In a landmark judgment, the High Court of Kerala has validated the state Drugs Control Department’s regulatory action targeting deceptive advertising and vague discount boards outside retail pharmacy outlets.
The single-bench judgment, delivered by Justice Bechu Kurian Thomas, effectively dismissed a batch of writ petitions filed by pharmaceutical retailers challenging a departmental circular. The court ruled that while trade regulations do not bar pharmacies from selling medicines below the Maximum Retail Price (MRP), regulatory bodies possess the full legal authority to intervene to prevent consumer exploitation through misleading trade claims.
The legal battle erupted over a circular issued by the Office of the Drugs Controller on September 4, 2024, which introduced stringent compliance mandates for trade licensing. The directive required all fresh applicants as well as existing licensees seeking renewal to submit a mandatory affidavit undertaking that they would not exhibit discount boards outside their premises. Challenging the authority of the state regulator, retail operators including Pharmadude Pharmacy (Vannappuram), represented by its managing partner Lijo M Jose, alongside separate petitioners led by Biju Y.S, moved the high court claiming the directive severely infringed upon their fundamental right to carry on trade and business.
The petitioning chemists strongly contended that by offering medicines at reduced rates, they were serving patient interests by sacrificing a portion of their own trade margins. They argued that since there is no statutory bar under the Drugs and Cosmetics Act, 1940, or the Drugs Rules, 1945, against selling medicines below the printed MRP, trade channels should be permitted to disclose these rebates openly to consumers. The retailers further alleged that forcing the removal of display boards was an indirect attempt by the licensing authority to discourage discounting and compel outlets to stick to uniform pricing.
Conversely, a separate petition was moved by P.L. Jacob of Chalakudy, who sought the strict implementation of the Drugs Controller’s anti-misleading circular. The petitioner produced evidence highlighting that several medical shops erected massive display boards promising arbitrary 50 percent to 60 percent price deductions simply to entice patients. According to the petition, consumers entering these pharmacies were routinely denied the blanket price cuts or handed negligible discounts, exposing an unhealthy pattern of predatory and misleading commercial exploitation.
Defending the regulatory framework, senior government pleader V.S. Sreejith and government pleader Laya Mary Joseph clarified that the state administration is not against pharmacies passing financial benefits or discounts to the public. The state’s primary concern remains focused on deceptive promotional boards projecting unrealistic, vague discount claims of up to 80 percent. The regulatory authorities also raised public safety flags during the hearings, pointing out that the source and quality of certain heavily discounted drugs procured from outside Kerala remained highly questionable.
Highlighting the verdict, the High Court of Kerala dismissed the writ petitions filed by the pharmacy owners, W.P.(C) No. 39706 of 2024 and W.P.(C) No. 41978 of 2024, while allowing W.P.(C) No. 1447 of 2025 filed by the aggrieved citizen. Justice Bechu Kurian Thomas observed that constitutional trade liberties cannot be used as a shield by private businesses to indulge in misleading promotional conduct. The court affirmed that the licensing authority holds ample incidental power to dictate reasonable conditions in the licensing affidavit to ensure transparent and ethical trade practices.
The final ruling took into account a modified undertaking rephrased by the Drugs Control Department during the course of the litigation to balance regulatory monitoring with trade practicalities. Under the rephrased terms, licensees must declare: “We undertake that we shall not display any discount boards containing misleading or vague claims regarding the price of drugs”. The court concluded that this refined stipulation does not curtail genuine price reductions or the presentation of verified manufacturer price lists inside the shops, thereby fully permitting the state enforcement wings to initiate punitive action against non-compliant pharmacies.
