Delhi HC Stays NPPA Notice Against Glenmark To Afford An Opportunity Of Hearing [Read Order]

Recently Delhi High Court dealt with the issue involving whether National Pharmaceutical Pricing Authority has the power under the Drug Price Control Order, 2013 to enjoin a pharmaceutical company to seek an exemption order qua a new drug from price control for a period of five years from the date of manufacturing.

The drug in question was "Remo M" and "RemoZen M" of Glenmark Pharmaceutical Ltd which was approved by Drug Controller General of India as a "new drug" in 2019. The said new drug has proved highly effective for the treatment of type- 2 diabetes mellitus in adults. It is the first Investigational New Drug ("IND") to be approved after a gap of 6 years and overall only the 8th IND to be approved in the 72-year long history of independent India.

Glenmark Pharmaceutical Ltd assailed inter alia the Show Cause Notice, subsequent communication issued by National Pharmaceutical Pricing Authority for its new drug being ultra-vires & arbitrary. Glenmark Pharmaceutical Ltd principally relied upon the Notification dated 03.01.2019 whereby amendment of paragraph 32 (i) of the Drug Price Control Order, 2013 now includes a new drug patented under the Indian Patent Act, 1970 and the proviso to paragraph 32 of the Drug Price Control Order, 2013 which states that a manufacturer of a new drug is required to produce document showing approval of new drug from Drug Controller General of India to the Government in order to avail the benefit of exemption from price control.

After making preliminary submissions before the Court, Advocate appearing for Union of India sought instructions from the concerned Department, whereby he stated that National Pharmaceutical Pricing Authority is willing to grant opportunity of hearing to Glenmark Pharmaceutical Ltd and if it is found entitled for the benefit under paragraph 32 of Drug Price Control Order, 2013 it shall grant the consequential order. Accordingly, Hon'ble Court on the first date of hearing stayed the impugned SCN till the time National Pharmaceutical Pricing Authority takes decision in terms of its statement i.e to provide a hearing to Glenmark Pharmaceutical Ltd whereby it shall satisfy that it meets the yardstick defined under paragraph 32 of Drug Price Control Order, 2013 and disposed off the petition granting liberty to challenge any subsequent order.

For Glenmark Pharmaceutical Ltd Mr. Arvind Nigam Sr. Advocate appeared who was instructed by Mr. Debmalya Banerjee-Partner, Rohan Sharma-Principal Associate Mr. Kartik Bhatnagar- Principal Associate and Mr. Vardaan Wanchoo- Associate from Karanjawala & Co and Shruti Katakey-Associate Partner from Crawford Bayley.Recently Hon'ble Delhi High Court dealt with the issue involving whether National Pharmaceutical Pricing Authority has the power under the Drug Price Control Order, 2013 to enjoin a pharmaceutical company to seek an exemption order qua a new drug from price control for a period of five years from the date of manufacturing.

The drug in question was "Remo M" and "RemoZen M" of Glenmark Pharmaceutical Ltd which was approved by Drug Controller General of India as a "new drug" in 2019. The said new drug has proved highly effective for the treatment of type- 2 diabetes mellitus in adults. It is the first Investigational New Drug ("IND") to be approved after a gap of 6 years and overall only the 8th IND to be approved in the 72-year long history of independent India.

Glenmark Pharmaceutical Ltd assailed inter alia the Show Cause Notice, subsequent communication issued by National Pharmaceutical Pricing Authority for its new drug being ultra-vires & arbitrary. Glenmark Pharmaceutical Ltd principally relied upon the Notification dated 03.01.2019 whereby amendment of paragraph 32 (i) of the Drug Price Control Order, 2013 now includes a new drug patented under the Indian Patent Act, 1970 and the proviso to paragraph 32 of the Drug Price Control Order, 2013 which states that a manufacturer of a new drug is required to produce document showing approval of new drug from Drug Controller General of India to the Government in order to avail the benefit of exemption from price control.

After making preliminary submissions before the Hon'ble Court, Advocate appearing for Union of India sought instructions from the concerned Department, whereby he stated that National Pharmaceutical Pricing Authority is willing to grant opportunity of hearing to Glenmark Pharmaceutical Ltd and if it is found entitled for the benefit under paragraph 32 of Drug Price Control Order, 2013 it shall grant the consequential order. Accordingly, Hon'ble Court on the first date of hearing stayed the impugned SCN till the time National Pharmaceutical Pricing Authority takes decision in terms of its statement i.e to provide a hearing to Glenmark Pharmaceutical Ltd whereby it shall satisfy that it meets the yardstick defined under paragraph 32 of Drug Price Control Order, 2013 and disposed off the petition granting liberty to challenge any subsequent order.

For Glenmark Pharmaceutical Ltd Mr. Arvind Nigam Sr. Advocate appeared who was instructed by Mr. Debmalya Banerjee-Partner, Rohan Sharma-Principal Associate Mr. Kartik Bhatnagar- Principal Associate and Mr. Vardaan Wanchoo- Associate from Karanjawala & Co and Shruti Katakey-Associate Partner from Crawford Bayley.

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