Delhi High Court granted U.S. drugmaker Pfizer an interim injunction on a ban on its popular cough syrup Corex, days after the government ordered it to be prohibited citing a potential risk to humans.
India's health ministry banned the combination of chlorpheniramine maleate and codeine syrup, which Pfizer sells as the cough syrup Corex, in a notice over the weekend.
Pfizer's Indian subsidiary appealed the ban through a writ petition in the New Delhi High Court, which granted the company a stay on Monday, pending the next court hearing, Pfizer said in a statement.
Pfizer's Indian business said earlier on Monday it had stopped selling Corex, and expected its profit to be hit, as the brand generated sales of about $26 million in the nine months through December. Pfizer shares closed down 9 percent in Mumbai, before the stay order was issued.
The court said the government had not issued Pfizer a "show cause notice" before banning the medicine, two lawyers for the drugmaker told Reuters, declining to be named.
The next hearing by on Pfizer's plea is slated for March 21.
The ban also applied to Abbott Laboratories' Phensedyl cough syrup and Abbott's Indian subsidiary also filed a writ petition at the same court, which will come up for hearing on Tuesday, local television channels said.
Sanjay Jain, a lawyer representing the health ministry, wasn't immediately available to comment.
Abbott's Phensedyl commands around a third of India's cough syrup market and makes up over 3 percent of the company's $1 billion in revenue in India. The shares of Abbott's Indian arm fell about 3 percent after it said it would comply with the ban.
Abbott declined to comment on its case.
As the cough syrup contains the narcotic codeine, India has been privately pressuring manufacturers to better police supply chains to tackle smuggling and addiction, Reuters reported last year.
Akun Sabharwal, drugs controller for the southern state of Telangana which last year detected an "illegal diversion" of Phensedyl worth about $8.5 million, said he believed the ban would end the syrup's abuse.
The medicine was among 344 fixed-dose combination drugs India banned, saying a panel of experts found the drugs lacked "therapeutic justification".
Market researcher AIOCD AWACS estimated it could cut sales in the local pharmaceutical industry by up to $522 million, with Pfizer and Abbott among the worst hit.
The sale of fixed dose combination medicines in India requires the approval of the central government. But several drug combinations have entered the market over the years based solely on approval from individual states.
India has made intermittent efforts to shut this avenue, but success has been limited. In 2007 it ordered states to recall about 300 such combination drugs, but drugmakers challenged it in court and the order was stayed. (reut.rs/1J9azFo)
In 2014, India set up a panel of experts to review over 6,000 such drug combinations, and asked companies to submit data to prove safety and efficacy of their drugs. 344 of those have been banned.
OPPI, a lobby group for multinational drugmakers, criticised the move, saying codeine-based combinations under the ban have the approval of India's drug controller, and companies were never made aware that these were being reviewed. Pfizer's India unit also said its Corex had the central government's approval.
Drug Controller General G.N. Singh was not immediately available to comment.
The Indian Pharmaceutical Alliance, which represents Indian drugmakers, said the review process was not transparent.
Health ministry official K.L. Sharma told Reuters he disagreed, saying, "we are not prepared to tolerate anything that will (adversely) affect patients."
(Additional reporting by Suchitra Mohanty)
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Updated Date: Mar 15, 2016 00:15 AM