In a relief to pharma majors, the Delhi high court on Friday held as "illegal and unsustainable" the Centre's decision to put a ceiling on the price of condoms, including the luxury variety.
A bench of Chief Justice G Rohini and Justice Rajiv Sahai Endlaw set aside the National Pharmaceutical Pricing Authority’s orders capping prices of male contraceptive devices, saying it exceeded the powers conferred upon it under the Drug Price Control Order of 2013.
"We are of the view that the NPPA exceeded the powers conferred by DPCO-2013 while fixing the ceiling price for condoms. The language of para 4 (of DPCO 2013) is unambiguous and makes clear the legislative intent that the ceiling price can be fixed only for scheduled formulations of specified strengths and dosages as specified under the First Schedule.
"Therefore, according to us, the provisions of para 4 cannot be made applicable to condoms, the dosage and strength of which have admittedly not been specified under the first schedule," it said.
"Consequently, fixation of the ceiling price for condoms under DPCO-2013 is impermissible under law. Accordingly, we declare that the orders of the NPPA dated November 5, 2013, and July 10, 2014, are illegal and unsustainable. In the result, both the said orders are hereby set aside," the court said.
It was also of the view that inclusion of condoms in DPCO 2013 was not ultra vires of the provisions of the Essential Commodities Act, saying it was a "medicine as well as a substance for use of human beings for mitigation or prevention of a disease or disorder" as provided under the Drugs and Cosmetics Act, 1940.
It said, therefore, that condoms are drugs as per the Drugs and Cosmetics Act, and "are also essential commodities".
Pharma companies Reckitt Benckiser and J K Ansell Ltd in their pleas challenged the two NPPA orders and contended that condoms were not drugs, but were rather devices and thus, cannot be included in DPCO 2013.
The NPPA by its November 5, 2013 order had initially capped condom prices at Rs 6.56 per unit and this was later increased to Rs 8.04 by its July 10, 2014, notification.
The court in its 67-page judgement observed that condoms were drugs, saying "whether contraceptives are in the form of devices or in the form of tablets, all of them are treated as medicines since the purpose of all forms of contraceptives is reproductive and fertility regulation and safe motherhood."
"It may also be added that so far as the condoms are concerned, indisputably the same are being used not only as contraceptives but they are also widely in use all over the world for protection against transmission of HIV -- the virus that causes AIDS -- as well as several other Sexually Transmitted Infections.
“Therefore, condoms have been rightly considered as Essential Medicines and are included in the National List of Essential Medicines so as to ensure affordable health care to a majority of population and also to improve accessibility of drugs for anti-HIV etc., through special assistance scheme for subsidising the prices especially for Below Poverty Line and Above Poverty Line families," the bench said.
The court rejected the argument of the pharma majors that condoms were devices and not drugs saying, "we do not find any logic to draw any such distinction."
The government while opposing the plea of the pharma companies had said if luxury condoms were removed from the DPCO, then the manufacturers would flood the market with their expensive varieties and make their lesser-priced contraceptives scarce.
In their petition, the two pharma firms had claimed that their products are luxury products "meant for pleasure" and had sought clarification on whether the current ceiling would apply only to utility condoms and whether the NPPA was proposing to fix a separate cap on "pleasure condoms".
The court did not go into this issue. The government had also maintained that since condoms were currently in the national list of essential medicines, there could be no gradations like luxury and ordinary, where drugs are concerned.