ISLAMABAD: The Supreme Court on Monday dismissed pharmaceutical companies' petitions challenging the SROs 34 and 577 of 2019. A two-judge bench, headed by Chief Justice Gulzar Ahmed, and comprising Justice Ijazul Ahsan, after hearing the arguments of the companies' lawyers turn down the pleas, and said the detail judgement would be announced later.
Martin Dow Marker (Pvt) Limited and 12 other pharma companies had challenged the SROs 34 and 577. Sattar Pirzada, representing some companies, contended that there was appellate forum in the law under that the impugned notification issued.
Justice Ijazul Ahsan said it had been provided in the said judgment. "Anybody aggrieved of the decision of DRAP may challenge the same before the appellate forum."
The bench noted that the companies had remedy before the appellate forum. If that refuses to hear them, then they could approach the courts. According to the petitions, in order to deal with hardship cases, the federal government in 2015 introduced Drug Pricing Policy (DPP).
The DRAP required that all hardship cases be dealt with in accordance with the DPP-2015. The pharma companies challenged the DPP-15 before the Sindh High Court where inter alia, it was prayed that the increase in Maximum Retail Price (MRP) in hardship, and anomaly cases should be based on the actual cost and individual basis rather than the DPP-2015.
The Supreme Court vide order dated 14th December 2018 in a human rights case, constituted a committee comprising the representatives of pharmaceutical companies, secretary Ministry of Health, official of the Drug Regulatory Authority of Pakistan (DRAP), and the attorney general of Pakistan.
The committee issued the statement that the Drug Pricing Committee of the DRAP would decide all case in accordance with the law, and on the basis of material and evidence produced before it.
The DRAP on the approval of the policy board introduced a new Drug Pricing Policy 2018 for the regulation of the pricing of drugs.
This policy brought in a revised regime of drug pricing and the Drug Pricing Policy 2015 was replaced.
The apex court on the basis of the committee report on 3rd August 2018 passed an order, which stated: "A large number of cases have been dealt with and decided by the DRAP prior to 2018 Drug Pricing Policy.
All those cases, which are covered by the erstwhile policy and have been decided, cannot be reopened. The remaining hardship cases, which are 457 regarding which objections have been filed before this Court (SC) are covered by the policy of 2018.
Based on the rule of recurring cause of action and the new cases filed in this regarding by the pharmaceutical companies shall be decided under the 2018 Policy. The existing MRP price of pharmaceutical sold in Pakistan is frozen till the decision of DRAP regarding the price fixation in hardship cases."
The petitioners continued to supply the products to its distributors at the MRPs frozen and protected by the apex court orders 3rd August 2018, and 14th November 2018.
The Ministry of Health issued SRO 1610(1)/2018 on 31st December 2018. Thereafter, the Ministry of Health and DRAP issued another SRO 34(1)2019 on 10th January 2019, wherein, it mentioned that MRPs of drugs may increase under para 12(8) of DPP-2018.
The petitioners contention was that the Ministry of Health later on issued another SRO-577(1)2019, whereby the MRP of the products were revisited and the MRP was reduced.
In order to reach the impugned MRP, the DRAP calculated the increase of the MRP, using an incorrect base MRP in their record rather than the actual, realistic and applicable MRP as on 30th December 2018, which was continuously being provided by the appellant. Resultantly, the increase in MRP of the products as portrayed by the DRAP were incorrect.
If the correct base MRP had been taken it would be clear that a small number of the products have had an increase of 75 percent, and percentage of increase would also have been less as it actually was.
Hence, based on the wrong calculations, the increase in MRP was slashed down to bring the increase down.
They contended that the impugned notification is unlawful as it is premised on calculation using an incorrect base MRP, resulting in the MRP being reduced to such a level that the production of the products unviable.
The incorrect base MRP used by the DRAP wrongly results in exhibiting an increase, which is higher than the increase actually is.
Copyright Business Recorder, 2020