Cipla Limited vs. National Pharmaceuticals Pricing Authority Case: Re-Labelling of Pre-Ceiling Price Stock Not Mandatory Under DPCO 2013

Cipla Limited vs. National Pharmaceuticals Pricing Authority Case: Re-Labelling of Pre-Ceiling Price Stock Not Mandatory Under DPCO 2013

In the case of CIPLA LIMITED V. NATIONAL PHARMACEUTICAL PRICING AUTHORITY & ANR. W.P.(C) 208/2026, the Delhi HC vide order dated 19.01.2026 passed an important ruling concerning drug price control and compliance under the Drugs (Prices Control) Order, 2013 (DPCO 2013). The Delhi High Court has set aside multiple Demand Notices issued by the National Pharmaceutical Pricing Authority (NPPA) against Cipla Limited.

The judgment clarifies the scope of Paragraph 24 of DPCO 2013, particularly in relation to pre-manufactured stocks of scheduled formulations and the obligation of pharmaceutical manufacturers after issuance of ceiling price notifications.

Background of the Case

Cipla Limited, a pharmaceutical manufacturer, challenged various Demand Notices issued by NPPA alleging overcharging of scheduled formulations.

NPPA claimed that certain drug batches were sold at prices higher than the notified ceiling price, even after such prices were brought into force through Gazette notifications. Cipla contended that:

• The concerned batches were manufactured prior to the ceiling price notifications
• Revised price lists along with Form V had been duly issued
• There is no obligation under Paragraph 24 of DPCO 2013 to re-label or recall pre-manufactured stocks
   

Issues Before the Court

The principal questions considered by the Court included:

• Whether issuance of Form V and revised price lists is sufficient compliance for pre-manufactured stock under DPCO 2013
• Whether the Demand Notices were issued without adequate evidence of actual overcharging

Findings of the Delhi High Court

The Court observed that:

• Paragraph 24 of DPCO 2013 does not impose any obligation beyond issuance of Form V and revised price lists once revised MRP is notified
• The impugned Demand Notices failed to disclose material particulars, such as proof of actual sale at higher MRP
• Reliance on assumptions without evidentiary support renders such administrative action arbitrary
   

The Delhi High Court:

• Set aside the impugned Demand Notices
• Permitted NPPA to reconsider the matter afresh, after examining all material on record
   

Key Takeaways for the Pharmaceutical Industry

• Form V compliance is sufficient for pre-manufactured stock under DPCO 2013
• Re-labelling of old stock is not mandatory
• NPPA must base recovery actions on clear evidence of overcharging
   

Why This Judgment Matters

This ruling provides significant clarity to pharmaceutical manufacturers dealing with inventory manufactured prior to ceiling price notifications. It reinforces legal certainty under DPCO 2013 and limits arbitrary recovery actions by pricing authorities.

Click here to access the full Judgment

Note:
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