Unlisted Drug Variants Can’t Be Brought Under Price Control: Bombay HC

The Bombay High Court has held that under the Drugs (Price Control) Order, 2013 (DPCO 2013), ceiling prices can only be imposed on formulations specifically included in the First Schedule, and that the National Pharmaceutical Pricing Authority (NPPA) cannot extend price control to formulations not expressly notified therein.

The Court ruled that attempts to impose ceiling prices on such non-scheduled formulations, including those involving distinct drug delivery systems like sustained release (SR) formulations, are contrary to the scheme of DPCO 2013 and unsustainable in law.

A Division Bench of Justice Manish Pitale and Justice Shreeram V. Shirsat allowed the writ petitions and held that the NPPA’s demand notices alleging overcharging were unsustainable, as they were based on an incorrect interpretation of DPCO 2013.

The Court set aside the impugned demands and clarified that unless a formulation is specifically included in the First Schedule or added through a notified order, it cannot be subjected to price ceiling under the 2013 Order.

The petitions arose from a dispute concerning the interpretation and implementation of DPCO 2013, which was issued pursuant to the National Pharmaceutical Pricing Policy, 2012. The petitioners, including pharmaceutical manufacturers and an industry association, challenged the NPPA’s insistence on applying ceiling prices to formulations not listed in the First Schedule to DPCO 2013.

They contended that such an approach was contrary to the express provisions of the Order, as well as clarifications issued by the parent Ministry.

The controversy specifically concerned formulations involving modified drug delivery systems, such as sustained release (SR) variants of medicines.

While conventional formulations of certain drugs were included in the First Schedule and subjected to price control, the petitioners argued that SR formulations being technologically distinct and not expressly included could not be brought within the ambit of price ceiling unless specifically notified.

In support, reliance was placed on communications issued by the Ministry of Chemicals and Fertilizers and the Ministry of Health and Family Welfare, which clarified that non-conventional dosage forms such as SR or CR formulations would not fall within price control unless specifically included.

The NPPA, however, took the position that once a drug was included in the schedule, all its formulations, including those with different delivery mechanisms, would be covered.

It issued show cause notices and demand notices alleging overcharging by manufacturers, including a demand exceeding Rs. 7.88 crore against one of the petitioners for an SR formulation of Metformin.

The petitioners challenged these actions as being beyond the authority conferred under DPCO 2013.

Examining the statutory framework, the Court undertook a detailed analysis of the definitions under DPCO 2013, including “scheduled formulation,” “non-scheduled formulation,” and “ceiling price.”

It noted that the scheme of the Order clearly distinguishes between formulations listed in the First Schedule and those that are not. Ceiling prices apply only to scheduled formulations, while non-scheduled formulations are merely subject to price monitoring to prevent excessive increases.

The Court found that the First Schedule, which incorporates the National List of Essential Medicines (NLEM) 2011, is central to the operation of DPCO 2013.

It further noted that the Government has the power to amend the Schedule and include additional formulations with specified ceiling prices through separate notifications.

The record demonstrated that where the Government intended to regulate specific formulations particularly those involving different drug delivery systems it issued distinct orders adding them to the Schedule along with corresponding ceiling prices.

Relying on this pattern, the Court held that the absence of a specific formulation from the Schedule indicates a conscious decision not to subject it to price control.

It rejected the NPPA’s argument that all variants of a scheduled drug would automatically fall within the scope of the Schedule, observing that such an interpretation would render the scheme of specific inclusion and separate notification otiose.

The Court also placed significant reliance on contemporaneous clarifications issued by the parent Ministry, which indicated that innovative dosage forms such as SR or CR formulations were not intended to be covered under price control unless expressly specified.

It held that the NPPA, being a subordinate authority, could not adopt a position contrary to the interpretation of the policy and statutory framework by the parent Ministry.

Further, the Court noted that even though judicial restraint is generally exercised in matters involving price fixation under the Essential Commodities Act, such deference cannot extend to actions that are contrary to the governing policy and statutory provisions. Where an authority acts beyond the scope of the law, judicial intervention is warranted.

In light of these findings, the Court concluded that the demand notices issued by the NPPA were unsustainable, as they sought to impose price control on formulations not included in the First Schedule to DPCO 2013. The writ petitions were accordingly allowed, and the impugned demands were set aside.

Case Title: M/s. Franco Indian Pharmaceuticals Pvt. Ltd. & Anr. v. Union of India & Ors.; Indian Drug Manufacturers Association v. Ministry of Chemicals and Fertilizers & Ors.

Bench: Justice Manish Pitale and Justice Shreeram V. Shirsat

Date of Judgment: 10.04.2026