Bombay High Court
Pfizer Ltd. And Another vs Union Of India And 2 Others on 7 October, 2025
Author: Sarang V. Kotwal
Bench: Sarang V. Kotwal
2025:BHC-OS:17900-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.2519 OF 2018
Pfizer Ltd and another ....Petitioners
Versus
Union of India and
others ....Respondents
-----
Mr. Navroz Seervai, Senior Advocate a/w. Arti Raghavan, Tavleen
Saini i/b. Sujit Lahoti and Associates for the Petitioners.
Mr. Y.S. Bhate, Advocate a/w. Rui Rodrigues, D.P. Singh for the
Respondents.
-----
CORAM : SARANG V. KOTWAL &
SHYAM C. CHANDAK, JJ.
RESERVED ON : 23rd SEPTEMBER 2025
PRONOUNCED ON : 7th OCTOBER, 2025
JUDGMENT :
[PER SARANG V. KOTWAL, J.]
1. Heard Mr. Navroz Seervai, learned Senior Counsel for the
Petitioners and Mr. Y.S. Bhate, learned counsel for the Respondents.
2. The previous orders passed on 6.8.2019, 19.12.2024 and
3.7.2025 indicated that the matter is to be disposed of at the
admission stage. Therefore, with consent of the parties, we have
heard the matter for final disposal at the admission stage.
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3. Hence, Rule. Rule is made returnable forthwith with
consent of the parties.
4. The main three prayers in this Petition are as follows:
(a) That this Hon'ble Court be pleased to issue a writ of
certiorari or a writ in the nature of certiorari or any other
appropriate writ, order or direction under Articles 226 of the
Constitution of India :
(i) calling for the records and proceedings relating to the
show cause notice dated 8th March 2018 (being
Exhibit "AC" hereto) issued by Respondent No.3, and
after going into the validity, legality and/or propriety
of the same, to quash and/or set aside the same;
(ii) calling for the records and proceedings relating to the
letter dated 15th March 2018 (being Exhibit "AD"
hereto) issued by Respondent No.3, and after going
into the validity, legality and/or propriety of the same,
to quash and/or set aside the same;
(iii) calling for the records and proceedings relating to the
impugned demand notice dated 20th June 2018 (being
Exhibit "AI" hereto) issued by Respondent No.3, and
after going into the validity, legality and/or propriety
of the same, to quash and/or set aside the same;
(b) That this Hon'ble Court be pleased to issue a writ of
Prohibition, or a writ in the nature of Prohibition, or any other
appropriate writ, order or direction under Article 226 of the
Constitution of India prohibiting the Respondents by
themselves, their subordinate officers, servants and agents
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from taking any steps in the nature and/or in any manner
acting in furtherance of the impugned show cause notice
dated 8th March 2018, impugned letter dated 15th March, 2018
and impugned demand dated 20th June, 2018 (being Exhibit
"AC", "AD" & "AI" hereto)
(c) That this Hon'ble Court be pleased to issue a writ of
Mandamus, or a writ in the nature of Mandamus, or any
other appropriate writ, order or direction under the provisions
of Article 226 of the Constitution of India against the
Respondents :
i. Ordering or directing Respondent No.3 to rectify the
IPDMS so as to recognise the subject formulation as a
non-scheduled formulation in the IPDMS:
ii. Ordering or directing the Respondent No.3 to forthwith
withdraw the (I) impugned show cause notice dated 8 th
March, 2018 (being Exhibit "AC" hereto), (ii) the
impugned letter dated 15th March 2018 (being Exhibit
"AD" hereto), and (iii) the impugned demand notice
dated 20th June 2018 (being Exhibit "AI" hereto)".
5. Learned Senior Counsel for the Petitioners submitted that
he is not pressing prayer clause (a)(ii) concerning the letter dated
15.3.2018 being Exhibit-AD of the Petition. Prayer clause (b)
depends on prayer clause (a). He is not pressing prayer clause (c)(i);
and prayer clause (c)(ii) is almost similar to prayer clause (a).
Therefore, in this Petition, we are considering the prayer clauses (a)
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(i) and (a)(iii) only.
6. We have heard learned counsel for the parties for
deciding the validity of those notices and the letters annexed at
Exhibits-'AC' & 'AI' of this Petition. The Petitioner No.1 is a Company
incorporated under the Companies Act, 1913 and is engaged in the
business of manufacturing and marketing pharmaceutical
formulations / products. The Petitioner No.2 is the Company
Secretary of the Petitioner No.1. For the sake of convenience, in the
following discussion, the Petitioner No.1 is referred to as the "the
Petitioner".
7. The Respondent No.1 is the Union of India represented
by the Secretary, Ministry of Health and Family Welfare, Government
of India. The Respondent No.2 is the Union of India represented by
the Joint Secretary, Ministry of Chemicals and Fertilizers,
Government of India; and the Respondent No.3 is the National
Pharmaceutical Pricing Authority, Department of Chemicals and
Petro-Chemicals, Ministry of Chemicals and Fertilizers, Government
of India.
8. The subject matter of this Petition is the formulation by
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the name "Wysolone DT'. The impugned show cause notice
mentions "Wysolone 10 Tablets" containing Prednisolone 10 mg
Tablets. The Drugs (Prices Control) Order, 2013 (for short, 'the DPCO
2013') had Schedule-I. It was substituted vide the notification dated
10.3.2016 issued by the Ministry of Chemicals and Fertilizers
(Department of Pharmaceuticals). The Schedule-I comprises of
National List Of Essential Medicines 2015 (for short, 'NLEM 2015').
The list gives names of the different formulations, level of healthcare
as Primary, Secondary and Tertiary; and in the last column it
mentions the manner of administering those drugs viz., whether they
are Tablets, Injections or Capsules in a particular form. The main
issue involved in this Petition is regarding the Explanation which is
mentioned at the end of the list in this Schedule. The Explanation
mentions as to how the formulation and the form of administering
that formulation is listed in NLEM, 2015 so that it lays down as to
which formulation in which form is subject to price control. The
DPCO 2013 was notified w.e.f. 15.5.2013. It sought to regulate
prices of the scheduled formulations as included in the First
Schedule. According to the Petitioners, the non-scheduled
formulations, which were not specified in the First Schedule, were
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not subject to the rigors of the price control.
9. The Respondent No.3 issued a notification bearing S.O.
1819(E) dated 18.5.2016, fixing the sale price of Prednisolone Tablet
having the strength of Prednisolone-5mg at Rs.0.52 per tablet and
Prednisolone-10mg at Rs.0.90 per tablet.
10. The rival contentions in this Petition are whether the
dispersible tablets of the formulation Prednisolone is covered under
the Schedule and hence is subject to the price control or it is not so
covered and, therefore, is not subject to the price control.
11. The Respondent No.3 issued a show cause notice dated
8.3.2018, annexed at Exhibit-AC, to the Petitioner asking the
Petitioner to show cause within thirty days from receipt of the notice
as to why action should not be taken to recover the over-charged
amount of Rs.3,85,56,337/- along with appropriate interest from the
Petitioner. It was mentioned in the show cause notice that the
Petitioner had manufactured/sold the Scheduled Formulation
'Wysolone 10 Tablets' containing scheduled formulation Prednisolone
10 mg Tablets at a price of Rs.15.58 for 15's tablets against the
ceiling price notified of Rs.0.90 for 1 tablet. It was further mentioned
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that as per working schedule of NPPA, Wysolone DT 10 mg tablets
have been taken into consideration at the time of price fixation; and
hence it was a scheduled formulation. According to that notice, the
Petitioner had charged the said amount in excess from the customers
for the period from November, 2016 to October, 2017.
12. The show-cause notice dated 8.3.2018 was followed by
another letter dated 15.3.2018, annexed at Exhibit-AD, issued by the
Respondent No.3 calling upon the Petitioner to provide batchwise
production and sale details along with corresponding MRP from the
period 1.9.2014 till 15.3.2018, duly certified by Chartered / Cost
Accountant within 15 days, for further examination of the case. The
Petitioner replied to the letter dated 15.3.2018 issued by the
Respondent No.3 through their reply dated 11.4.2018 requesting to
change the said formulation from 'scheduled' to 'non-scheduled'.
Finally, the Respondent No.3 issued a demand notice for over-
charging the aforesaid amount with interest and asked the Petitioner
to deposit Rs.4,60,60,240/-. All these annexures at Exhibits-AC, AD
and AI are under challenge in this Petition.
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SUBMISSIONS OF MR. SEERVAI, LEARNED SENIOR COUNSEL FOR
THE PETITIONERS:
13. Mr. Seervai invited our attention to the definitions of the
'scheduled formulation', 'non-scheduled formulation', and 'National
List of Essential Medicines'. He invited our attention to the reference
to Prednisolone at entry No.3.7 in NLEM 2015. He submitted that the
said entry specifically mentions - Tablet 5 mg, Tablet 10 mg, Tablet
20 mg, Oral liquid 5 mg/ 5 ml and oral liquid 15 mg/5 ml. He
submitted that there is no reference to Dispersible Tablet (DT) or
Dispersible Tablet 10 mg (DT 10 mg). His main thrust of argument is
that this would clearly mean that 'Wysolone DT 10 mg', which is
corresponding to Prednisolone formulation is not included in NLEM
2015 because the Dispersible Tablet is not included in that particular
column against entry No.3.7 for Prednisolone. He invited our
attention to various other entries, where the dispersible tablets were
specifically mentioned in NLEM 2015. He referred to entry Nos.2.1.1
[Acrtylsalicylic acid], 6.4.3.1.3 [Lamivudine(A)+, Nevirapine(B) +,
Stavudine(C)], 6.4.3.1.5 [Stavudine(A)+, Lamivudine(B)], 6.4.3.2.2
[Nevirapine], 7.1.1 [Acetylsalicylic acid], and 12.5.1 [Acetylsalicylic
acid].
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14. Mr. Seervai relied on the Explanation below the Schedule
of NLEM 2015 to contend that 'Wysolone DT 10 mg' not having been
included in this list, would be outside the Schedule; and hence was
not subject to price control.
15. Mr. Seervai relied on the Office Memorandum dated
20.4.2017 issued by the Ministry of Chemicals and Fertilizers,
Department of Pharmaceuticals, Government of India. It was
mentioned in the memorandum that the NPPA i.e. the Respondent
No.3 was requested to comply with the decision taken in the meeting
on "Review of Pharma Issues" by the Principal Secretary to P.M. on
28.3.2017. The decision was as follows :
"The price of a drug not to be revised before a period of 5
years, except revision based on WPI or on application made
by a company itself or on the orders of a competent court. Any
drug not included to NLEM should not be part of DPCO
Schedule-I."
16. Mr. Seervai relied on this direction that the drug which is
not included in NLEM should not be a part of DPCO Schedule I.
17. Mr. Seervai relied on the report of the Core-Committee
for revision of the NLEM. The report was issued in November, 2015.
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The Core-Committee was constituted by the Ministry of Health and
Family Welfare, Government of India to deliberate and decide on the
criteria for inclusion and deletion of medicines in the NLEM. Mr.
Seervai submitted that this report gives indication as to how the
NLEM is to be read along with its Explanation. The report mentions
the specific issues deliberated during the revision process. One of the
issues was incremental innovation. He further submitted that the
explanation under the Schedule is based on this report.
18. Mr. Seervai relied on the judgments of a Single Judge
Bench of the High Court of Delhi in the case of Modi-Mundipharma
Private Limited v. Union of India & others 1 as well as in the case of Intas
Pharmaceuticals Limited and another v. Union of India and another2.
19. Mr. Seervai submitted that the National List of Essential
Medicines was modified in the year 2022 through the notification
dated 11.11.2022. At the end of the list of formulations, it was
mentioned that 'All modified release formulations of same strength
such as sustained release, controlled release, extended release,
prolonged release etc. are included'. Therefore, NLEM 2022 covers
Prednisolone at entry No.3.6 which is mentioned as Tablet 5 mg,
2018 SCC OnLine Del 9904
2018 SCC OnLine Del 11328
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Tablet 10 mg, Tablet 20 mg, Oral liquid 5 mg/5mL(p), Oral liquid 15
mg/5mL(p) and it would cover the dispersible tablets because the
modified release formulations of same strength are all included. In
the NLEM 2011 there were four columns, namely, name of medicine,
category, route of administration and strength. Against the name
Prednisolone, the route of administration was mentioned as 'Tablets'.
In the last column the strength was mentioned as 5mg, 10mg and
20mg. Therefore, under that list also there was no distinction
between the tablets and dispersible tablets. In comparison to both
these lists of the years 2011 and 2022, the list in NLEM 2015 is
different because of the Explanation offered below the list. The
Explanation shows that there was a distinction between the ordinary
tablets and the dispersible tablets. He relied on paragraph-17 of the
Drugs (Prices Control) Order, 2013 which reads as under :
"17. Amendment of the list of scheduled formulations.-- (1) A
decision to amend the First Schedule, clearly stating the reasons
thereof, shall be taken by the Government within sixty days of
receipt of communication from the Ministry of Health and
Family Welfare and the amendment(s) or revision, if required, in
the First Schedule shall be notified and thereafter, the ceiling
price(s) for the medicine(s) added in the First Schedule shall be
fixed as per the provisions of this order within a period of sixty
days from the date of the notification."
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ARGUMENTS OF MR. BHATE ON BEHALF OF THE RESPONDENTS:
20. Mr. Bhate submitted that the list is published by the
Respondent No.1. The Respondent No.3 is the Price Fixing Authority.
Prednisolone is an Active Pharmaceutical Ingredient (API) and
Wysolone is the brand name. He submitted that in all the three lists
i.e. NLEM 2011, NLEM 2015, NLEM 2022 only the 'tablets' are
mentioned. Therefore, if the dispersible tablets are covered under
NLEM 2011 and NLEM 2022 then there is no reason to interpret that
they would not be covered under NLEM 2015. He relied on
paragraph-32 of the DPCO 2013 and in particular on sub-paragraph
(iii) of paragraph-32. Said Paragraph-32 reads thus:
"32. Non-application of the provisions of this order in certain
cases.-- The provisions of this order shall not apply to, --
(i) a manufacturer producing a new drug patented under
the Indian Patent Act, 1970 (39 of 1970) for a period of
five years from the date of commencement of its
commercial marketing by the manufacturer in the
country;
(ii) a manufacturer producing a new drug in the country by
a new process developed through indigenous Research
and Development and patented under the Indian Patent
Act, 1970 (39 of 1970)(process patent) for a period of
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five years from the date of the commencement of its
commercial production in the country.
(iii) a manufacturer producing a new drug involving a new
delivery system developed through indigenous
Research and Development for a period of five years
from the date of its market approval in India:
PROVIDED that the provision of this paragraph shall
apply only when a document showing approval of such
new drugs from Drugs Controller General (India) is
produced before the Government.
(iv) xxxxxxx
Explanation.-- Notwithstanding anything contained
in this Order, for the purpose of this paragraph "new drug"
shall have the same meaning as is assigned to under rule 122E
of the Drugs and Cosmetics Rules, 1945."
21. Mr. Bhate relied in particular on Paragraph-32(iii) and
the Explanation. He submitted that if a manufacturer takes
advantage of keeping his formulation outside the Schedule, he has to
show that the new drug involves a new delivery system and the
concession is available for a period of five years from the date of its
market approval in India. He submitted that the emphasis is on the
'approval in India'. Therefore, it can only be a new delivery system if
it has an approval given by the authorities. He referred to the
meaning of 'New Drug' as assigned to that word under Rule 122E of
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the Drugs Rules, 1945. As per Rule 122E the definition of 'New Drug'
is as follows :
"122E. Definition of new drug
For the purpose of this part, new drug shall mean and include--
(a) A drug, as defined in the Act including bulk drugs substance
[or phytopharmaceutical drug] which has not been used in
the country to any significant extent under the conditions
prescribed, recommended or suggested in the labelling
thereof and has not been recognized as effective and safe
by the licensing authority mentioned under rule 21 for the
proposed claims:
PROVIDED that the limited use, if any, has been with the
permission of the licensing authority.
(b) A drug already approved by the Licensing Authority under
rule 21 for certain claims, which is now proposed to be
marketed with modified or new claims, namely,
indications, dosage, dosage form (including sustained
release dosage form), and route of administration.
(c) A fixed dose combination of two or more drugs,
individually approved earlier for certain claims, which are
now proposed to be combined for the first time in a fixed
ratio; or if the ratio of ingredients in an already marketed
combination is proposed to be changed-- with certain
claims viz., indications dosage, dosage form (including
sustained release dosage form) and route of
administration) (See items (b) & (c) of Appendix VI to
Schedule Y.)
Explanation. -- For this rule:
(i) all vaccines and Recombinant DNA (r-DNA) derived
drugs shall be new drugs unless certified otherwise by the
Licensing Authority under rule 21;
(ii) A new drug shall continue to be considered as new drug
for a period of four years from the date of its first
approval."
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22. Shri Bhate submitted that the Drugs Rules, 1945 were
issued in exercise of the powers conferred by Sections 6(2), 12, 33
and 33N of the Drugs and Cosmetics Act, 1940. Under the same
powers i.e. under the Drugs and Cosmetics Act, 1940, in the year
2019 new Rules were framed as The New Drugs And Clinical Trials
Rules, 2019. The 'new drug' is also defined under those Rules of
2019. Rule 2(w) defines 'New Drug' as follows:
"2. Definitions. (1) In these rules, unless the context otherwise
requires-
xxxxxx
xxxxxx
(w) "new drug" means, --
(i) a drug, including active pharmaceutical ingredient or
phytopharmaceutical drug, which has not been used in the
country to any significant extent, except in accordance with
the provisions of the Act and the rules made thereunder, as
per conditions specified in the labelling thereof and has not
been approved as safe and efficacious by the Central
Licensing Authority with respect to its claims; or
(ii) a drug approved by the Central Licensing Authority for
certain claims and proposed to be marketed with modified
or new claims including indication, route of administration,
dosage and dosage form; or
(iii) a fixed dose combination of two or more drugs, approved
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separately for certain claims and proposed to be combined
for the first time in a fixed ratio, or where the ratio of
ingredients in an approved combination is proposed to be
changed with certain claims including indication, route of
administration, dosage and dosage form; or
(iv) a modified or sustained release form of a drug or novel
drug delivery system of any drug approved by the Central
Licensing Authority; or
(v) a vaccine, recombinant deoxyribonucleic acid (r-DNA)
derived product, living modified organism, monoclonal
anti-body, cell or stem cell derived product, gene
therapeutic product or xenografts, intended to be used as
drug;
Explanation. The drugs, other than drugs referred to in
sub-clauses (iv) and (v), shall continue to be new drugs for
a period of four years from the date of their permission
granted by the Central Licensing Authority and the drugs
referred to in sub-clauses (iv) and (v) shall always be
deemed to be new drugs."
23. Mr. Bhate, therefore, submitted that even for a novel
drug delivery system or sustained release form or a modified form,
the approval by the Central Licensing Authority is necessary. He
submitted that it is not the case of the Petitioner that any such
approval was taken by the Petitioners for the tablets Wysolone DT,
which are the dispersible tablets.
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24. Mr. Bhate submitted that the ceiling prices are applicable
to all forms of medicines as specified in the Schedule in the
mentioned dose and dosages form irrespective of whether they are
conventional or dispersible tablets. Based on the above provisions
pertaining to Paragraph-32 of DPCO 2013, in cases of a new drug
with product patent, the process patent, new drug involving new
drug delivery system developed through indigenous Research and
Development and drugs used for treating orphan diseases are given
exemptions. However, the manufacturer has to seek prior approval
from NPPA. The applications which are received are examined and if
found eligible exemptions are granted. In the present subject matter,
no such approval was sought for and no exemption was asked for by
the Petitioner for their brand Wysolone DT.
25. Mr. Bhate further referred to Paragraph-15(2), which
deals with fixation of retail price for a new drug for existing
manufacturers of scheduled formulations wherein it is provided that
where an existing manufacturer of a drug with dosages and
strengths, as specified in NLEM, launches a new drug, such existing
manufacturers shall apply for prior price approval of such new drug
from the Government in Form-I specified under Schedule-II of DPCO,
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2013. Paragraph-15(6) provides that no existing manufacturer of a
scheduled formulation shall sell such a new drug at a price higher
than the retail price (plus local taxes as applicable) fixed by the
Government for such new drug and in case such a manufacturer is
found to sell such a new drug at a price higher than the retail price
(plus local taxes as applicable) fixed by the Government, such
manufacturer of the new drug shall be liable to deposit the
overcharged amount along with interest from the date of
overcharging in addition to the penalty.
26. Mr. Bhate, therefore, submitted that the Petitioners have
not taken any such approval. They were bound to follow these Rules
and, therefore, the impugned demand notices are correct. They
cannot be set aside.
REJOINDER OF THE PETITIONERS :
27. In response, Mr. Seervai submitted that the arguments on
behalf of the Respondents is not tenable. It is not the Petitioners'
case that Wysolone DT was a new drug. The question is whether it
was included in the NLEM 2015. He referred to Paragraph-26 of the
DPCO 2013 which mentions that no person shall sell any formulation
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to any consumer at a price exceeding the price specified in the
current price list or price indicated on the label of the container or
pack thereof, whichever is less. Mr. Seervai submitted that pursuant
to the NLEM 2015 by a separate notification the price was fixed for
Prednisolone but no price was fixed for Prednisolone DT 10mg
which is the subject matter of the demand notices.
Reasons :
28. We have considered these submissions. To appreciate the
arguments advanced by both learned counsel it is necessary to refer
to certain definitions under the Drugs (Price Control) Order, 2013.
They are as follows :
"2. Definitions.-- (1) In this Order, unless the context
otherwise requires,-
xxxxx
(i) "formulation" means a medicine processed out of or
containing one or more drugs with or without use of
any pharmaceutical aids, for internal or external use
for or in the diagnosis, treatment, mitigation or
prevention of disease and, but shall not include-
(i) any medicine included in any bonafide
Ayurvedic (including Sidha) or Unani
(Tibb) systems of medicines;
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(ii) any medicine included in the Homoepathic
system of medicine; and
(iii) any substance to which the provisions of the
Drugs and Cosmetics Act, 1940 (23 of
1940) do not apply;
xxxxx
xxxxx
(t) "National List of Essential Medicines" means
National List of Essential Medicines, 2011
published by the Ministry of Health and
Family Welfare as updated or revised from
time to time and included in the First
Schedule of this order by the Government
through a notification in the Official
Gazette;
. It is subsequently modified in the year 2015 and 2022.
xxxxx
xxxxx
(zb) "scheduled formulation" means any formulation,
included in the First Schedule whether referred
to by generic versions or brand name;
. In the present subject matter, the generic version is Prednisolone
and the brand name is Wysolone.
(zc) "Schedule" means a Schedule appended to this
Order;"
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29. The core issue which is involved in this Petition, is about
the interpretation of the explanation provided below the NLEM 2015.
The clauses (1) and (2) in the explanation are important which are
as follows
"(1) Any dosage form of a medicine, other than the dosage form
included in this Schedule, but in same strength and route of
administration, which does not have significant difference in
terms of pharmacokinetics or pharmacodynamics or efficacy-
safety profile over the dosage form mentioned in the list shall
be considered as included. To elaborate, if a tablet is
included, other dosage forms like conventional tablets and
capsules are considered as included. However, such different
dosage forms should be considered differently for purposes
such as procurement policy, pricing, etc. This principle also
applies to all other dosage forms e.g. oral liquid dosage
forms, injectables, topical dosage forms, etc.
(2) Innovation in medicine must be encouraged. The
formulations developed through incremental innovation or
novel drug delivery systems like lipid/liposomal
formulations, sustained release/controlled release etc. should
be considered as included only if specified in the list against
any medicine. Such different formulations should be
considered differently for purposes such as procurement
policy, pricing, etc.
(3) xxxxxx
(4) xxxxxx
(5) xxxxxx
(6) xxxxxx"
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30. The arguments on behalf of the Respondent No.2
proceeded on the footing that the Petitioners were claiming their
brand Wysolone DT 10 mg as a new drug and, therefore, were
claiming that it would not fall within the Schedule i.e. NLEM 2015.
However, we find that it was never the case of the Petitioners in this
Petition or in the correspondence regarding the impugned demand
notice that the Wysolone DT 10 mg was a new drug. The main
contention on behalf of the Petitioner is that Wysolone DT having
formulation Prednisolone was a Dispersible Tablet which was a
distinct delivery system from the delivery of drugs through ordinary
tablets.
31. As mentioned earlier, NLEM 2011 has four columns i.e.
name of the medicine, categories, route of administration and
strength. In that list, against the entry of Prednisolone, the route of
administration was mentioned as 'Tablets'. In the fourth column,
against the entry of Prednisolone, the strength was mentioned as 5
mg, 10 mg or 20 mg. Apart from that there was no distinction in
respect of any different drug delivery system. Similarly, for NLEM
2022 there was again the column mentioning the drug delivery
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systems as tablet, oral liquid or injection or drops etc.. Against the
entry No.3.6 corresponding to Prednisolone there was mention of
Tablet 5 mg, Tablet 10 mg, Tablet 20 mg, Oral liquid 5mg/5mL (p),
Oral liquid 15 mg/5 mL (p). There was a specific mention below the
list that all modified release formulations of same strength such as
sustained release, controlled release, extended release, prolonged
release etc. are included. Therefore, this particular provision brought
all the different drug delivery systems within the scope of NLEM. No
distinction was made for different drug delivery system viz.
Sustained release, control release etc. and, therefore, under NLEM
2022 again Wysolone DT would be covered under the NLEM and
hence would be subject to price control. However, NLEM 2011 and
NLEM 2022 differ from NLEM 2015.
32. The NLEM 2015 specifically describes a specific drug
delivery system whether it is dispersible or sustained release etc. and
in cases of such formulations there is a specific reference to specific
drug delivery systems. For example, Entry at 2.1.1 regarding
Acetylsalicytic acid, there is a specific reference to dispersible/enteric
coated Tablet 300 mg to 500 mg.. In entry No.5.1 in the formulation
Carbamazepine, there is a reference to CR tablet 200 mg and CR
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Tablet 400 mg., which would be Controlled Release tablet. In entry
Nos.6.4.3.1.3 [Lamivudine (A)+, Nevirapine (B)+, Stavudine (C)],
6.4.3.1.5 [Stavudine (A)+, Lamivudine (B)] and 6.4.3.2.2
[Nevirapine] there is again a reference to Dispersible Tablet of that
particular formulation. Entry No.12.1.3 [Diltiazem] makes a
reference to SR Tablet against that particular formulation. Therefore,
it is clear that whenever a specific drug delivery system other than
ordinary tablet was intended to be covered under the NLEM, there is
a specific reference to that particular drug delivery system. Very
significantly, the entry against the formulation Prednisolone, there is
a reference to the Tablet and the Oral liquid but there is no reference
to Dispersible Tablet. This is very important in the context of the
arguments advanced before us.
33. According to the arguments advanced on behalf of the
Respondents, since Wysolone DT is in the same strength and route of
administration, it is considered as included in NLEM as per the
explanation (1).
34. Learned counsel for the Respondents relied on the
judgment of a Single Judge Bench of the High Court of Delhi in the
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case of Indoco Remedies Limited v. Union of India and another3. On the
other hand, Mr. Seervai submitted that Explanation (2) would be
relevant to decide whether Wysolone DT is included in the list.
Explanation (2) starts with the statement that 'innovation in
medicine must be encouraged.' Incidentally this explanation is based
on the report of the Core-Committee for Revision of the NLEM. It is
the report of November, 2015. The Core-Committee had deliberated
the specific issues during the revision of NLEM viz. Doses, form,
strength etc. and one of the issues was incremental innovation.
Explanation (2) specifically finds reference in the said report under
the heading 'incremental innovation'. It is mentioned in the report
that the Committee considered that such formulations including
novel drug delivery systems like lipid / liposomal formulations,
modified release formulations like sustained release, controlled
release etc. of a medicine which are developed to overcome certain
disadvantages associated with the use of conventional formulations,
will be considered included only if specified in the list against any
medicine.
2018 SCC OnLine Del 10399
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35. Mr. Seervai submitted that the dispersible tablets are
developed to overcome the disadvantage faced by some patients in
swallowing the tablets and, therefore, considering the deliberations
recorded in the said report this explanation will have to be read in
that light.
36. Explanation (2) further mentions the formulations
developed through the incremental innovation or novel drug
delivery system. Thus, both these are included i.e. formulations
developed and the novel drug delivery system. Both these categories
are to be considered as included only if specified in the list against
any medicine. Therefore, the question which needs to be answered is
whether the formulation Prednisolone with brand name Wysolone in
the form of Dispersible Tablets can be considered as a novel drug
delivery system. Explanation (2) refers to certain delivery systems
like lipid/liposomal formulations, sustained release/controlled
release etc. It indicates that the novel drug delivery systems
mentioned in that explanation are inclusive but not exhaustive.
Other drug delivery system which can be described as a novel drug
delivery system can be a part of this category. The dispersible tablets
are not specifically mentioned in this particular category but since
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the delivery systems named therein are followed by the word 'etc'
there are other novel drug delivery systems which are covered by the
explanation (2). In this context the stand taken by the Respondent
No.3 in the demand notice dated 15.6.2018 which is at Exhibit-AI
provides the answer. Paragraph-3 of this demand notice reads thus :
"3. The contentions of M/s. Pfizer Limited have been examined
and they are found not tenable due to the following
reasons:
(i) In this connection, attention is invited to Hon'ble Supreme
Court directive in its order dated 10.03.2003 in SLP
No.3668/2003 (Union of India Vs. K.S. Gopinath and
others), wherein the Government has been directed to
ensure that essential and lifesaving drugs should not fall
outside price control. As a matter of fact, exclusion of a
scheduled drug from price control merely on account of
drug delivery system beyond what has been already
provided under paragraph 32 of the DPCO, 2013 would
result in jeopardizing the entire DPCO framework and
would remove a large number of scheduled drugs from
price control because they, may adopt specialized drug
delivery system such as SR (sustained release), ER
(extended release), CR (controlled release), DR (delayed
release), DT (dispersible tablet), ET (effervescent tablet),
CTB (chewable tablet), IFPD (inlay tablet), PGS (gelatin
coated or polymer coated gelatin), BLM (bi-layered), ECT
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(enteric coated) etc. the issue of differential pricing
factoring drug delivery system is a in the NLEM of a
traditional version and a new version of a scheduled drug,
separate policy matter which is under examination in the
Government to provide for value-based differential
pricing, but as of now the DPCO, 2013 does not provide
for such differential pricing unless and until there is a
separate mention.
(ii) Under the DPCO, 2013 ceiling price fixed for tablets are
applicable to all kinds of tablets unless specifically
specified. Moreover, plain or dispersible or coated or
uncoated or sustained release or extended release or
modified release or mouth dissolving or others come
under the category of tablets only. The prices of the
formulations are being fixed by NPPA either based on
market data or the data provided by the company, under
the provisions of DPCO, 2013.
(iii) While fixing price of the subject formulation the data
relating to all types of tablets were considered including
that of M/s Pfizer Limited (Wysolone 10 mg Tablets, 15)
which is available on nppa website (worksheet dated
26.02.2015 (NLEM, 2011)."
37. While making reference to the specialized drug delivery
systems, the Respondent No.3 has stated in their reply that the
manufacturer may adopt specialized drug delivery system 'such as'
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SR (sustained release), ER (extended release), CR (controlled
release), DR (delayed release), DT (dispersible tablet), ET
(effervescent tablet), CTB (chewable tablet), IFPD (inlay tablet), PGS
(gelatin coated or polymer coated gelatin), BLM (bi-layered), ECT
(enteric coated) etc.. Thus, this letter itself treats dispersible tablets
in equal category as controlled release and sustained release which
are specifically mentioned in explanation (2). The tenor of this
demand notice is that if the manufacturer uses this specialized drug
delivery system it would remove a large number of products from the
price control. This is the stand taken by the Respondent No.3. The
explanation (2) means that the novel drug delivery system like the
dispersible tablet can be considered as included only if specified in
the list against that particular medicine. In NLEM 2015, the
dispersible tablets are not mentioned against the name
"Prednisolone". The stand taken by the NPPA (the Respondent No.3)
that all tablets would cover sustained release or extended release or
dispersible tablets is not in consonance with the explanation (2)
which is based on the Core-Committee's report.
38. If it is the stand of the Authorities in the Demand Notice
that the tablet includes - As per Clause (ii) the category tablets
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covers plain or dispersible or coated or uncoated or sustained release
or extended release or modified release or mouth dissolving come
under the category of tablets only, then there was no necessity to
mention this separate category against Entry No.12.5.1
Acetylsalicylic acid where Tablet 75 mg is separately mentioned and
effervescent/ Dispersible / Enteric coated Tablet 75 mg are
separately mentioned. Similar entry is at 6.4.3.1.3 [Lamivudine (A)
+, Nevirapine (B)+, Stavudine (C)], and 6.4.3.1.5 [Stavudine (A)+,
Lamivudine (B)].
39. In entry 5.1 of Carbamazepine Tablet 400 mg and CR
Tablet 400 mg are separately mentioned. Thus it is quite clear that
wherever NLEM 2015 required the mention of particular drug
delivery system, it was specifically mentioned. By implication the
delivery system which is not mentioned will have to be considered as
not included in the list.
40. Significantly, as mentioned earlier, the dispersible tablets
are in fact mentioned against certain formulations in NLEM 2015. We
have already mentioned such medicines. Therefore, we find
substance in the submissions of Mr. Seervai that in the absence of
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the specific mention of dispersible tablets against the entry of
Prednisolone, such dispersible tablets cannot be considered as
included as they are not specified in the list against that medicine.
41. The affidavit-in-reply filed on behalf of the Respondent
No.3, in paragraph-26 mentions that while fixing the price of the
subject formulation, the data relating to all types of tablets in all
dosages forms were considered by NPPA including Wysolone 5 mg &
10 mg and Wysolone 5 mg & 10 mg DT Tablets. It is further
mentioned that the worksheet is available which shows that most of
the formulations considered for that price fixation were SR/MR/DT.
Since Wysolone 5mg and 10 mg dispersible tablets were specifically
considered for fixing the price then the authorities should have
notified the ceiling price for Prednisolone 5 mg DT and Prednisolone
10 mg DT. The price was fixed for Prednisolone 5 mg and
Prednisolone 10 mg vide the notification dated 18.5.2016 and we are
informed that the price for Prednisolone 20 mg was also fixed but
there was no notification pointed out on behalf of the Respondent
No.3 for price ceiling for Prednisolone 10 mg DT or Prednisolone 5
mg DT fixing the ceiling price. Thus, the explanation, the demand
notice and the notification fixing the ceiling price together show that
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Prednisolone DT was not included in the list (NLEM 2015) and on
the basis of the explanation (2) Prednisolone DT could not be
considered as included in the list for price fixing.
42. In view of the above discussion regarding the explanation
provided in NLEM 2015, it is not possible to accept the arguments on
behalf of the Respondent No.3 that the Petitioner had to seek
approval for Wysolone DT if the Petitioner was claiming it to be a
new drug or new drug delivery system. It is not case of the Petitioner
in the Petition or in the correspondence made with the Respondent
No.3 that the dispersible tablets was a new drug or the new delivery
system was introduced at the time of publication of NLEM 2015.
Wysolone DT tablets were already available in the market and they
were subjected to the ceiling price prior to NLEM 2015, under NLEM
2011 and subsequently under NLEM 2022. This is clear from the
fact that while fixing the price and for issuing the notification, the
Respondent No.3 had considered the data related to Wysolone DT
tablets as mentioned in their affidavit. Therefore, the submissions
made on behalf of the Respondent No.3 in respect of definition of
'new drug' or 'new drug delivery system', does not address the issue
raised in the Petition because it was not the case of the Petitioner
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that it was a new drug or a new drug delivery system which was not
in existence at the time of publication of NLEM 2015.
43. Mr. Seervai relied on the judgment of Modi-Mundipharma
Pvt. Ltd. in support of his submissions as mentioned earlier. In this
case, the scope of interpretation of explanation (1) and explanation
(2) is clarified in Paragraph-36 as follows:
"36. Although the true purpose of an explanation is to explain the
main proviso, the legislature is not impeded in any manner to
express its intention by way of an explanation. Thus, an
explanation indicating that a statute has to be read in an
expansive manner would necessarily have to be given its full
effect and the main statute would have to be read in an expansive
manner. Similarly, an explanation may also restrict the
applicability of the statute in order to express the legislative
intent to do so. In the present case, on a plain reading of Section
2(v) of the DPCO-2013, a formulation of a dosage and strength
which is not specified in the Schedule, is to be considered as
'non-scheduled formulation'. However, the width of this
exclusion is restricted by Explanation (1) to the Schedule-I to the
DPCO-2013, which provides that even though a dosage form is
not mentioned in the Schedule, it would be read as included if it
does not have any significant difference in terms of
pharmacokinetics or pharmacodynamics or efficacy-safety
profile over the dosage form as mentioned in the list. Thus, the
import of Explanation (1) to the Schedule-I to the DPCO is to
expand the scope of the Schedule-I to the DPCO-2013 to include
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formulations with dosage forms different from those listed in the
Schedule. Explanation (2) restricts the sweep of Explanation (1)
and clarifies that those formulations which are developed
through incremental innovation or/and involve a novel drug
delivery system such as Sustained release/Controlled release
would not be included in the list unless specifically mentioned.
Explanation (2) to the Schedule-I to the DPCO-2013 only
clarifies the manner in which the Schedule-I to the DPCO-2013
is to be read."
44. In Intas Pharmaceuticals Limited, it was observed in
Paragraph-30 that the contention that all versions of the formulations
irrespective of the drug delivery system or innovation are included in
Schedule-I of the DPCO 2013 is erroneous.
45. Indoco Remedies Limited was relied on by Mr. Bhate. In
that case, in paragraph-38 there was a reference to the judgment of
Modi-Mundipharma Pvt. Ltd. In paragraph-38 of Indoco Remedies Ltd.
judgment, it was observed that if a medicine is mentioned in
Schedule I, but the specific dosage and strength has not been
specified, the same would be 'non-scheduled formulation' provided
that the dosage and strength (which are not specified in Schedule I)
have a material bearing on the product and it would not be
considered the product as the one as specified in Schedule I. In the
facts of that particular case, it was further observed in paragraph-39
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that it was ex facie clear that there was no material difference in the
medicine as specified in Schedule I - CETRIZINE Syrup 5 mg/ml and
oral syrup 5 mg/5ml and the latter would only be a diluted version
of the former.
Thus, the observations in the case of Indoco Remedies
Limited were made with reference to that particular formulation. In
fact paragraph-37 of the said judgment is important, which is
important for consideration of the issues before us. Paragraph-37
reads thus:
"37. By virtue of Explanation 2, the formulations that were
developed through incremental innovation or novel drug
delivery system such as Sustained release or Controlled
release were unless specified in Schedule I, expressly to be
excluded from Schedule I. Plainly, medicines with such
added qualities or attributes that are substantial enough to
render the product itself dissimilar to the one entered in
Schedule-I, cannot be assumed as covered by an entry in
Schedule-I, which does not specifically indicate so. This is
also the substratal rationale of clause (v) of paragraph 2(1)
of DPCO-2013 as it existed prior to 09.03.2015."
. Thus, Paragraph-37, in fact, supports the contentions of
Mr.Seervai.
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46. Hence, based on the above discussion, we are of the
opinion that the Petitioner has made out a case for grant of relief
referred to in the prayer clauses (a)(i) and (a)(iii). Hence, the show-
cause notice dated 8.3.2018 (annexed at Exhibit-AC to the Petition)
issued by the Respondent No.3 and the demand notice dated
20.6.2018 (annexed at Exhibit-AI to the Petition) issued by the
Respondent No.3, are quashed and set aside. Rule is made absolute
in aforesaid terms. The Petition is disposed of accordingly.
( SHYAM C. CHANDAK, J.) (SARANG V. KOTWAL, J.)
PRADIPKUMAR PRAKASHRAO
PRAKASHRAO DESHMANE
DESHMANE
Date:
2025.10.07
12:32:03 +0530
Deshmane (PS)
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