Financial Daily from THE HINDU group of publications
Sunday, Mar 24, 2002
Regulatory Bodies & Rulings
Ranbaxy absolved of price manipulation
NEW DELHI, March 23
THE Monopolies & Restrictive Trade Practices Commission (MRTPC) has absolved Ranbaxy Laboratories Ltd of the charges of manipulating prices of its products.
While disposing of the application filed by the Director General (Investigation & Registration) (DGI&R)), the commission recalled that the preliminary investigation was conducted on the basis of a suo motu study undertaken by Director (Research), alleging Ranbaxy of charging exorbitant prices on its products.
As per the allegations, the company was charging the maximum allowable post-manufacturing expenses (MAPE) of around 353 per cent on its product `Calmpose Suspension', which is used as a sedative drug for certain elements of children.
By doing so, the company was manipulating the price to the detriment of consumers, which was unjustified and unreasonable, it was alleged.
The company, in its reply to the notice of enquiry (NoE), submitted that the NoE was in relation to `Calmpose Suspension' 60 ml, which is a formulation.
In respect of various formulations, as per the Drugs (Price Control) Order, 1987 (DPCO), the company is required to submit the break-up of the retail price in Form 2-A as prescribed thereunder, which was duly done by the company. Further, in the said break-up, the company had also set out the particulars regarding the MAPE.
Since the allegation was in relation to MAPE, it would be necessary to refer to the provisions of DPCO, under which MAPE was prescribed, the company said.
The Department of Chemicals & Petrochemicals, in its submission, said "it is quite evident from the details submitted by the company under DPCO that the post-manufacturing expenses was on the higher side.
"However, taking into consideration the comparatively low sales of suspension pack vis-a-vis sales of other packs of formulation, the insignificant market share of the product in the relevant therapeutic group and the low contribution of the product to the overall profitability of the company, during the relevant period, no compelling reason appeared so as to warrant Government intervention in the price of `Calmpose Suspension' under DPCO in public interest.''
"In view of the facts submitted and a satisfactory reply filed on behalf of Ranbaxy, we do not find any ground to continue with the present proceeding and the same has been disposed of. The NoE is accordingly discharged,'' the commission said.
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