BackWyeth Ltd to contest Bombay high court order on overpricing
Wyeth Ltd to contest Bombay high court order on overpricing
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Mumbai: Wyeth Ltd, the Indian subsidiary of US drug maker Wyeth Inc., is set to move the country’s apex court challenging an order bythe Bombay high court asking it to immediately pay Rs13.20 crore for allegedly overcharging patients for an anti-inflammatory drug.
The National Pharmaceutical Pricing Authority (NPPA), which regulates drug prices in India, had last year asked Wyeth to deposit Rs44.07 crore with the Drugs Prices Equalization Account (DPEA) for overpricing tetracycline hydrochloride from 1981 to 1987.
The deposit included Rs13.20 crore as principal and Rs31.86 crore in interest up to November 2007.
NPPA fixes the maximum price for drugs sold in India under the Drug Price Control Order and assesses market prices at regular intervals.
The DPEA collects money from pharma companies for overpricing drugs. This money goes into the government’s coffers.
Wyeth had filed a writ petition in the Bombay high court disputing the charges.
The court granted a stay on the recovery of the interest amount, but subject to deposit of the principal amount and furnishing security for the interest within six weeks.
“Based on legal advice, the company has now decided to appeal to the Supreme Court against the order of the Bombay high court," the company said in a statement to the Bombay Stock Exchange on Monday. NPPA had in March issued a similar notice to drug maker Cipla Ltd to pay Rs62.85 crore towards interest for allegedly overpricing drugs.
In April 2007, NPPA had slapped a Rs748.27 crore demand notice on the alleged overpricing of drugs such as ciprofloxacin, norfloxacin, salbutamol and theophyline, which Cipla challenged in courts.
Wyeth said in its statement that it had challenged the charge of overpricing tetracycline hydrochloride in courts even earlier.
“... The Supreme Court order of April 1987 in this matter upheld the government’s right to fix prices under Drugs (Prices Control) Order, 1979. However, the government was directed to review the prices fixed with the company," the company said in its statement.
Wyeth has been selling several anti-infective and anti-inflammation drugs in India for many years.
The company has blamed the government for wrongly assessing manufacturing and marketing costs of drugs to fix price limits.
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