MOOT PROBLEM 2

SwasthNagrik
Versus
Union of India

India is the largest democracy in the world. The Constitution of India declares
India as a
sovereign socialist secular democratic republic. In a democracy, the State owes
certain responsibilities towards all her citizens. All these responsibilities are
enshrined in the Part IV of the Indian Constitution under the title Directive
Principles of State Policy. One of such responsibilities is to raise the level of
nutrition and the standard of living and improve public health. 'India Speaks', is
a popular newspaper which is in maximum circulation in India. The newspaper
conducted a survey to find out the death rate in India. The survey reports are as
follows: “Around 80% of the Indian population on economic front belongs to
middle and lower classes. In India, every year 8 persons die out of every 100.
Out of these 8 persons, 5 die due to lack of accessibility to proper medicines and
all these 5 persons belong to middle and lower classes of society. In India, rising
prices of medicines is making survival a struggle.” Based on this survey, several
news channels conducted talk shows, interviews with prominent personalities
and public opinion through online voting. Several NGO’s and people conducted
protests pressurizing the State to take necessary steps to protect and preserve the
life people. Looking into this vast spread agitation, the Indian Parliament
decided to make drugs as Essential Commodities by enacting the
Essential Commodities (Vital Drugs ) Act, 2012. The Act came into force from
16th January 2012. The object of this Act is to make vital drugs available to the
public at reasonably affordable price. However, the Parliament delegated the
power to the Central Government to decide what drugs are vital. In exercise of
this delegated legislation, the Central Government provided that the vital drugs
will be divided into two types: 1. Vital Drugs of Basic Type and 2. Vital drugs
of Special Type. The former includes drugs for all diseases other than those
coming under Special Type and the latter includes drugs for AIDS, Cancer of all
kinds, brain hemorrhage, hepatitis, H1N1, brain tumor, tuberculosis affecting
spine, brain and skin and diseases affecting heart, brain and kidney. The Central
Government further provided that vital drugs of Basic Type shall be produced
50% by Generic medicine producers and 50% shall be imported from abroad.
The generic and imported medicines shall be available at a reasonably
affordable price in Government Hospitals. However, the imported medicines
will be available at their market price and generic medicines at reasonably
affordable prices in Private Hospitals. However, drugs for sexually transmitted
diseases shall not be available at reasonably affordable price neither in
Government Hospitals nor in Private Hospitals. Further, the Central
Government defined the term reasonably affordable price as a price which is
half the market price of the medicine. There are several drug producing Indian
Industries in which several Multi National Companies have invested. The
Central Government provided that the medicines produced by such industries
would be available at their market price in Government as well as Private
Hospitals. The drugs coming under the second category viz. Vital Drugs of
Special Type are usually those medicines which are imported from foreign
countries. The Central Government provided that the medicines coming under
this category would be available at market price and not at reasonably
affordable price. After the Annual Budget of 2012-13, prices of all essential
commodities went high and so also that of the medicines. The Government
treasury showed a great financial setback during the year as most of the money
was utilized in producing of generic medicines and making imported drugs
available to public at reasonably affordable prices by subsidizing. Further, in
August 2012, H1N1 outbreak occurred in India. Many of the people diagnosed
with H1N1 were from middle and lower classes of society. But as the medicines
came under “Vital Drugs Special Types”, they were available at market price
and were beyond the reach of public due to which several persons belonging to
these classes died. Ramesh, an industrial worker is suffering from syphilis. As
the generic medicines were produced for the same, he claimed these medicines
at a reasonably affordable price. But the government hospital refused to provide
him such drugs at reasonably affordable price, as syphilis is a sexually
transmitted disease. Ramesh approached SwasthNagrik, a registered NGO
which has worked in the field of public health and welfare, particularly to those
belonging to lower strata, with his issue. SwasthNagrik came across several
persons who were suffering from venereal diseases to whom medicines were not
available at reasonably affordable price and most of these people belonged to
the lower strata of society. SwasthNagrik made a representation to the Central
Government to provide subsidies for vital drugs of special type or to make
production of the same under the generic medicine and to make available drugs
for sexually transmitted diseases at reasonably affordable price. The government
did not reply to any of those representations in spite of constant reminders by
the NGO. Looking to this indifferent attitude of the Central Government
towards the deaths caused by H1N1, venereal and like diseases, SwasthNagrik
filed a Writ Petition before the Supreme Court challenging the Constitutional
validity of the delegated legislation. The Government in its reply has challenged
the maintainability of the Writ Petition.
Points for consideration before the Hon'ble Supreme Court of India are:
1) Whether the Parent Act as well as the Delegated legislation are violative of
Constitution?
2) Whether the Delegated legislation is violative of the Parent Act?
3) Whether the impugned legislation is violative of International Trade Laws?
The Hon'ble Supreme Court has posted the case for hearing of both the parties.
(Note: The participants are permitted to raise additional issues)
ANNEXURE
The Essential Commodities (Vital Drugs) Act, 2012 An Act to provide vital life
saving drugs to the people at reasonably affordable price in order to preserve
their health and life.
Section 1: (1) This Act may be called The Essential Commodities (Vital Drugs )
Act, 2012.
(2) This Act extends to whole of India.
(3) This Act will come into force from 16th January 2012.
Section 2: Definitions:
(a) 'Vital Drugs' includes all drugs which are necessary to preserve health and
life of human beings.
(b) 'Diseases' includes all diseases which affect human health and life.
(c) 'Government Hospital' includes all hospitals owned and managed by the
State and which receive State funding, whether wholly or partially.
(d) 'Private Hospital' means a hospital which is not a government hospital.
(e) 'Generic Medicines' includes drug product that is comparable to brand listed
drug product in dosage form, strength, root of quality and performance
characteristics and its intended use and is a drug marketed under chemical name
without advertising and is a drug subject to government regulation or; medicine
sold under generic name only after patent has expired or if no patent issued to
the substance.
(f) 'Private Producer' includes all producers other than generic producers.
(g) 'Foreign Producer’ means producers manufacturing drugs outside the
territory of India.
(h) 'Licence' for the provisions of this Act, the term licence means a licence
granted to a foreign producer under section 19. Section 5: (1) For the provisions
of this Act, only the Central Government has power to classify drugs as vital or
non-vital and make rules for availability of these vital drugs at reasonably
affordable price.
Explanation- For the purpose of this section 'reasonably affordable price' means
a price to be fixed by the Central Government taking into consideration the
earning capacity of the lower economic strata of the society.(2) In deciding vital
drugs and diseases, the Central Government shall take into consideration the
public interest.
Section 14: Any Multi-National Company willing to invest in any industry
producing vital drugs in India will have to pay fees prescribed by the Central
Government in this regard.

Section 19: (1) Any foreign producer of vital drugs special type, who is willing
to export drugs into India, will have to acquire a licence from the Central
Government for the same and in granting of which, the Central Government can
exercise full discretion.

(2) The exporter who has been permitted by the Central Government to export
drugs into India under sub-section (1) of this section will have to pay such fees
to the Central Government as it may prescribe in this regard.
Section 24: The provisions of TRIPS Agreement and International Trade Laws
will be taken into consideration while giving effect to the provisions of this Act.
Section 25: Notwithstanding anything contained in any other law for time being
in force in India, governing essential commodities, the provisions of this Act
will be given effect thereto.
(Disclaimer: This problem is a hypothetical problem and is not reflection of or
dealing with any person, situation, organization or any case that has appeared in
India and is framed purely for academic purpose.)
Allotted to:
16049- 16057
16060- 16061
16066- 16669
16075- 16077
16094- 16096