Delhi HC scraps ceiling on condom prices

Delhi HC scraps ceiling on condom prices

A Delhi High Court Bench comprising Chief Justice G. Rohini and Justice R.S. Endlaw today set aside cap on condom prices, saying that the Government’s decision to include it in the Drug Price Control Order (DPCO) was “illegal and unsustainable”.

The Court set aside the orders of the National Pharmaceutical Pricing Authority dated November 4, 2013 and July 10, 2014, according to which the ceiling on condom prices was fixed at Rs 6.56.

The Petition was filed by two pharma firms, Reckitt Benckiser and JK Ansell Ltd (JKAL), which had contended that their products were 'devices' and not 'medicines' and thus would not fall under the DPCO and hence, no cap can be put on the prices.

The question to be considered by the Court was whether fixation of ceiling price under the provisions of the Drugs (Prices Control) Order, 2013 for condoms is in conformity with the powers vested under the Essential Commodities Act, 1955 read with the Drugs and Cosmetics Act, 1940.

The Petitioners had claimed that their products are luxury products "meant for pleasure" and sought clarification on whether the current ceiling would apply to only utility condoms and whether NPPA was proposing to fix a separate cap on "pleasure condoms".

They had further contended that the low ceiling price would discourage bigger companies from production, which in turn poses negative effects on population control measures.

The Government, on the other hand, had contended that since condoms help to curb diseases, they would fall under the definition of ‘medicines’.

It had further contended that 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.

"They may even make their lower priced brands/products scarce or in poor packaging which may not inspire confidence in the consumers," Additional Solicitor General (ASG) Sanjay Jain had said during his earlier arguments before the court.

The government 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.

 The Court ruled that condoms are drugs within the definition of Section 3(b) of the Drugs and Cosmetics Act, 1940 as well as Item 1 of Schedule to EC Act, 1955 and thus the same are also the “essential commodities” within the meaning of Section 2A of the EC Act, 1955.

However, the Court ruled that the issuance of a Control Order for price fixation of condoms was not permissible under law as the NPPA exceeded the powers conferred by Drugs (Prices Control) Order, 2013 while fixing the ceiling price for condoms.

Read the Judgment here.