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NPPA not to interfere in complaints with commercial interests regarding authorised dealership

Gireesh Babu, New Delhi
Thursday, November 25, 2021, 08:00 Hrs  [IST]

The National Pharmaceutical Pricing Authority (NPPA) has said that it may not interfere in the commercial aspects related to manufacturers denying dealerships to interested parties or individuals, but will take action under the Drugs (Price Control) Order, 2013, if public interest is adversely affected.

In an office memorandum to the manufacturers and all stakeholders, NPPA has said that a number of complaints are received in the office from persons or firms who intend to become dealers of a particular manufacturer and the manufacturer refuses to appoint them as authorised dealer.

Similarly, complaints were received regarding the manufacturer refusing to sell drugs directly to a person or firm and redirecting him to the authorised dealer. In such cases, the complainant requests NPPA to invoke paragraph 28 of DPCO, 2013.

According to the paragraph 28 of DPCO, 2013, issued under Section 3 of Essential Commodities Act, 1955, no manufacturer or distributor shall withhold from sale or refuse to sell to a dealer any drug without good and sufficient reasons; and no dealer shall withhold from sale or refuse to sell any drug available with him to a customer intending to purchase such drug. This is subject to the provisions of the Drugs and Cosmetics Act, 1940 (23 of 1940) and the rules made there under, it added.

The prevailing supply chain model is that the manufacturers supply drugs to the market through their authorised distributors, who then supply drugs to other dealers including retail dealers.

It is in this context the drug pricing authority clarified that it may not interfere in such complaints considering that they may involve commercial interests.

“It may be noted that the demand to procure drugs directly from the manufacturer or the demand to be appointed as authorised dealer arise from the commercial interests of the complainant. This office has, time and again, clarified that commercial issues/terms/disputes etc., between the dealer and the concerned company or its distributor/stockist are not within the purview of or resolved by NPPA,” said the office memorandum.

However, the manufacturers may note that they shall give utmost importance to public interest in all such cases and ensure proper distribution of drugs and ensure sufficient availability in the market.

In case any aspect of public interest is adversely affected in such cases, NPPA is duty bound to invoke Paragraph 28 and take appropriate action, including passing orders under Paragraph 3 of DPCO, 2013, and hold prosecution under Section 7 of the Essential Commodities Act, 1955, it added.

 

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