NPPA not to intervene in commercial issues regarding authorized dealership

New Delhi: Through a recently issued office memorandum, the National Pharmaceutical Pricing Authority (NPPA) has clarified that commercial issues, terms, disputes, etc. between the dealer and the concerned company or its distributor/ stockist are not within the purview of or resolved by the NPPA.

This statement came as a result of a number of complaints that NPPA has received from persons or firms that intend to become dealers for a particular manufacturer and the manufacturer refuses to appoint them as authorised dealers.

Further, in the office memorandum, the NPPA stated that complaints are also received wherein the manufacturer refuses to sell drugs directly to a person/ firm and redirects him to the authorized dealer. In such cases, the complainant requests the NPPA to invoke paragraph 28 of DPCO, 20.13.

The Drugs (Prices Control) Order, 2013, issued under Section 3 of the Essential Commodities Act, 1955, provides, under paragraph 28, that:

"Subject to the provisions of the Drug and Cosmetics Act, 1940 (23 of 1940) and the rules made thereunder, -

a) no manufacturer or distributor shall withhold from sale or refuse to sell to a dealer any drug without. good and sufficient reasons;

b) no dealer shall withhold from sale or refuse to sell any drug available to him to a customer intending to purchase such drug."

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In response to the complaints, the NPPA, through its O.M., stated, "It may be noted that the demand to procure drugs directly from the manufacturer or the demand to be appointed as an authorised dealer arises from the commercial interests of the complainant. This office has, time and again, clarified that commercial issues/ terms/ disputes etc. between the dealer and the concerned company or its distributor/stockist are not within the purview of or resolved by NPPA."

In addition to this, the office memorandum further added, "the manufacturers may note that they shall give utmost importance to public interest in all such cases and ensure proper distribution of drugs and ensure sufficient availability in the market."

"In case any aspect of the public interest is adversely affected in such cases, this office shall be duty bound to invoke Paragraph 28 and take appropriate action, including passing orders under Paragraph 3 of Drugs (Prices Control) Order, 2013 and/ or prosecution under Section 7 of the Essential Commodities Act, 1955." the OM added.