Bombay High Court
Pfizer Ltd. And Another vs Union Of India And 2 Others on 7 October, 2025
Author: Sarang V. Kotwal
Bench: Sarang V. Kotwal
2025:BHC-OS:17900-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.2519 OF 2018
Pfizer Ltd and another ....Petitioners
Versus
Union of India and
others ....Respondents
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Mr. Navroz Seervai, Senior Advocate a/w. Arti Raghavan, Tavleen
Saini i/b. Sujit Lahoti and Associates for the Petitioners.
Mr. Y.S. Bhate, Advocate a/w. Rui Rodrigues, D.P. Singh for the
Respondents.
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CORAM : SARANG V. KOTWAL &
SHYAM C. CHANDAK, JJ.
RESERVED ON : 23rd SEPTEMBER 2025
PRONOUNCED ON : 7th OCTOBER, 2025
JUDGMENT :[PER SARANG V. KOTWAL, J.]
1. Heard Mr. Navroz Seervai, learned Senior Counsel for the Petitioners and Mr. Y.S. Bhate, learned counsel for the Respondents.
2. The previous orders passed on 6.8.2019, 19.12.2024 and 3.7.2025 indicated that the matter is to be disposed of at the admission stage. Therefore, with consent of the parties, we have heard the matter for final disposal at the admission stage.
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3. Hence, Rule. Rule is made returnable forthwith with consent of the parties.
4. The main three prayers in this Petition are as follows:
(a) That this Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction under Articles 226 of the Constitution of India :
(i) calling for the records and proceedings relating to the show cause notice dated 8th March 2018 (being Exhibit "AC" hereto) issued by Respondent No.3, and after going into the validity, legality and/or propriety of the same, to quash and/or set aside the same;
(ii) calling for the records and proceedings relating to the letter dated 15th March 2018 (being Exhibit "AD"
hereto) issued by Respondent No.3, and after going into the validity, legality and/or propriety of the same, to quash and/or set aside the same;
(iii) calling for the records and proceedings relating to the impugned demand notice dated 20th June 2018 (being Exhibit "AI" hereto) issued by Respondent No.3, and after going into the validity, legality and/or propriety of the same, to quash and/or set aside the same;
(b) That this Hon'ble Court be pleased to issue a writ of Prohibition, or a writ in the nature of Prohibition, or any other appropriate writ, order or direction under Article 226 of the Constitution of India prohibiting the Respondents by themselves, their subordinate officers, servants and agents 2 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: :3: os-wp-2519-18-J-F.odt from taking any steps in the nature and/or in any manner acting in furtherance of the impugned show cause notice dated 8th March 2018, impugned letter dated 15th March, 2018 and impugned demand dated 20th June, 2018 (being Exhibit "AC", "AD" & "AI" hereto)
(c) That this Hon'ble Court be pleased to issue a writ of Mandamus, or a writ in the nature of Mandamus, or any other appropriate writ, order or direction under the provisions of Article 226 of the Constitution of India against the Respondents :
i. Ordering or directing Respondent No.3 to rectify the IPDMS so as to recognise the subject formulation as a non-scheduled formulation in the IPDMS:
ii. Ordering or directing the Respondent No.3 to forthwith withdraw the (I) impugned show cause notice dated 8 th March, 2018 (being Exhibit "AC" hereto), (ii) the impugned letter dated 15th March 2018 (being Exhibit "AD" hereto), and (iii) the impugned demand notice dated 20th June 2018 (being Exhibit "AI" hereto)".
5. Learned Senior Counsel for the Petitioners submitted that he is not pressing prayer clause (a)(ii) concerning the letter dated 15.3.2018 being Exhibit-AD of the Petition. Prayer clause (b) depends on prayer clause (a). He is not pressing prayer clause (c)(i);
and prayer clause (c)(ii) is almost similar to prayer clause (a). Therefore, in this Petition, we are considering the prayer clauses (a) 3 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: :4: os-wp-2519-18-J-F.odt
(i) and (a)(iii) only.
6. We have heard learned counsel for the parties for deciding the validity of those notices and the letters annexed at Exhibits-'AC' & 'AI' of this Petition. The Petitioner No.1 is a Company incorporated under the Companies Act, 1913 and is engaged in the business of manufacturing and marketing pharmaceutical formulations / products. The Petitioner No.2 is the Company Secretary of the Petitioner No.1. For the sake of convenience, in the following discussion, the Petitioner No.1 is referred to as the "the Petitioner".
7. The Respondent No.1 is the Union of India represented by the Secretary, Ministry of Health and Family Welfare, Government of India. The Respondent No.2 is the Union of India represented by the Joint Secretary, Ministry of Chemicals and Fertilizers, Government of India; and the Respondent No.3 is the National Pharmaceutical Pricing Authority, Department of Chemicals and Petro-Chemicals, Ministry of Chemicals and Fertilizers, Government of India.
8. The subject matter of this Petition is the formulation by 4 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: :5: os-wp-2519-18-J-F.odt the name "Wysolone DT'. The impugned show cause notice mentions "Wysolone 10 Tablets" containing Prednisolone 10 mg Tablets. The Drugs (Prices Control) Order, 2013 (for short, 'the DPCO 2013') had Schedule-I. It was substituted vide the notification dated 10.3.2016 issued by the Ministry of Chemicals and Fertilizers (Department of Pharmaceuticals). The Schedule-I comprises of National List Of Essential Medicines 2015 (for short, 'NLEM 2015'). The list gives names of the different formulations, level of healthcare as Primary, Secondary and Tertiary; and in the last column it mentions the manner of administering those drugs viz., whether they are Tablets, Injections or Capsules in a particular form. The main issue involved in this Petition is regarding the Explanation which is mentioned at the end of the list in this Schedule. The Explanation mentions as to how the formulation and the form of administering that formulation is listed in NLEM, 2015 so that it lays down as to which formulation in which form is subject to price control. The DPCO 2013 was notified w.e.f. 15.5.2013. It sought to regulate prices of the scheduled formulations as included in the First Schedule. According to the Petitioners, the non-scheduled formulations, which were not specified in the First Schedule, were 5 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: :6: os-wp-2519-18-J-F.odt not subject to the rigors of the price control.
9. The Respondent No.3 issued a notification bearing S.O. 1819(E) dated 18.5.2016, fixing the sale price of Prednisolone Tablet having the strength of Prednisolone-5mg at Rs.0.52 per tablet and Prednisolone-10mg at Rs.0.90 per tablet.
10. The rival contentions in this Petition are whether the dispersible tablets of the formulation Prednisolone is covered under the Schedule and hence is subject to the price control or it is not so covered and, therefore, is not subject to the price control.
11. The Respondent No.3 issued a show cause notice dated 8.3.2018, annexed at Exhibit-AC, to the Petitioner asking the Petitioner to show cause within thirty days from receipt of the notice as to why action should not be taken to recover the over-charged amount of Rs.3,85,56,337/- along with appropriate interest from the Petitioner. It was mentioned in the show cause notice that the Petitioner had manufactured/sold the Scheduled Formulation 'Wysolone 10 Tablets' containing scheduled formulation Prednisolone 10 mg Tablets at a price of Rs.15.58 for 15's tablets against the ceiling price notified of Rs.0.90 for 1 tablet. It was further mentioned 6 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: :7: os-wp-2519-18-J-F.odt that as per working schedule of NPPA, Wysolone DT 10 mg tablets have been taken into consideration at the time of price fixation; and hence it was a scheduled formulation. According to that notice, the Petitioner had charged the said amount in excess from the customers for the period from November, 2016 to October, 2017.
12. The show-cause notice dated 8.3.2018 was followed by another letter dated 15.3.2018, annexed at Exhibit-AD, issued by the Respondent No.3 calling upon the Petitioner to provide batchwise production and sale details along with corresponding MRP from the period 1.9.2014 till 15.3.2018, duly certified by Chartered / Cost Accountant within 15 days, for further examination of the case. The Petitioner replied to the letter dated 15.3.2018 issued by the Respondent No.3 through their reply dated 11.4.2018 requesting to change the said formulation from 'scheduled' to 'non-scheduled'. Finally, the Respondent No.3 issued a demand notice for over- charging the aforesaid amount with interest and asked the Petitioner to deposit Rs.4,60,60,240/-. All these annexures at Exhibits-AC, AD and AI are under challenge in this Petition.
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SUBMISSIONS OF MR. SEERVAI, LEARNED SENIOR COUNSEL FOR THE PETITIONERS:
13. Mr. Seervai invited our attention to the definitions of the 'scheduled formulation', 'non-scheduled formulation', and 'National List of Essential Medicines'. He invited our attention to the reference to Prednisolone at entry No.3.7 in NLEM 2015. He submitted that the said entry specifically mentions - Tablet 5 mg, Tablet 10 mg, Tablet 20 mg, Oral liquid 5 mg/ 5 ml and oral liquid 15 mg/5 ml. He submitted that there is no reference to Dispersible Tablet (DT) or Dispersible Tablet 10 mg (DT 10 mg). His main thrust of argument is that this would clearly mean that 'Wysolone DT 10 mg', which is corresponding to Prednisolone formulation is not included in NLEM 2015 because the Dispersible Tablet is not included in that particular column against entry No.3.7 for Prednisolone. He invited our attention to various other entries, where the dispersible tablets were specifically mentioned in NLEM 2015. He referred to entry Nos.2.1.1 [Acrtylsalicylic acid], 6.4.3.1.3 [Lamivudine(A)+, Nevirapine(B) +, Stavudine(C)], 6.4.3.1.5 [Stavudine(A)+, Lamivudine(B)], 6.4.3.2.2 [Nevirapine], 7.1.1 [Acetylsalicylic acid], and 12.5.1 [Acetylsalicylic acid].
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14. Mr. Seervai relied on the Explanation below the Schedule of NLEM 2015 to contend that 'Wysolone DT 10 mg' not having been included in this list, would be outside the Schedule; and hence was not subject to price control.
15. Mr. Seervai relied on the Office Memorandum dated 20.4.2017 issued by the Ministry of Chemicals and Fertilizers, Department of Pharmaceuticals, Government of India. It was mentioned in the memorandum that the NPPA i.e. the Respondent No.3 was requested to comply with the decision taken in the meeting on "Review of Pharma Issues" by the Principal Secretary to P.M. on 28.3.2017. The decision was as follows :
"The price of a drug not to be revised before a period of 5 years, except revision based on WPI or on application made by a company itself or on the orders of a competent court. Any drug not included to NLEM should not be part of DPCO Schedule-I."
16. Mr. Seervai relied on this direction that the drug which is not included in NLEM should not be a part of DPCO Schedule I.
17. Mr. Seervai relied on the report of the Core-Committee for revision of the NLEM. The report was issued in November, 2015.
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The Core-Committee was constituted by the Ministry of Health and Family Welfare, Government of India to deliberate and decide on the criteria for inclusion and deletion of medicines in the NLEM. Mr. Seervai submitted that this report gives indication as to how the NLEM is to be read along with its Explanation. The report mentions the specific issues deliberated during the revision process. One of the issues was incremental innovation. He further submitted that the explanation under the Schedule is based on this report.
18. Mr. Seervai relied on the judgments of a Single Judge Bench of the High Court of Delhi in the case of Modi-Mundipharma Private Limited v. Union of India & others 1 as well as in the case of Intas Pharmaceuticals Limited and another v. Union of India and another2.
19. Mr. Seervai submitted that the National List of Essential Medicines was modified in the year 2022 through the notification dated 11.11.2022. At the end of the list of formulations, it was mentioned that 'All modified release formulations of same strength such as sustained release, controlled release, extended release, prolonged release etc. are included'. Therefore, NLEM 2022 covers Prednisolone at entry No.3.6 which is mentioned as Tablet 5 mg, 1 2018 SCC OnLine Del 9904 2 2018 SCC OnLine Del 11328 10 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 11 : os-wp-2519-18-J-F.odt Tablet 10 mg, Tablet 20 mg, Oral liquid 5 mg/5mL(p), Oral liquid 15 mg/5mL(p) and it would cover the dispersible tablets because the modified release formulations of same strength are all included. In the NLEM 2011 there were four columns, namely, name of medicine, category, route of administration and strength. Against the name Prednisolone, the route of administration was mentioned as 'Tablets'. In the last column the strength was mentioned as 5mg, 10mg and 20mg. Therefore, under that list also there was no distinction between the tablets and dispersible tablets. In comparison to both these lists of the years 2011 and 2022, the list in NLEM 2015 is different because of the Explanation offered below the list. The Explanation shows that there was a distinction between the ordinary tablets and the dispersible tablets. He relied on paragraph-17 of the Drugs (Prices Control) Order, 2013 which reads as under :
"17. Amendment of the list of scheduled formulations.-- (1) A decision to amend the First Schedule, clearly stating the reasons thereof, shall be taken by the Government within sixty days of receipt of communication from the Ministry of Health and Family Welfare and the amendment(s) or revision, if required, in the First Schedule shall be notified and thereafter, the ceiling price(s) for the medicine(s) added in the First Schedule shall be fixed as per the provisions of this order within a period of sixty days from the date of the notification."
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20. Mr. Bhate submitted that the list is published by the Respondent No.1. The Respondent No.3 is the Price Fixing Authority.
Prednisolone is an Active Pharmaceutical Ingredient (API) and Wysolone is the brand name. He submitted that in all the three lists i.e. NLEM 2011, NLEM 2015, NLEM 2022 only the 'tablets' are mentioned. Therefore, if the dispersible tablets are covered under NLEM 2011 and NLEM 2022 then there is no reason to interpret that they would not be covered under NLEM 2015. He relied on paragraph-32 of the DPCO 2013 and in particular on sub-paragraph
(iii) of paragraph-32. Said Paragraph-32 reads thus:
"32. Non-application of the provisions of this order in certain cases.-- The provisions of this order shall not apply to, --
(i) a manufacturer producing a new drug patented under the Indian Patent Act, 1970 (39 of 1970) for a period of five years from the date of commencement of its commercial marketing by the manufacturer in the country;
(ii) a manufacturer producing a new drug in the country by a new process developed through indigenous Research and Development and patented under the Indian Patent Act, 1970 (39 of 1970)(process patent) for a period of
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(iii) a manufacturer producing a new drug involving a new delivery system developed through indigenous Research and Development for a period of five years from the date of its market approval in India:
PROVIDED that the provision of this paragraph shall apply only when a document showing approval of such new drugs from Drugs Controller General (India) is produced before the Government.
(iv) xxxxxxx Explanation.-- Notwithstanding anything contained in this Order, for the purpose of this paragraph "new drug"
shall have the same meaning as is assigned to under rule 122E of the Drugs and Cosmetics Rules, 1945."
21. Mr. Bhate relied in particular on Paragraph-32(iii) and the Explanation. He submitted that if a manufacturer takes advantage of keeping his formulation outside the Schedule, he has to show that the new drug involves a new delivery system and the concession is available for a period of five years from the date of its market approval in India. He submitted that the emphasis is on the 'approval in India'. Therefore, it can only be a new delivery system if it has an approval given by the authorities. He referred to the meaning of 'New Drug' as assigned to that word under Rule 122E of 13 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 14 : os-wp-2519-18-J-F.odt the Drugs Rules, 1945. As per Rule 122E the definition of 'New Drug' is as follows :
"122E. Definition of new drug For the purpose of this part, new drug shall mean and include--
(a) A drug, as defined in the Act including bulk drugs substance [or phytopharmaceutical drug] which has not been used in the country to any significant extent under the conditions prescribed, recommended or suggested in the labelling thereof and has not been recognized as effective and safe by the licensing authority mentioned under rule 21 for the proposed claims:
PROVIDED that the limited use, if any, has been with the permission of the licensing authority.
(b) A drug already approved by the Licensing Authority under rule 21 for certain claims, which is now proposed to be marketed with modified or new claims, namely, indications, dosage, dosage form (including sustained release dosage form), and route of administration.
(c) A fixed dose combination of two or more drugs, individually approved earlier for certain claims, which are now proposed to be combined for the first time in a fixed ratio; or if the ratio of ingredients in an already marketed combination is proposed to be changed-- with certain claims viz., indications dosage, dosage form (including sustained release dosage form) and route of administration) (See items (b) & (c) of Appendix VI to Schedule Y.) Explanation. -- For this rule:
(i) all vaccines and Recombinant DNA (r-DNA) derived drugs shall be new drugs unless certified otherwise by the Licensing Authority under rule 21;
(ii) A new drug shall continue to be considered as new drug for a period of four years from the date of its first approval."
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22. Shri Bhate submitted that the Drugs Rules, 1945 were issued in exercise of the powers conferred by Sections 6(2), 12, 33 and 33N of the Drugs and Cosmetics Act, 1940. Under the same powers i.e. under the Drugs and Cosmetics Act, 1940, in the year 2019 new Rules were framed as The New Drugs And Clinical Trials Rules, 2019. The 'new drug' is also defined under those Rules of 2019. Rule 2(w) defines 'New Drug' as follows:
"2. Definitions. (1) In these rules, unless the context otherwise requires-
xxxxxx xxxxxx (w) "new drug" means, --
(i) a drug, including active pharmaceutical ingredient or phytopharmaceutical drug, which has not been used in the country to any significant extent, except in accordance with the provisions of the Act and the rules made thereunder, as per conditions specified in the labelling thereof and has not been approved as safe and efficacious by the Central Licensing Authority with respect to its claims; or
(ii) a drug approved by the Central Licensing Authority for certain claims and proposed to be marketed with modified or new claims including indication, route of administration, dosage and dosage form; or
(iii) a fixed dose combination of two or more drugs, approved 15 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 16 : os-wp-2519-18-J-F.odt separately for certain claims and proposed to be combined for the first time in a fixed ratio, or where the ratio of ingredients in an approved combination is proposed to be changed with certain claims including indication, route of administration, dosage and dosage form; or
(iv) a modified or sustained release form of a drug or novel drug delivery system of any drug approved by the Central Licensing Authority; or
(v) a vaccine, recombinant deoxyribonucleic acid (r-DNA) derived product, living modified organism, monoclonal anti-body, cell or stem cell derived product, gene therapeutic product or xenografts, intended to be used as drug;
Explanation. The drugs, other than drugs referred to in sub-clauses (iv) and (v), shall continue to be new drugs for a period of four years from the date of their permission granted by the Central Licensing Authority and the drugs referred to in sub-clauses (iv) and (v) shall always be deemed to be new drugs."
23. Mr. Bhate, therefore, submitted that even for a novel drug delivery system or sustained release form or a modified form, the approval by the Central Licensing Authority is necessary. He submitted that it is not the case of the Petitioner that any such approval was taken by the Petitioners for the tablets Wysolone DT, which are the dispersible tablets.
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24. Mr. Bhate submitted that the ceiling prices are applicable to all forms of medicines as specified in the Schedule in the mentioned dose and dosages form irrespective of whether they are conventional or dispersible tablets. Based on the above provisions pertaining to Paragraph-32 of DPCO 2013, in cases of a new drug with product patent, the process patent, new drug involving new drug delivery system developed through indigenous Research and Development and drugs used for treating orphan diseases are given exemptions. However, the manufacturer has to seek prior approval from NPPA. The applications which are received are examined and if found eligible exemptions are granted. In the present subject matter, no such approval was sought for and no exemption was asked for by the Petitioner for their brand Wysolone DT.
25. Mr. Bhate further referred to Paragraph-15(2), which deals with fixation of retail price for a new drug for existing manufacturers of scheduled formulations wherein it is provided that where an existing manufacturer of a drug with dosages and strengths, as specified in NLEM, launches a new drug, such existing manufacturers shall apply for prior price approval of such new drug from the Government in Form-I specified under Schedule-II of DPCO, 17 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 18 : os-wp-2519-18-J-F.odt 2013. Paragraph-15(6) provides that no existing manufacturer of a scheduled formulation shall sell such a new drug at a price higher than the retail price (plus local taxes as applicable) fixed by the Government for such new drug and in case such a manufacturer is found to sell such a new drug at a price higher than the retail price (plus local taxes as applicable) fixed by the Government, such manufacturer of the new drug shall be liable to deposit the overcharged amount along with interest from the date of overcharging in addition to the penalty.
26. Mr. Bhate, therefore, submitted that the Petitioners have not taken any such approval. They were bound to follow these Rules and, therefore, the impugned demand notices are correct. They cannot be set aside.
REJOINDER OF THE PETITIONERS :
27. In response, Mr. Seervai submitted that the arguments on behalf of the Respondents is not tenable. It is not the Petitioners' case that Wysolone DT was a new drug. The question is whether it was included in the NLEM 2015. He referred to Paragraph-26 of the DPCO 2013 which mentions that no person shall sell any formulation 18 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 19 : os-wp-2519-18-J-F.odt to any consumer at a price exceeding the price specified in the current price list or price indicated on the label of the container or pack thereof, whichever is less. Mr. Seervai submitted that pursuant to the NLEM 2015 by a separate notification the price was fixed for Prednisolone but no price was fixed for Prednisolone DT 10mg which is the subject matter of the demand notices. Reasons :
28. We have considered these submissions. To appreciate the arguments advanced by both learned counsel it is necessary to refer to certain definitions under the Drugs (Price Control) Order, 2013.
They are as follows :
"2. Definitions.-- (1) In this Order, unless the context otherwise requires,-
xxxxx
(i) "formulation" means a medicine processed out of or containing one or more drugs with or without use of any pharmaceutical aids, for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease and, but shall not include-
(i) any medicine included in any bonafide
Ayurvedic (including Sidha) or Unani
(Tibb) systems of medicines;
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(ii) any medicine included in the Homoepathic
system of medicine; and
(iii) any substance to which the provisions of the Drugs and Cosmetics Act, 1940 (23 of 1940) do not apply;
xxxxx xxxxx
(t) "National List of Essential Medicines" means National List of Essential Medicines, 2011 published by the Ministry of Health and Family Welfare as updated or revised from time to time and included in the First Schedule of this order by the Government through a notification in the Official Gazette;
. It is subsequently modified in the year 2015 and 2022.
xxxxx xxxxx (zb) "scheduled formulation" means any formulation, included in the First Schedule whether referred to by generic versions or brand name;
. In the present subject matter, the generic version is Prednisolone and the brand name is Wysolone.
(zc) "Schedule" means a Schedule appended to this Order;"
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29. The core issue which is involved in this Petition, is about the interpretation of the explanation provided below the NLEM 2015. The clauses (1) and (2) in the explanation are important which are as follows "(1) Any dosage form of a medicine, other than the dosage form included in this Schedule, but in same strength and route of administration, which does not have significant difference in terms of pharmacokinetics or pharmacodynamics or efficacy-
safety profile over the dosage form mentioned in the list shall be considered as included. To elaborate, if a tablet is included, other dosage forms like conventional tablets and capsules are considered as included. However, such different dosage forms should be considered differently for purposes such as procurement policy, pricing, etc. This principle also applies to all other dosage forms e.g. oral liquid dosage forms, injectables, topical dosage forms, etc. (2) Innovation in medicine must be encouraged. The formulations developed through incremental innovation or novel drug delivery systems like lipid/liposomal formulations, sustained release/controlled release etc. should be considered as included only if specified in the list against any medicine. Such different formulations should be considered differently for purposes such as procurement policy, pricing, etc. (3) xxxxxx (4) xxxxxx (5) xxxxxx (6) xxxxxx"
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30. The arguments on behalf of the Respondent No.2 proceeded on the footing that the Petitioners were claiming their brand Wysolone DT 10 mg as a new drug and, therefore, were claiming that it would not fall within the Schedule i.e. NLEM 2015. However, we find that it was never the case of the Petitioners in this Petition or in the correspondence regarding the impugned demand notice that the Wysolone DT 10 mg was a new drug. The main contention on behalf of the Petitioner is that Wysolone DT having formulation Prednisolone was a Dispersible Tablet which was a distinct delivery system from the delivery of drugs through ordinary tablets.
31. As mentioned earlier, NLEM 2011 has four columns i.e. name of the medicine, categories, route of administration and strength. In that list, against the entry of Prednisolone, the route of administration was mentioned as 'Tablets'. In the fourth column, against the entry of Prednisolone, the strength was mentioned as 5 mg, 10 mg or 20 mg. Apart from that there was no distinction in respect of any different drug delivery system. Similarly, for NLEM 2022 there was again the column mentioning the drug delivery 22 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 23 : os-wp-2519-18-J-F.odt systems as tablet, oral liquid or injection or drops etc.. Against the entry No.3.6 corresponding to Prednisolone there was mention of Tablet 5 mg, Tablet 10 mg, Tablet 20 mg, Oral liquid 5mg/5mL (p), Oral liquid 15 mg/5 mL (p). There was a specific mention below the list that all modified release formulations of same strength such as sustained release, controlled release, extended release, prolonged release etc. are included. Therefore, this particular provision brought all the different drug delivery systems within the scope of NLEM. No distinction was made for different drug delivery system viz. Sustained release, control release etc. and, therefore, under NLEM 2022 again Wysolone DT would be covered under the NLEM and hence would be subject to price control. However, NLEM 2011 and NLEM 2022 differ from NLEM 2015.
32. The NLEM 2015 specifically describes a specific drug delivery system whether it is dispersible or sustained release etc. and in cases of such formulations there is a specific reference to specific drug delivery systems. For example, Entry at 2.1.1 regarding Acetylsalicytic acid, there is a specific reference to dispersible/enteric coated Tablet 300 mg to 500 mg.. In entry No.5.1 in the formulation Carbamazepine, there is a reference to CR tablet 200 mg and CR 23 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 24 : os-wp-2519-18-J-F.odt Tablet 400 mg., which would be Controlled Release tablet. In entry Nos.6.4.3.1.3 [Lamivudine (A)+, Nevirapine (B)+, Stavudine (C)], 6.4.3.1.5 [Stavudine (A)+, Lamivudine (B)] and 6.4.3.2.2 [Nevirapine] there is again a reference to Dispersible Tablet of that particular formulation. Entry No.12.1.3 [Diltiazem] makes a reference to SR Tablet against that particular formulation. Therefore, it is clear that whenever a specific drug delivery system other than ordinary tablet was intended to be covered under the NLEM, there is a specific reference to that particular drug delivery system. Very significantly, the entry against the formulation Prednisolone, there is a reference to the Tablet and the Oral liquid but there is no reference to Dispersible Tablet. This is very important in the context of the arguments advanced before us.
33. According to the arguments advanced on behalf of the Respondents, since Wysolone DT is in the same strength and route of administration, it is considered as included in NLEM as per the explanation (1).
34. Learned counsel for the Respondents relied on the judgment of a Single Judge Bench of the High Court of Delhi in the 24 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 25 : os-wp-2519-18-J-F.odt case of Indoco Remedies Limited v. Union of India and another3. On the other hand, Mr. Seervai submitted that Explanation (2) would be relevant to decide whether Wysolone DT is included in the list. Explanation (2) starts with the statement that 'innovation in medicine must be encouraged.' Incidentally this explanation is based on the report of the Core-Committee for Revision of the NLEM. It is the report of November, 2015. The Core-Committee had deliberated the specific issues during the revision of NLEM viz. Doses, form, strength etc. and one of the issues was incremental innovation. Explanation (2) specifically finds reference in the said report under the heading 'incremental innovation'. It is mentioned in the report that the Committee considered that such formulations including novel drug delivery systems like lipid / liposomal formulations, modified release formulations like sustained release, controlled release etc. of a medicine which are developed to overcome certain disadvantages associated with the use of conventional formulations, will be considered included only if specified in the list against any medicine.
3 2018 SCC OnLine Del 10399 25 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 26 : os-wp-2519-18-J-F.odt 35. Mr. Seervai submitted that the dispersible tablets are
developed to overcome the disadvantage faced by some patients in swallowing the tablets and, therefore, considering the deliberations recorded in the said report this explanation will have to be read in that light.
36. Explanation (2) further mentions the formulations developed through the incremental innovation or novel drug delivery system. Thus, both these are included i.e. formulations developed and the novel drug delivery system. Both these categories are to be considered as included only if specified in the list against any medicine. Therefore, the question which needs to be answered is whether the formulation Prednisolone with brand name Wysolone in the form of Dispersible Tablets can be considered as a novel drug delivery system. Explanation (2) refers to certain delivery systems like lipid/liposomal formulations, sustained release/controlled release etc. It indicates that the novel drug delivery systems mentioned in that explanation are inclusive but not exhaustive. Other drug delivery system which can be described as a novel drug delivery system can be a part of this category. The dispersible tablets are not specifically mentioned in this particular category but since 26 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 27 : os-wp-2519-18-J-F.odt the delivery systems named therein are followed by the word 'etc' there are other novel drug delivery systems which are covered by the explanation (2). In this context the stand taken by the Respondent No.3 in the demand notice dated 15.6.2018 which is at Exhibit-AI provides the answer. Paragraph-3 of this demand notice reads thus :
"3. The contentions of M/s. Pfizer Limited have been examined and they are found not tenable due to the following reasons:
(i) In this connection, attention is invited to Hon'ble Supreme Court directive in its order dated 10.03.2003 in SLP No.3668/2003 (Union of India Vs. K.S. Gopinath and others), wherein the Government has been directed to ensure that essential and lifesaving drugs should not fall outside price control. As a matter of fact, exclusion of a scheduled drug from price control merely on account of drug delivery system beyond what has been already provided under paragraph 32 of the DPCO, 2013 would result in jeopardizing the entire DPCO framework and would remove a large number of scheduled drugs from price control because they, may adopt specialized drug delivery system such as SR (sustained release), ER (extended release), CR (controlled release), DR (delayed release), DT (dispersible tablet), ET (effervescent tablet), CTB (chewable tablet), IFPD (inlay tablet), PGS (gelatin coated or polymer coated gelatin), BLM (bi-layered), ECT 27 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 28 : os-wp-2519-18-J-F.odt (enteric coated) etc. the issue of differential pricing factoring drug delivery system is a in the NLEM of a traditional version and a new version of a scheduled drug, separate policy matter which is under examination in the Government to provide for value-based differential pricing, but as of now the DPCO, 2013 does not provide for such differential pricing unless and until there is a separate mention.
(ii) Under the DPCO, 2013 ceiling price fixed for tablets are applicable to all kinds of tablets unless specifically specified. Moreover, plain or dispersible or coated or uncoated or sustained release or extended release or modified release or mouth dissolving or others come under the category of tablets only. The prices of the formulations are being fixed by NPPA either based on market data or the data provided by the company, under the provisions of DPCO, 2013.
(iii) While fixing price of the subject formulation the data relating to all types of tablets were considered including that of M/s Pfizer Limited (Wysolone 10 mg Tablets, 15) which is available on nppa website (worksheet dated 26.02.2015 (NLEM, 2011)."
37. While making reference to the specialized drug delivery systems, the Respondent No.3 has stated in their reply that the manufacturer may adopt specialized drug delivery system 'such as' 28 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 29 : os-wp-2519-18-J-F.odt SR (sustained release), ER (extended release), CR (controlled release), DR (delayed release), DT (dispersible tablet), ET (effervescent tablet), CTB (chewable tablet), IFPD (inlay tablet), PGS (gelatin coated or polymer coated gelatin), BLM (bi-layered), ECT (enteric coated) etc.. Thus, this letter itself treats dispersible tablets in equal category as controlled release and sustained release which are specifically mentioned in explanation (2). The tenor of this demand notice is that if the manufacturer uses this specialized drug delivery system it would remove a large number of products from the price control. This is the stand taken by the Respondent No.3. The explanation (2) means that the novel drug delivery system like the dispersible tablet can be considered as included only if specified in the list against that particular medicine. In NLEM 2015, the dispersible tablets are not mentioned against the name "Prednisolone". The stand taken by the NPPA (the Respondent No.3) that all tablets would cover sustained release or extended release or dispersible tablets is not in consonance with the explanation (2) which is based on the Core-Committee's report.
38. If it is the stand of the Authorities in the Demand Notice that the tablet includes - As per Clause (ii) the category tablets 29 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 30 : os-wp-2519-18-J-F.odt covers plain or dispersible or coated or uncoated or sustained release or extended release or modified release or mouth dissolving come under the category of tablets only, then there was no necessity to mention this separate category against Entry No.12.5.1 Acetylsalicylic acid where Tablet 75 mg is separately mentioned and effervescent/ Dispersible / Enteric coated Tablet 75 mg are separately mentioned. Similar entry is at 6.4.3.1.3 [Lamivudine (A) +, Nevirapine (B)+, Stavudine (C)], and 6.4.3.1.5 [Stavudine (A)+, Lamivudine (B)].
39. In entry 5.1 of Carbamazepine Tablet 400 mg and CR Tablet 400 mg are separately mentioned. Thus it is quite clear that wherever NLEM 2015 required the mention of particular drug delivery system, it was specifically mentioned. By implication the delivery system which is not mentioned will have to be considered as not included in the list.
40. Significantly, as mentioned earlier, the dispersible tablets are in fact mentioned against certain formulations in NLEM 2015. We have already mentioned such medicines. Therefore, we find substance in the submissions of Mr. Seervai that in the absence of 30 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 31 : os-wp-2519-18-J-F.odt the specific mention of dispersible tablets against the entry of Prednisolone, such dispersible tablets cannot be considered as included as they are not specified in the list against that medicine.
41. The affidavit-in-reply filed on behalf of the Respondent No.3, in paragraph-26 mentions that while fixing the price of the subject formulation, the data relating to all types of tablets in all dosages forms were considered by NPPA including Wysolone 5 mg & 10 mg and Wysolone 5 mg & 10 mg DT Tablets. It is further mentioned that the worksheet is available which shows that most of the formulations considered for that price fixation were SR/MR/DT. Since Wysolone 5mg and 10 mg dispersible tablets were specifically considered for fixing the price then the authorities should have notified the ceiling price for Prednisolone 5 mg DT and Prednisolone 10 mg DT. The price was fixed for Prednisolone 5 mg and Prednisolone 10 mg vide the notification dated 18.5.2016 and we are informed that the price for Prednisolone 20 mg was also fixed but there was no notification pointed out on behalf of the Respondent No.3 for price ceiling for Prednisolone 10 mg DT or Prednisolone 5 mg DT fixing the ceiling price. Thus, the explanation, the demand notice and the notification fixing the ceiling price together show that 31 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 32 : os-wp-2519-18-J-F.odt Prednisolone DT was not included in the list (NLEM 2015) and on the basis of the explanation (2) Prednisolone DT could not be considered as included in the list for price fixing.
42. In view of the above discussion regarding the explanation provided in NLEM 2015, it is not possible to accept the arguments on behalf of the Respondent No.3 that the Petitioner had to seek approval for Wysolone DT if the Petitioner was claiming it to be a new drug or new drug delivery system. It is not case of the Petitioner in the Petition or in the correspondence made with the Respondent No.3 that the dispersible tablets was a new drug or the new delivery system was introduced at the time of publication of NLEM 2015. Wysolone DT tablets were already available in the market and they were subjected to the ceiling price prior to NLEM 2015, under NLEM 2011 and subsequently under NLEM 2022. This is clear from the fact that while fixing the price and for issuing the notification, the Respondent No.3 had considered the data related to Wysolone DT tablets as mentioned in their affidavit. Therefore, the submissions made on behalf of the Respondent No.3 in respect of definition of 'new drug' or 'new drug delivery system', does not address the issue raised in the Petition because it was not the case of the Petitioner 32 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 33 : os-wp-2519-18-J-F.odt that it was a new drug or a new drug delivery system which was not in existence at the time of publication of NLEM 2015.
43. Mr. Seervai relied on the judgment of Modi-Mundipharma Pvt. Ltd. in support of his submissions as mentioned earlier. In this case, the scope of interpretation of explanation (1) and explanation (2) is clarified in Paragraph-36 as follows:
"36. Although the true purpose of an explanation is to explain the main proviso, the legislature is not impeded in any manner to express its intention by way of an explanation. Thus, an explanation indicating that a statute has to be read in an expansive manner would necessarily have to be given its full effect and the main statute would have to be read in an expansive manner. Similarly, an explanation may also restrict the applicability of the statute in order to express the legislative intent to do so. In the present case, on a plain reading of Section 2(v) of the DPCO-2013, a formulation of a dosage and strength which is not specified in the Schedule, is to be considered as 'non-scheduled formulation'. However, the width of this exclusion is restricted by Explanation (1) to the Schedule-I to the DPCO-2013, which provides that even though a dosage form is not mentioned in the Schedule, it would be read as included if it does not have any significant difference in terms of pharmacokinetics or pharmacodynamics or efficacy-safety profile over the dosage form as mentioned in the list. Thus, the import of Explanation (1) to the Schedule-I to the DPCO is to expand the scope of the Schedule-I to the DPCO-2013 to include 33 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 34 : os-wp-2519-18-J-F.odt formulations with dosage forms different from those listed in the Schedule. Explanation (2) restricts the sweep of Explanation (1) and clarifies that those formulations which are developed through incremental innovation or/and involve a novel drug delivery system such as Sustained release/Controlled release would not be included in the list unless specifically mentioned. Explanation (2) to the Schedule-I to the DPCO-2013 only clarifies the manner in which the Schedule-I to the DPCO-2013 is to be read."
44. In Intas Pharmaceuticals Limited, it was observed in Paragraph-30 that the contention that all versions of the formulations irrespective of the drug delivery system or innovation are included in Schedule-I of the DPCO 2013 is erroneous.
45. Indoco Remedies Limited was relied on by Mr. Bhate. In that case, in paragraph-38 there was a reference to the judgment of Modi-Mundipharma Pvt. Ltd. In paragraph-38 of Indoco Remedies Ltd. judgment, it was observed that if a medicine is mentioned in Schedule I, but the specific dosage and strength has not been specified, the same would be 'non-scheduled formulation' provided that the dosage and strength (which are not specified in Schedule I) have a material bearing on the product and it would not be considered the product as the one as specified in Schedule I. In the facts of that particular case, it was further observed in paragraph-39 34 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 ::: : 35 : os-wp-2519-18-J-F.odt that it was ex facie clear that there was no material difference in the medicine as specified in Schedule I - CETRIZINE Syrup 5 mg/ml and oral syrup 5 mg/5ml and the latter would only be a diluted version of the former.
Thus, the observations in the case of Indoco Remedies Limited were made with reference to that particular formulation. In fact paragraph-37 of the said judgment is important, which is important for consideration of the issues before us. Paragraph-37 reads thus:
"37. By virtue of Explanation 2, the formulations that were developed through incremental innovation or novel drug delivery system such as Sustained release or Controlled release were unless specified in Schedule I, expressly to be excluded from Schedule I. Plainly, medicines with such added qualities or attributes that are substantial enough to render the product itself dissimilar to the one entered in Schedule-I, cannot be assumed as covered by an entry in Schedule-I, which does not specifically indicate so. This is also the substratal rationale of clause (v) of paragraph 2(1) of DPCO-2013 as it existed prior to 09.03.2015."
. Thus, Paragraph-37, in fact, supports the contentions of Mr.Seervai.
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46. Hence, based on the above discussion, we are of the opinion that the Petitioner has made out a case for grant of relief referred to in the prayer clauses (a)(i) and (a)(iii). Hence, the show- cause notice dated 8.3.2018 (annexed at Exhibit-AC to the Petition) issued by the Respondent No.3 and the demand notice dated 20.6.2018 (annexed at Exhibit-AI to the Petition) issued by the Respondent No.3, are quashed and set aside. Rule is made absolute in aforesaid terms. The Petition is disposed of accordingly. ( SHYAM C. CHANDAK, J.) (SARANG V. KOTWAL, J.) Digitally signed by PRADIPKUMAR PRADIPKUMAR PRAKASHRAO PRAKASHRAO DESHMANE DESHMANE Date:
2025.10.07 12:32:03 +0530 Deshmane (PS) 36 of 36 ::: Uploaded on - 07/10/2025 ::: Downloaded on - 07/10/2025 22:04:09 :::