NATIONAL PHARMACEUTICAL PRICING में लूट

National Pharmaceutical Pricing Authority , Ministry of Chemicals and Fertilizers, Department of Pharmaceuticals and the Great Indian Courts part of Great Ramon Circus each ignoring its duty right up to Supreme Court- the story of how they killed the drug Doxofylline and allowed crores to be made to some on other drug by falling into the trap of the Ministry.

Normally everybody is expected to do his duty and by doing so it is the country which grows and gains but who is interested or was interested in this is an issue. The other day Secretaries said that they can take decisions but they are afraid of CBI. In this case CBI did not prevent them from taking black decisions but we as a public want to know as to why action was not taken against the concerned by the CBI. CBI ghost has been used to provide cover to the black deeds of several officers at the top who got the cover and shield to protect themselves although throughout they have been obliging their bosses during UPA regime. Their wrong doings are, however, a matter of record and we do not want and expect witch hunting but how the system will be cleansed unless you ask them as to why they did it and why the written policy and the law were ignored. We are devoting this write up to highlight what legal aspects were ignored and leave it to the authorities so that the systems improve and do not become a circus for enjoyment without any fruitful results. New Minister must ponder over and ensure that such things do not recur at least under his dispensation but he seems to be a boneless creature as per available inputs. Surely the Chief Justice of the Supreme Court also needs to look into so that such acts are not repeated in the Judiciary which has been directly and indirectly encouraging corruption.

2. Notification Nos. 1084(E) & No.1124(E) dated 30th April 2009 were issued by the National Pharmaceutical Pricing Authority under Para 9 (1) and (2) and para 11 of the Drugs (Prices Control) Order 1995 without notifying the price of bulk drug Doxofylline but by adopting the price of Theophylline, without identifying leader or getting data from him for fixation of ceiling price and by exercising suomottu powers which cannot be exercised for ceiling prices fixation. The notifications it is clear have been issued arbitrarily, without cogent reasons, without application of mind in utter disregard of Paragraph 9 (1), 7 and 2(c) and thus the same are arbitrary, illegal and without any basis. Earlier their own clarification (Ministry) in the case of Norfloxacin have clearly laid down that it has been decided that in future price of formulations would not be fixed without fixing the price of connected bulk drug. As such even the price of bulk drug adopted was arbitrary and without any basis besides it being of a different drug. Notwithstanding the merits of the whole issue, the action was not bonafide and the rights of producers were adversely affected by such unilateral action which is ultravires the provisions of DPCO 1995. Should Courts ignore it as the Supreme Court has done it must be a cause of concern for right thinking Indians? Bringing the Formulation of Bulk drug Doxofylline within the ambit of Price Control in such a manner was totally wrong and unjustified. This interrupted production and availability of the formulations based on the said bulk drug and was against the public interest in as much as even if the action of NPPA was held to be intravires no care was taken to see as to what should be the price of bulk drug Doxofylline to be adopted/ to be used for arriving at the prices of the formulations in the notifications indicated above. The Orders passed were unjust, wrong and bring hardship to all concerned. NPPA was supposed to develop responsive pricing mechanism but it ignored all the laid down principles and policies and evolved itself as a most irresponsible and corrupt organization and is not accountable to anybody. Where is the accountability of the NPPA for the wrong acts which were done by it and which are clearly established from the above facts. Why was the delegator sleeping? Was corruption not going on during the regime of UPA and agenda and minutes of NPPA meetings clearly reflect it? We take it that since present Ministers have not looked at these issues, they have become part and parcel of the same and we would suggest their removal.

3. Since the entire action was wrong the manufacturers of formulations filed review applications within the stipulated period under paragraph 22 of DPCO, 1995 and that was the only remedy available with them and getting no response they approached the Courts. The review petition was accepted as the producers complied with the ceiling price by not producing any batch and marketing the same after issuance of said notification .This position was confirmed to the Hon’ble Court as well as the NPPA who were also provided all the copies. The Court gave the order for disposing of the review application. The reviewing authority vide its order dated 2nd July,2009 based on the directions of the Delhi High Court observed in its said order that price fixation of Doxofylline formulations based on the price of Theophylline is wrong. Notification S.O.No.1124 (E) dated 30th April, 2009 as such became void ab initio even as per findings of the reviewing authority and the same is final as it was not the subject matter of litigation even by NPPA.. Although producers did not violate the notification as observed above but it is clear that notification was wrong and wrongly issued and also that reviewing authority did not pass order on all the submissions made despite the directions of the Hon’ble High Court. It also commented on use of paragraph 11 in the alleged ceiling price notification issued by NPPA. . Even the Supreme Court has not set aside the order of the reviewing authority but has dealt with the orders of the High Court which had taken up limited aspects of submissions before the reviewing authority as well as the High Court. For the sake of brevity we would deal with submissions of the producers at one place to show how Ramon Circus moves. One thing is, however, clear and must be a matter of investigation that from reviewing authority to NPPA to Courts no body did its duty. New Minister and the Prime Minister must be alarmed to see as to what has been going on. de growth or stoppage of production was deliberately brought about but why they took law into their hands is a hundred dollar question. Should Supreme Court not concern itself with such matters which are going on under its very nose? What the Ministers of the new Govt are doing what have they done to transfer wrong doers if nothing has been done then they are becoming a part of the system.

4. Manufacturers filed review application dated 21st May 2009 against the said notification based on the directions of the Delhi High Court dated 18th May, 2009 and also additional written submissions dated 2nd June 2009 and 12th June 2009 after the hearing on 25th May 2009. Manufacturers also submitted a review application dated 28th November 2009 against the notification dated 17th Nov, 2009 broadly raising the same issues as in the first application referred to above but the fact remains that review applications are pending with the Dept of Pharmaceuticals and without ensuring their disposal courts delivered the judgment in a well planned manner which one can openly see. All these documents are part of the proceedings in the Supreme Court in Civil Appeal No, 5117 of 2013 in the matter of Union of India v/s Mars Therapeutics and can be referred to. Kind attention is also invited to the review order dated 2nd July, 2009 which would clearly show that it is partial and does not deal fully with submissions made by the manufacturers. In the Cyanamid case it has been laid down by the Supreme Court that only remedy available with the aggrieved manufacturers is that they have a right to be heard against their review application and also all disclosures be made to them. The issue is why the Supreme Court and High Courts did not allow that process to be exhausted. Why and what for own laid principles are being violated. Review applications of manufacturers inter alia have made following submissions/ issues have been raised:–

(i) Doxofylline is not a derivative of Theofylline as it is a new drug. Since this issue has been dealt with by the Supreme Court it cannot be deemed to be pending and no body should press for the same but it is clear that issue has been wrongly decided and no body has gone into full facts. It would , however, be interesting for the new Govt to go into full facts and see what NPPA and Ministry have been doing. The hon’ble CJ would find the following interesting and would also come to the conclusion that what ever have been decided is wrongly decided if inherent features of DPCO, 1995 and the first schedule give any indications.

Theophyllinme is shown at S.No.34 of the First Schedule to DPCO, 1995 but it does not mean that it includes Doxofylline. Has it been so Oxytetracycline would have included Doxycycline but that being not the position, Doxofylline is required to be listed separately based on the criteria as it has nothing to do with Theophylline inspite of being produced from Theophylline even if it is admitted although it is not a fact. All these aspects should not have been ignored by the Hon’ble Court. The issue is very simple all those substances which metabolize to the base drug in the human body are salts, esters, derivatives, isomers, pseudoisomers etc of the base drug but if they have a separate metabolic activity then they are new molecules/ new drugs. The matter is not as simplicitor as the Hon’ble Court made it without any independent technical advise. These are facts which should not have been ignored by any body.

(ii). Under the Drug Policy, 1994 the drug does not fulfill inclusion criteria laid down in paragraph 22.7.2 of the Policy which has been even upheld by the Supreme Court in the case of CIPLA v/s Union of India and Others This submission of the manufacturers have been totally ignored by the reviewing authority as well as the High Court. Since as per the criteria of the Policy the drug was not includible in the First Schedule and even Theophylline would come out of the First Schedule as per details submitted by manufacturers the entire action was wrong and pre decided.

(iii) Procedure for fixing ceiling price is laid down in paragraph 9 of DPCO, 1995. Paragraph 2(c) of DPCO, 1995 also defines ceiling price as one which is fixed under paragraph 9 of DPCO, 1995. Both the notifications have been issued under paragraph 9 and 11 ignoring the mandate of paragraph 7 of DPCO, 1995. The notifications referred to stand as independent notifications and have been issued under paragraph 9 and 11. NPPA never followed the provisions of paragraph 9 as no major manufacturer was identified as provided in paragraph 9 of DPCO, 1995, no data was available and ceiling prices were notified based on assumed factors and data on a suomottu basis. All the factors and rates adopted are only notional. Such a notification cannot be issued under paragraph 9 and 11 as paragraph 11 cannot be used for fixing ceiling price at all. Paragraph 11 of DPCO, 1995 is meant for dealing with certain type of manufacturers and any order issued under this paragraph concerns such manufacturers only and others like us cannot be covered. Legal position as laid down in the DPCO, 1995 as well as the established procedures have not been followed in issuing the said notifications and their extension only in a forcible manner without any justifiable reasons reflects barbarism to which courts should not become a party. So far the courts have been shielding corruption and corrupt in the Ministry and NPPA have prospered.

(iv) Even in the second notification dated 17th Nov, 2009 which was expected to take into consideration all the correct procedures and provisions of DPCO, 1995, no regard has been paid even to the notified norms for conversion cost and packing charges under Paragraph 7 of DPCO, 1995 vis a vis actual costs details of which were made available by some manufacturers. Manufacturers submitted that conversion cost has been allowed at Rs.0.19 for 10’s pack of 200mg tablets as well as 10’s pack of 400mg tablets by assuming wrong weight of tablets. The conversion cost as taken is not correct. Similarly, packing material cost which has been taken at Rs.0.32 for 10’s pack of 200mg as well as 400mg tablets is not correct and is wrong. Similarly cost of excipients have been taken at Rs.0.11 for 10’s pack of both 200mg and 400mg tablets against actual cost of Rs.0.50 for 200mg tablets pack of 10’s. These are all pointers towards the fact that no rules have been followed in fixing the ceiling prices and the provisions of paragraph 9(1) and 7 of DPCO, 1995 stood ignored and have been given a go by. These aspects, not withstanding, material cost which has been taken at Rs. 3.04 for 200mg pack of 10’s and Rs. 6.08 for 400mg pack of 10’s against Rs.7.47 for 200mg pack of 10’s and Rs.14.94 for 400mg pack of 10’s notwithstanding the difference in excipients cost as indicated above are all wrong as manufacturers actual rate of purchase already available with NPPA was not used and NPPA never looked to the fact of actual selling price of bulk drug by the manufacturers giving the impression as if DPCO, 1995 was not applicable to them.
(v) Doxycycline(S.No.26) is produced from Oxytretracycline(S.No.14) and both are independently specified in the First Schedule to DPCO, 1995 based on the criteria of the Drug Policy, 1994. This is the inherent feature of DPCO, 1995 and should have been followed even if Doxofylline was held to be produced from Theophylline which is not the case. Even the settled position was ignored and the Hon’ble Supreme Court should have obtained the opinion of Dte. General Health Services. The Supreme Court did not go into this aspect although both these cases are similar as in both the cases new molecule occurs which does not metabolise to base drugs whereas all other salts esters and derivatives as identified by NPPA metabolise to the base drug while acting in the human body. This distinction cannot be ignored. Even this aspect was ignored by the Supreme Court where application of mind is less and copying of what the Govt said in the judgment is more and this becomes clear after reading the judgment. What has the Court to say on this. Should PM not look into such instances and what two Ministers are doing? To encourage production wrongs have to be corrected? We understand that if producers had Rs. 50 lakhs which were demanded all this would not have happened.

(vi) When it is a known fact that only remedy from the Executive for an aggrieved party is a REVIEW APPLICATION UNDER Paragraph 22 of DPCO, 1995 before passing any order the Hon’ble Courts should have seen that appropriate speaking orders have been passed on the submissions. The Courts ignored this aspect due to which producers and users have been subjected to hardship and deep routed corruption have been allowed.

Paragraph 12 and 13 of the judgment really make a mockery of the judicial system and show vulnerability and fallibility of the Courts and judges and should have been avoided at all costs. Our comments on both these are given below:-

“12.This paragraph is the exact reproduction of what NPPA has been stating without any independent examination and application of mind by the Hon ble Court. All these aspects are technical aspects and legal aspects. Technical aspects should have been got technically examined and legal aspects need to have been legally examined. The Hon’ble Court also failed to notice that no power was available with the NPPA to notify the price under Paragraph 11 of DPCO, 1995 in the official Gazette and extend it to all. Even the reviewing authority and Lt Single judge made some observations about use of Paragraph 11 of DPCO, 1995 and the court failed to take note of these. What the Court talks as an incentive for Doxofylline is without any basis. Chemistry of Doxofylline and Theophylline is different and how many molecules of Theophylline are used in Doxofylline and to what extent the structure undergoes changes would determine the material cost. It was neither its forte nor the Court should have entered into this area. NPPA also did not comply with Paragraph 3 of DPCO, 1995. The Court also failed to notice that the reviewing authority has struck down the notification dated 28th April, 2009 on the ground that it is based on the price of Theophylline and secondly price of Doxofylline was required to be fixed first. Not only this , the Hon’ble Court was wrongly informed. In fact NPPA struck a deal with Cadila Healthcare Limited where under they were allowed free pricing for Deriphyllin (Hydroxy Ethyl Theophylline) for a period of five years as a quid pro quo to agreeing for all the conditions on Doxofylline. We invite attention to the minutes of the 3rd Meeting of the Expert Committee held on 30th Sept, 2009 wherein in the minutes all the details are available. Notification S.O. NO. 1467(E) dated 17th June, 2010 where exemption to Deriphyllin have been notified for a period of five years from the date of notification is in records. The Court must see these minutes. Not only the Hon’ble Court placed reliance on the wrong facts but it was also mislead by the NPPA as the only aim of NPPA is to facilitate collection of money and the Courts facilitated this process. Suomottu investigation by the Court can help to set the matters right.
13.The submissions of Additional Solicitor General were wrong and perverse and ought to have been independently examined by the Court instead of placing reliance on them. Firstly, any drug can be produced from any other drug or its precursor but it would not necessarily result in the production of a salt , ester, derivative or an isomer of that drug. It can be a new drug which does not metabolize to the base drug while acting in the body. As indicated above, as an inherent feature of DPCO, 1995 Oxytetracycline and Doxycycline are listed in the first schedule based on the criteria of the Policy. Doxycycline is produced from Oxytetracycline and this is the only route available for its production. The learned Judge should have taken clarification from Additional Solicitor General on this issue before agreeing to what she stated. Doxycycline v/s Doxofylline stand on the same footing as in both these cases new molecule/new drug is produced which does not metabolize to the base drug.”
These are all verifiable facts and need to be verified as a part of review by the Minister so as to know as to what has been going on but the great circus goes on. Ministry which is overseeing authority and should set an example in deciding what is right and what is wrong is more a part of circus rather than a leader by example. All its officers were part of corruption process. They are justifying wrong acts but are not aware of the position that to sit on the review and keep some issues pending out of the review is against the fundamental rights of the producers/manufacturers as already laid down in the Cyanamid case by the Supreme Court.. Minister must check as to where the reminders and the letters written by the manufacturers asking for review have gone. Ultimately he is the reviewing authority and the entire circus is going on in his name These facts clearly show that instead of becoming a part of the circus, Supreme Court should have stopped this circus. It can do so even now by fixing the responsibility of the liars suomottu.

5. It is only Ministry which can keep fully or partially review applications pending for a period of over five years and that shows the level of accountability, concern of top bureaucrats for production and growth and everything goes on in the name of Minister who happens to be the reviewing authority. The new Minister has automatically become a part of the circus and we congratulate him but expect him to act against the forces that are surrounding the system but it seems that Minister is slow and is going by what is appearing in economic times duly arranged by the bureaucrats of the Ministry/NPPA and some agents of the companies in which members of great Ramon circus are interested as such companies have been beneficiaries. We have not seen anything encouraging from the Minister although several complaints of how the net is operating have been sent to him. We feel that he should devote time to work instead of flying high. His charge is very critical and he should appreciate it. He has to break the nexus whether it is Fertilizers or drugs and pharmaceuticals.
6. To substantiate that the issues out of review are pending with the Ministry extracts from Supreme Court judgment and High Court judgment are given hereunder to substantiate the above position for the satisfaction of all and to enable independent observers to appreciate the real position and the ground reality on the subject:-

“The finding of the Division Bench of the High Court on the said issue was as under:-

“16. The final aspect of the matter is with regard to the satisfaction of the criteria specified in paragraph 22.7-2 of the New Drugs Policy. Just as the learned Single Judge did not feel it necessary to go into this issue in view of the conclusion arrived at on other two aspects, we also think that it would not be necessary to deal with this aspect of the matter.”

The Supreme Court in Para 16 of the judgment notes that the High Court did not feel it necessary to go into the issue whether impugned notifications were issued after satisfaction of criteria specified in para 22.7.2 of the New Drug Policy. It is as such clear that neither the High Court nor the Supreme Court have decided the issue of Drug Policy i.e. whether or not the drug Doxofylline satisfies the criteria laid down in Para 22.7.2 of the Drug Policy, 1994 and other issues raised by us in our application for review under Paragraph 22 of DPCO, 1995. This was necessary to decide the validity of the notifications.

7. There cannot be better demonstration of Great Ramon Circus and the role that was played by the Courts and so called Constitutional authorities. Wrong doings as this case demonstrates became the order of the day. Was NPPA not expected to follow the rules and if it did not follow whom to blame and where to go for re dressal of grievances? When Ministry as a reviewing authority does not address your grievances where to go? Courts, when they do not address their grievances where to go. Courts throughout knew that issues raised by the manufacturers were pending with the reviewing authority still they did nothing and passed no order. Do you need such courts and judges who have no accountability and are least concerned with the progress of this country. To conceal their actions they know only public interest and couch all their judgments under this phrase and going by the facts of this case, it becomes clear that they do not know the meaning of public interest also. Well the great Ramon Circus is still on and continues. We as public are worried as to how these thick skinned people be brought to public accountability. Unless the concerned Minister goes into all these personally nothing is expected and the PM would find that such cases have become the rule.

8. Rights of judges are all right, they enjoy a constitutional position is also all right, but public has also some rights. Where judges act wrongly where to go and complaint is an issue which is not settled and we expect the Govt to settle this aspect also where right thinking people can complain and send the facts so that wrong and mischievious judgments can be reviewed by an independent authority particularly in the area of pricing/economic matters.

9. We said that entire Circus was to help some other company. M/S CaDILA IN THEIR German Remedies unit have been producing Hydroxy Ethyl Theophylline(Deriphyllin) and Deriphyllin retard tablets if the past records are looked into. This unit applied for exemption from price control on the ground that they have developed a new delivery system. Their claims were in fact false but once you are a part of the Circus everything is OK. Govt had constituted a High Level Committee to consider such requests. Khandelwal Labs also submitted an application for price exemption on the ground of developing new delivery system in respect of Cefi XL and their application was taken up for consideration at the 3rd Meeting of the Expert Committee held on 30th Sept, 2009 wherein they were also invited for giving clarifications, if any, needed on the subject and in view of all the clarifications and details as provided their case was considered and recommended for approval. Cadila’s case was also considered at the said meeting and minutes could be seen. It would be observed that at the said meeting Cadila was asked to give a letter that Doxofylline is a derivative of Theophylline and that they would abide by the price of Doxofylline formulations. Case of Khandelwal Labs was also taken up and recommended at the same meeting but no notification was issued and now rejection has been communicated to them without assigning any reasons. The only reason seems to be that they could not afford to pay as to what was demanded. Openly money played the role but nothing is expected from any body as they have themselves created the circus.

10. We are told that Great Ramon Circus goes on and on but who will set right these wrongs and what is the guarantee that such wrongs would not be repeated when perpetuators continue to be part of the system. The causes of corruption and such ultravires acts must be investigated to their logical conclusion. Wrong doers cannot be given immunity court or no court. We have been continuously reporting such acts to keep the torch burning although Press Council of India have been threatening us of action at the instance of NPPA. The hands of NPPA are quite long as they are the owner of Great Ramon Circus. The PM and the Minister must understand this circus fully. If any further details are required we would provide. There are Barat of people in the Ministry and NPPA virtually doing nothing but Circus of Corruption. They need to be weeded out. There are judgments which have not been implemented across the board, there are notices which are not issued to all, there are violations which are not acted upon against all but in a selective manner, there are interpretations based on which some have been issued notices and some have been left out. The authorities have to explain as to why they have been doing it and at whose instance. They cannot merely get away after doing all this. It is sad and unfortunate that Courts also became a part of this Circus and their judgments do not appeal to any sane person. Such judgments which are against the basic law must be thrown to the dust bin as all involved were part of great Roman Circus. The right of a common citizen and professionals in such matters where judges do excesses must be protected.

The Circus must stop and the actors be shifted fast and first. Is it the way our system should function? What have we achieved over the past one and a half years except allowing this circus to continue?

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