as the same are not considered to be essential, and therefore be subject to market forces,” the petition states.
The petitioner has also claimed that the “only power” allowed in respect of non scheduled formulation is the “power to monitor”.
“The impugned order has been made under Paragraph 19 of the DPCO, which…only allows for the setting of a ‘ceiling price’ or a ‘retail price’, and not a ‘trade margin’. Furthermore, a ceiling price only corresponds to scheduled formulations where a retail price corresponds to the pricing of new drugs. The imposition of a ‘trade margin’, is therefore, beyond the scope of powers delegated to the DPCO,” the petition states.
The petitioner has said that the NPPA has “conflated the issue of costs of hospitalisation and other incidental measures in the treatment of cancer” in order to “assume the prevalence of ‘extraordinary circumstances’”
“The drugs listed in Table B of the Impugned Order are neither in the ‘list of Essential Medicines’ nor form part of the Schedule to the DPCO, indicating that they are, therefore, not critical to the treatment of any disease, let alone cancer and ought not, therefore, (be) subject to price control,” the petition states.
It has also claimed the NPPA has “failed to apply their mind to the true facts and circumstances prevalent in the market” and have instead “proceeded on… conjecture and incorrect data”.
“The impugned order offers no clarity on whether the ‘trade margins’ are applied only in respect of those non-scheduled formulation of drugs listed in Trade B for the sole purpose of cancer treatment, or whether the same would apply regardless of the nature of illness treated,” the plea states.