Jan Aushadhi Store Selection Criteria Upheld by Delhi High Court

The existing Jan Aushadhi Store at the hospital has a high sales volume

May 14, 2024

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Last Updated on May 21, 2024 by The Health Master

Jan Aushadhi

The Delhi High Court recently issued a verdict in favor of the Central government’s criteria for selecting a Jan Aushadhi Store operator at Safdarjung Hospital, Delhi.

This decision upholds the government’s authority to set eligibility requirements aimed at ensuring quality service and efficient operation of the pharmacy.

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Challenged Eligibility Criteria

Medifirm Pharmacy LLP, a pharmaceutical firm, had filed a petition challenging the selection criteria outlined in the government’s auction notice dated April 25, 2024.

The company argued that two specific conditions were unfair and restrictive:

Minimum Experience:

Bidders needed a minimum of six years’ experience in the pharmaceutical business and one year of experience operating a Pradhan Mantri Bhartiya Janaushadhi Kendra (PMBJK) in the recent past.

Medifirm contended that the PMBJK experience requirement limited competition by creating a monopoly for a select group.

Turnover Weightage:

The technical evaluation criteria awarded higher marks to bidders with a turnover exceeding Rs. 20 crore.

Medifirm argued that such a high turnover threshold was unnecessary for a Jan Aushadhi Store and unfairly favored larger companies over smaller players.

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Government’s Rationale

The Central government and Safdarjung Hospital defended the criteria, emphasizing:

High Sales Volume:

The existing Jan Aushadhi Store at the hospital has a high sales volume.

They argued that a higher turnover threshold ensures the chosen operator has the financial capacity to maintain adequate inventory and handle such volumes.

Quality of Service:

Prior PMBJK experience signifies expertise in managing similar pharmacies and guarantees a higher standard of service for the large number of patients at Safdarjung Hospital.

Court’s Ruling

The High Court dismissed Medifirm’s petition, citing several key points:

Tendering Authority’s Freedom:

The Supreme Court has established the tendering authority’s right to set eligibility criteria. Bidders cannot challenge conditions simply because they are inconvenient.

Large Network of Jan Aushadhi Stores:

With over 10,000 Jan Aushadhi stores across India, the pool of potential bidders is not limited.

Expertise for High-Footfall Hospital:

Safdarjung Hospital experiences significant patient traffic.

Experience operating a similar Store ensures the chosen operator possesses the necessary management skills to handle such a demanding environment.

Financial Strength for High Turnover:

A higher turnover threshold is reasonable, as it implies a stronger financial position to manage a high-volume pharmacy.

Prioritizing Efficiency for Patient Benefit:

The Court prioritizes the government’s right to select a bidder who can efficiently manage the Store and provide quality service to a large number of patients.

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