NPPA Cannot Fix Prices for Non-Scheduled Formulations Under DPCO: Bombay HC

Bombay: In a significant ruling on drug price regulation, the Bombay High Court has allowed writ petitions filed by the Indian Drug Manufacturers Association and Franco Indian Pharmaceuticals, holding that the National Pharmaceutical Pricing Authority cannot impose ceiling prices on pharmaceutical formulations that are not specifically included in the First Schedule of the Drugs (Price Control) Order, 2013 (DPCO 2013).

The Court ruled that such action by the authority was contrary to the statutory framework and rendered the demand notices for alleged overcharging unsustainable.

The judgment was delivered on April 10, 2026, by a Division Bench comprising Justice Manish Pitale and Justice Shreeram V. Shirsat in Indian Drug Manufacturers Association vs Ministry of Chemicals and Fertilizers, while deciding writ petitions challenging the interpretation and implementation of DPCO 2013 by the authorities.

The petitioners, including Franco Indian Pharmaceuticals Pvt. Ltd. and the Indian Drug Manufacturers Association, challenged the actions of the NPPA, which had insisted on applying price ceilings even to formulations not included in the First Schedule of DPCO 2013. The dispute arose in the context of Metformin-based drugs, particularly “Glyciphage SR 500 mg,” a sustained release (SR) formulation.

While the conventional Metformin 500 mg tablet was included in the schedule with a fixed ceiling price, the SR formulation was not specifically listed. Despite this, the NPPA issued notices alleging overcharging and demanded recovery of large sums from manufacturers. The petitioners contended that such SR formulations involve different drug delivery systems and are distinct products, which cannot be brought under price control unless specifically included in the schedule.

The petitioners argued that DPCO 2013 clearly provides that only formulations specifically included in the First Schedule are subject to ceiling prices. They emphasized that sustained release (SR) and controlled release (CR) formulations are technologically distinct and must be expressly included to attract price control.

They further contended that the interpretation adopted by the NPPA was contrary to the plain language of DPCO 2013 and also inconsistent with clarifications issued by the parent Ministry, i.e., the Ministry of Chemicals and Fertilizers. The petitioners relied on official communications and past practice demonstrating that whenever a specific formulation was intended to be brought under price control, a separate notification was issued adding it to the schedule with a ceiling price.

The respondents opposed the petitions, arguing that the principle of price regulation under DPCO 2013 is based on the essentiality of drugs. They contended that once a drug is included in the schedule, all its forms—including different drug delivery systems like sustained release (SR) or controlled release (CR)—should be treated as covered under the same entry.

It was further submitted that manufacturers cannot escape liability for overcharging merely because a specific dosage form is not separately mentioned in the schedule. The respondents also emphasized the role of NPPA as an expert body and argued that its decisions regarding drug pricing should not be interfered with lightly by the Court.

It was also argued that demand notices alleging overcharging for non-scheduled formulations were arbitrary and without legal basis, as such products were not covered under the price control mechanism.

The Division Bench undertook a detailed interpretation of DPCO 2013 in light of the National Pharmaceutical Pricing Policy, 2012. It observed that the scheme of DPCO 2013 clearly distinguishes between “scheduled formulations” and “non-scheduled formulations,” and that ceiling prices apply only to those formulations expressly included in the First Schedule.

The Court noted that the Government had consistently followed a practice of issuing specific orders to include formulations with different drug delivery systems—such as sustained release versions—along with separate ceiling prices. This indicated that such formulations are treated as distinct and are not automatically covered under the general entry of a drug.

Rejecting the stand of the NPPA, the Court held that insisting on price ceilings for formulations not included in the schedule was contrary to the statutory framework. It further observed that the interpretation adopted by NPPA was inconsistent with the understanding of the parent Ministry and the structure of DPCO 2013.

The Bench also held that when policy and statutory provisions clearly define the scope of price control, any deviation from the same by regulatory authorities would amount to arbitrary implementation, warranting judicial interference.

Allowing the writ petitions, the Court set aside the impugned demand notices and upheld the stand of the petitioners.

The Court held,

“We find that a plain reading of DPCO 2013 and the first schedule appended thereto, as also the subsequent specific orders issued by the parent Ministry i.e. Ministry of Chemicals and Fertilizers (Department of Pharmaceutical) of the respondent-Union of India, show that unless a specific formulation with the drug delivery system was expressly included in the first schedule, the respondent No.3- NPPA could not have insisted on a price ceiling. As a matter of fact, the separate ceiling prices for the specific formulations included in the first schedule demonstrate that the methodology and technique used for manufacturing distinct formulations was taken into account, while fixing the ceiling price.”

Furthermore, it held, "the writ petitions deserve to be allowed."

To view the official order, click the link below: