Lupin Limited vs. Union Of INDIA & Ors

Held

The Court held that the ceiling prices fixed under the impugned notifications were not applicable to the subject formulations in the DPI dosage forms. The reasoning was that the earlier price notifications dated April 27, 2016, and May 09, 2016, specifically mentioned only MDI dosage forms and did not consider the Price to Retailer (PTR) of DPI dosage forms. Consequently, the impugned notifications, which merely revised existing prices based on WPI and GST, were also inapplicable to DPI dosage forms. The Court noted that NPPA had subsequently issued a notification on February 26, 2019, fixing a separate ceiling price for DPI dosage forms, addressing the petitioner's grievance. The Court found the petitioner's apprehension regarding the exception clause in the superseding notification to be unfounded, as the review order already acknowledged the inapplicability of earlier prices to DPI forms. The Court set aside the impugned notifications to the extent they purported to fix ceiling prices for DPI dosage forms and declared any demands raised on that basis as unsustainable.

Facts

The petitioner, Lupin Limited, challenged notifications issued by the National Pharmaceutical Pricing Authority (NPPA) that fixed ceiling prices for Budesonide + Formoterol and Tiotropium formulations in Dry Powdered Inhalation (DPI) dosage forms. The petitioner argued that the ceiling prices were not computed according to the Drugs (Prices Control) Order, 2013 (DPCO). The controversy arose because previous notifications in 2016 specified ceiling prices for Metered Dosage Inhalation (MDI) forms but not explicitly for DPI forms. The impugned notifications in 2017 and 2018 revised these prices based on WPI and GST, but also included DPI forms, which the petitioner contended was incorrect due to material differences between MDI and DPI technologies and price points.

Key Issues

1. Whether the ceiling prices fixed by the NPPA for Budesonide (A) + Formoterol (B) and Tiotropium Inhalation in DPI dosage forms, as notified in SO No. 1039 (E) dated April 01, 2017, SO No. 2058 (E) dated June 30, 2017, and SO No. 1461 (E) dated April 02, 2018, are in accordance with the provisions of the DPCO, 2013? Petitioner's arguments: The petitioner contended that the DPI dosage forms are materially different from MDI dosage forms, involving different technology and price points. They argued that the previous notifications in 2016 only considered MDI formulations for price fixation, and therefore, the subsequent revised notifications, which included DPI forms, were incorrectly applied. The petitioner asserted that NPPA had never fixed ceiling prices for DPI forms previously, and thus, they could not be expected to comply with prices not properly notified for their specific dosage form. Revenue's arguments: The judgment does not explicitly record arguments made by the revenue or respondents.