Pharma Firm Gets HC Relief in Rs 64 Lakh NPPA Overpricing Row Over DOLOCIDE-MR

The bench of Justice Sachin Datta issued notice to NPPA and the Union of India, and directed that no recovery or punitive action be initiated against Kee Pharma until the next hearing on December 22, 2025.

Kee Pharma Limited, a pharmaceutical manufacturer, approached the High Court challenging the Office Memorandum dated June 9, 2017, issued by the National Pharmaceutical Pricing Authority (NPPA) and the subsequent demand notice dated July 11, 2025. The company manufactures the muscle relaxant formulation “Diclofenac 50mg + Paracetamol 325mg + Chlorzoxazone 250mg” under the brand name DOLOCIDE-MR, categorized as a non-scheduled formulation under the Drugs (Prices Control) Order, 2013 (DPCO 2013).

The NPPA had alleged that Kee Pharma Limited violated Paragraph 20 of DPCO 2013 by increasing the product’s price by 14.12% between April 2017 and April 2018, exceeding the permissible limit of 10%. Based on this finding, NPPA demanded recovery of Rs 32.59 lakh as the overcharged amount and Rs 31.41 lakh as interest.

Represented by Advocate Archana Sachdeva, Kee Pharma Limited argued that the NPPA’s 2017 Office Memorandum, which required non-scheduled drug manufacturers to absorb the increased tax burden following GST implementation, was beyond NPPA’s jurisdiction. The company maintained that NPPA’s powers under DPCO 2013 extend only to scheduled formulations, while non-scheduled formulations are governed by market forbearance, meaning the market determines the price without government interference.

Kee Pharma also contended that the NPPA’s memorandum was discriminatory, as it allowed manufacturers of scheduled drugs to pass the GST burden to consumers but compelled non-scheduled drug manufacturers to absorb it. Furthermore, the company alleged that the NPPA’s calculation of overcharging was arbitrary and opaque, disregarding CA-certified production and sales data previously submitted.

Representing the National Pharmaceutical Pricing Authority (NPPA) and the Union of India, Central Government Standing Counsel Saumya Tandan along with Government Pleader Rudra Paliwal, argued that under Paragraph 20 of the DPCO 2013, the government is empowered to monitor the prices of all drugs, including non-scheduled ones, and ensure that price hikes do not exceed 10% within any twelve-month period. They asserted that the demand notice was lawfully issued based on the available data and statutory provisions.

Scheduled formulations are drugs included in a government schedule (like Schedule-I of India's DPCO 2013) that have a ceiling price set by the government.

The National Pharmaceutical Pricing Authority (NPPA) in India sets and annually revises these ceiling prices based on the Wholesale Price Index (WPI).

Non-scheduled formulations are drugs not listed in the government's schedule. While they are not under direct price control, manufacturers cannot increase the Maximum Retail Price (MRP) by more than a certain percentage (e.g., 10% annually in India) without government intervention. Manufacturers are generally free to set prices based on production costs, research, and market dynamics, but the price monitoring system allows the government to take action if increases are deemed abnormal.

Justice Sachin Datta observed that the matter involved issues similar to an earlier case, Kee Pharma Limited v. National Pharmaceutical Pricing Authority & Anr (W.P. No. 11459/2025), in which interim protection was already granted to Kee Pharma. Taking note of the company’s submissions and the previous order, the Court considered it appropriate to extend interim relief in the present case as well.

Final Judgment (as per the Court Order)

"In the meantime, considering the aforesaid circumstances highlighted by the learned counsel for the petitioner, it is directed that till the next date of hearing, no coercive steps shall be taken against the petitioner pursuant to the impugned demand notice dated 11.07.2025."

The Court also directed:

"Let reply be filed within a period of four weeks from today. Rejoinder thereto, if any, be filed within a period of three weeks thereafter."

To view the official order, click the link below: