Press Note

Misuse of exemption order meant for SSI units by organized sector unit

         Under the existing orders of 2nd March, 1995 (S.O.134 E), SSI units are exempt from fixation of price under para 8 of Drugs (Prices Control) Order 1995 (DPCO 1995) though they have to follow ceiling prices fixed under para 9 of the order. The exemption, however, is not available to those SSI units which do not satisfy the conditions stipulated in the order of 2nd March 1995. One of the conditions is that it should be an independent unit / company and the exemption is not available to a subsidiary of or owned or controlled in any manner by any other undertaking which is not so exempted from the provisions of the DPCO 1995. However, there is a general suspicion that many organized sector companies including MNCs are misusing the above exemption order by transferring their known brands of scheduled formulations to their directly or indirectly controlled SSI units thereby attempting to evade price control.

         One such case of suspected misuse by M/s Johnson and Johnson through one of its wholly owned / controlled subsidiary, namely, M/s N.R.Jet Enterprises Ltd. which came to the notice of National Pharmaceutical Pricing Authority (NPPA), was referred to the Director of Industries, Maharashtra. The Industries Department after verification of facts has cancelled the SSI registration granted to the unit. The Central Bureau of Investigation (CBI) is also enquiring into the misuse of these provisions.