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LATEST NEWS UPDATES | Superior packaging can’t be used to raise prices: High Court to Sanofi SA -Maulik Vyas

Superior packaging can’t be used to raise prices: High Court to Sanofi SA -Maulik Vyas

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published Published on Apr 18, 2013   modified Modified on Apr 18, 2013
-The Economic Times


MUMBAI: In a setback to Sanofi SA, the Bombay High Court has dismissed the plea filed by the French pharmaceutical major saying 'superior' packaging cannot be the argument for higher pricing of drugs. The court order also clarified that fixing the prices of drugs in the country will remain in the domain of the National Pharmaceutical Pricing Authority.

In its argument, the pharmaceutical company had said it had relied on a February 2006 order, which said a pharmaceutical company could add an amount of Rs 0.08 per 10 tablets or capsules towards hologram to the latest ceiling price fixed for such formulations.

Earlier, dismissing the argument, the National Pharmaceutical Pricing Authority asked the company to reduce the price immediately and deposit over Rs 5 crore to the authorities for overcharging. Sanofi then challenged the pricing authority in the high court.

NPPA is an organisation set up by the central government to establish the price of controlled bulk drugs and formulations and to enforce prices and availability of the medicines, under the Drugs (Prices Control) Order, 1995. The organisation is also tasked with recovering amounts overcharged by manufacturers.

The division bench comprising Justice SJ Vazifdar and Justice JJ Ganoo rejecting the plea said in its order, "In these circumstances, we are not inclined to grant interim reliefs staying the demand. However, the amounts, if any, paid by the petitioners shall be subject to the result of this writ petition."

Sanofi SA's contention was that instead of hologram technology it is using 'Vignette Technology' used in Western countries as an anti counterfeit measure, which is a more expensive technology to employ.

According to the judgement, the world's fourth-largest pharma company by prescription sales claimed that the hologram used by it was being counterfeited and coming off the strips/wrappers containing the tablets/capsules. Hence, it started using an equally effective if not more advanced technology known as vignette technology.

"This order will have wider implications," said Advait Sethna, counsel who argued for state authorities in the case. "Many other pharmaceutical companies were looking at this as a test case since they are also considering this packaging technology." An email query sent to the company did not elicit any response. Lawyers involved in the case say the pharmaceutical giant may challenge the order in the Supreme Court.


The Economic Times, 18 April, 2013, http://economictimes.indiatimes.com/news/news-by-industry/healthcare/biotech/pharmaceuticals/superior-packaging-cant-be-used-to-raise-prices-high-court-to-sanofi-sa


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