NEW DELHI, 24 DEC: Pfizer India Ltd has taken the drug price regulator to court for reducing the price of a popular cough syrup, Benadryl, a brand it no longer owns. The Indian arm of the $68-billion US company has challenged the National Pharmaceutical Pricing Authority's (NPPA) price notification and penalty notice alleging overcharging, a company spokeswoman said. Benadryl, sold by Pfizer to Johnson and Johnson in 2008, has annual sales of Rs 14 crore, according to pharma market research firm IMS Health India.
The brand logged sales of Rs 30 crore in 2007. The NPPA had slashed prices of Benadryl 100 ml to Rs 38.61 four years ago citing "public interest" after its study found that Pfizer had increased the maximum retail price of the medicine by more than the then permissible 20% limit in 12 months. This margin is currently 10%. The Mumbai High Court, which is hearing the case, has scheduled the next hearing on January 17. Benadryl does not fall under the list of drugs whose prices are directly fixed by the government.
But under India's drug price monitoring laws, NPPA can force companies to slash their profit margins if they increase more than the 20% (then) in 12 months to ensure that prices of drugs don't go unchecked.
Pfizer had filed a review petition contesting the price watchdog's order with the department of pharmaceuticals (DoP), which in turn upheld NPPA's order. Last month, NPPA levied a penalty of Rs 6-7-crore on the American company for overcharging consumers.
According to Indian laws, companies have to follow the revised price during the pendency of the settlement of the dispute. The Pfizer spokeswoman declined to say which firm would bear the financial liability, but a person close to the development said Pfizer would be accountable for the charges.
NPPA has a dismal track record of recovery of overcharged amount, having received just Rs 217 crore of the total demand of Rs 2,357 crore at the end of October 2011 as most of its notices have been challenged and are under litigation. Pfizer share ended at Rs 1,109, up 0.91% on the BSE on Thursday.
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