MUMBAI, July 13: The Mumbai high court has stayed a central government notification on the fixation of prices of ciprofloxacin formulations. It has asked the government officials concerned why action should not be initiated against them for contempt of court -- apparently for violating an earlier stay on price fixation.

The court was acting on a petition filed by Indian drug giant Ranbaxy, which had sought a stay on recent government notifications fixing the prices of ciprofloxacin formulations.

Ranbaxy had also requested the court not to take any penal action against it for violating the said government notifications and had, on the contrary, sought appropriate action against ministry officials for its actions.

Ciprofloxacin is a new generation drug and the largest selling quinolone in India. It is reported to be more effective against a broad spectrum of indications like typhoid and severe systemic infections than penicillin and other antibiotics.

Industry sources said that government notifications issued on June 10 and 25 this year had fixed the prices of ciprofloxacin formulations (viz 250 mg packs of four, six and 10 tabs; and 500 mg packs of four and 10).

This is alleged to have violated an earlier court order which restrained the government from fixing the prices of ciprofloxacin formulations.

Sources said that the notified uniform price on some ciprofloxacin fomulations was about 25-30 per cent below prevailing prices. Key ciprofloxacin formulations include Ranbaxy's Cifran, Cipla's Ciplox and Dr Reddy Laboratories' Ciprolet.

The high court's move is expected to transalate into major gains for all the leading ciprofloxacin formulators.

Analysts say that if the government's notification had been given effect to, it would have resulted in a 29 per cent reduction in Cifran prices, a 25 per cent reduction in Ciplox and a nine per cent drop in Ciprolet prices. Currently, Cifran 250 mg costs about Rs 50.43 for a pack of 10 while Ciplox costs Rs 44 for the same pack.

Cifran and Ciplox account for about 11 per cent of Ranbaxy's and Cipla's domestic turnover while Ciprolet accounts for close to nine per cent of Dr Reddy's domestic sales, analysts added. Sources said that Ranbaxy had first moved the Mumbai High Court court in mid-1996 over the inclusion of ciprofloxacin in the Drugs (Prices Control) Order.

On July 5, 1996, the court had restrained the government from fixing the price of ciprofloxacin formulations."But the June 1997 notifications of the government failed to consider this," sources pointed out. In fact, Ranbaxy had written to the concerned officials indicating that the notification was in violation of the court order but in vain.

Though the notified price of ciprofloxacin formulations had yet to be effected by the industry, several analysts had downgraded the earnings forecasts of all three major formulators based on the government notification.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.