Court Supports Regulatory Authority's Power to Prevent Misleading Advertisements in Pharmaceutical Industry
In a significant judgment, the Kerala High Court has upheld a circular issued by the Office of the Drugs Controller aimed at regulating the advertisement of discounts in the pharmaceutical sector. The judgment, delivered by Justice Bechu Kurian Thomas, addresses the contentious issue of whether the Drugs Controller can impose conditions on drug license applicants to prevent misleading advertisement practices.
The case involved three writ petitions centered around the validity of a circular dated September 4, 2024. The petitioners, including M/s. Pharmadude Pharmacy and others, contested the circular's stipulation that drug license applicants must include an undertaking in their affidavit, stating they will not display misleading discount boards. While two petitions sought to quash the circular, another petition supported its implementation.
The petitioners argued that offering discounts below the Maximum Retail Price (MRP) serves the public interest and aids affordability. They contended that the circular infringed upon their right to conduct business by restricting advertisement of these discounts. Conversely, the respondent, the Drugs Controller, emphasized that the circular targets misleading advertisements that exploit consumers by projecting exorbitant discounts.
In its judgment, the court highlighted the regulatory authority's incidental powers to ensure legal compliance and protect consumers. Justice Thomas affirmed that the circular aligns with public interest and does not violate the right to conduct business. He stressed that regulatory bodies have the flexibility to issue directives in public interest, provided they do not severely infringe rights or lack apparent public benefit.
The court further noted that while selling drugs below the MRP is permissible, misleading advertisements can be regulated to ensure transparency. Upholding the circular, the court dismissed the petitions challenging it and allowed the implementation petition, thereby enabling the Drugs Controller to take appropriate action against non-compliance.
This judgment underscores the judiciary's support for regulatory measures aimed at consumer protection and transparency in the pharmaceutical industry.
Bottom line:-
Regulatory authority's power to impose conditions in drug licensing aimed at avoiding misleading advertisements upheld.
Statutory provision(s): Drugs and Cosmetics Act, 1940; Drugs Price Control Order, 2013; Constitution of India, Article 226
M/s. Pharmadude Pharmacy Vannappuram v. State of Kerala, (Kerala) : Law Finder Doc id # 2928127
