Cong Govt’s hunt for bulk medicine supplier : HC indicates secrutiny

Shimla, Oct 29

Himachal Pradesh High Court has restrained the state government from awarding contracts under a fresh tender for procuring 1,403 types of medicines, after a pharmaceutical supplier challenged the eligibility criteria requiring bidders to have a minimum average annual turnover of Rs 500 crore.

The petition filed by M/s Marc Laboratories Ltd. has brought the state’s bulk medicine procurement policy under judicial scrutiny, raising questions about competition between local pharmaceutical suppliers and large companies from outside Himachal Pradesh.

A Division Bench comprising Chief Justice G.S. Sandhawalia and Justice Bipin C. Negi, while hearing CWP No. 19133 of 2026 on October 26, directed the state government not to award any contract under the disputed tender until further orders.

Considering the sensitivity of medicine supplies to government hospitals, the Bench observed that the state could continue purchasing medicines from earlier bidders in the meantime.

The court order dated October 26, 2026, does not restrain the supply of medicines. It specifically restricts the award of contracts under the disputed tender.

According to paragraphs 6 and 7 of the order in M/s Marc Laboratories Ltd. v. State of H.P. and another, CWP No. 19133 of 2026, HC directed that the state should not award any contract pursuant to the disputed bids and considering the sensitivity of medicine procurement for hospitals, it also observed that the state could continue buying the medicines from earlier bidders until further orders.

The petitioner contended that the fresh tender covering 1,403 types of medicines and drugs imposed a financial eligibility threshold that would prevent smaller pharmaceutical firms from competing for government business.

The company stated that its average annual turnover during the preceding three years was Rs 189.89 crore, considerably below the prescribed Rs 500-crore requirement.

Marc Laboratories submitted that it had previously supplied 19 types of medicines under the state’s approved list of medicines and drugs.

It alleged that the revised conditions would put Himachal-based pharmaceutical companies at a disadvantage against large suppliers capable of meeting the stringent turnover requirement.

The firm also questioned the sharp increase in the financial eligibility threshold compared with earlier tenders.

According to the petition, a tender floated in February-March 2026 prescribed a minimum average annual turnover of Rs 20 crore, while the October 2024 tender required Himachal-based bidders to have a turnover of Rs 10 crore.

It is worthwhile to mention here that legal dispute has placed the structure of government medicine procurement in focus, particularly the implications of inviting bids for a large basket of 1,403 medicines under a single tender with a high financial eligibility threshold.

“Such conditions could determine whether smaller suppliers remain eligible to participate or whether government business is concentrated among a limited number of large pharmaceutical companies.” a medicine whole seller told Himachal Scape.

The petitioner alleged that the revised criteria would restrict its ability to compete with bulk suppliers from outside the state. The court has not yet ruled on the allegation or the validity of the amended procurement conditions.

Although the immediate dispute concerns tender eligibility rather than any established shortage of medicines or increase in prices for patients, the outcome could have implications for the organisation of the state’s medicine supply chain.

Competition among qualified suppliers, continuity of supplies to hospitals and the rationale for financial eligibility requirements remain important aspects of the procurement policy under challenge.

The High Court’s interim order allows the state to continue purchasing medicines from earlier bidders while preventing it from finalising contracts under the disputed tender. The court issued notice in the matter and listed it for further hearing on November 30.

The validity of the revised procurement conditions and the allegations raised by the pharmaceutical firm remain to be decided.