ORDER : Anand Byrareddy, J. 1. Heard the learned Counsel for the petitioners and the learned Counsel for the respondents. It is the case of the petitioners that they are commonly aggrieved and therefore, have filed a joint petition. The first petitioner is a Society registered under the Karnataka Societies Registration Act, 1960. The main object of the Society inter alia is to address the welfare and interest of the patients suffering from kidney ailments. Petitioners 2 to 5 are persons who are suffering from kidney ailments and they are employed with private companies and could avail of the insurance benefits under the Employees' State Insurance Act, 1948 (hereinafter referred to as the 'ESI Act', for brevity). The Act envisages provision for medical benefits, sickness benefits, maternity benefits and disablement benefits etc. The said legislation provides for medical treatment and medical attendance to the injured and their families. The Employees State Insurance Scheme (ESIS) is run based on the contributions made by the employers and the employees and the State Government and it is basically a statutory responsibility of the State Government. Each of the petitioners namely, petitioners 2 to 5 suffer from renal failure and they had initially obtained treatment at dispensaries and hospitals established under the ESI Act. It transpires that the said dispensaries and hospitals did not have the requisite facilities to deal with the complicated problem that the petitioners suffered and they were referred to other hospitals, which was of no avail. Hence, they were ultimately referred to specialist doctors in Nephrology at private hospitals and each of the petitioners underwent operation for kidney transplantation, after obtaining necessary permission from the authorities: Sl. No. Date of Operation Hospital’s Name 1. 11-3-1992 Yellamma Dasappa Hospital 2. 17-5-1989/18-10-1996 M.S. Ramaiah Institute of Nephro Urology, Karnataka Nephrology and Transplant Institute 3. 20-10-1990/2-12-1998 M.S. Ramaiah Institute of Nephro Urology, Karnataka Nephrology and Transplant Institute 4. 27-12-1995 St. John’s Medical College Hospital Petitioners 3 and 4 have undergone kidney transplantation twice as they had rejection symptoms of the grafted kidney. The specialists, who had conducted the operations constantly reviewed the functioning of the organs, which are transplanted of petitioners 2 to 5. The medical expenditure incurred by the petitioners from inception and for further treatment, is reimbursed by the Employees State Insurance Corporation (ESIC). The specialists, who had conducted the operations constantly reviewed the functioning of the organs, which are transplanted of petitioners 2 to 5. The medical expenditure incurred by the petitioners from inception and for further treatment, is reimbursed by the Employees State Insurance Corporation (ESIC). The petitioners are on immunosuppressant life saving drugs like Cyclosporine, Azathioprine, Prednisolone, Mycophenalate, Basiliximab etc., which were required to be taken every day, in order to avoid the risk of transplanted kidney being rejected and that it also requires special medication to be administered to maintain it in a healthy and functioning state. It is stated that the petitioners, in their post operative care, are particularly prescribed Sandimmun Neoral or Cyclosporine, introduced by M/s. Novartis (International) Limited. It contains immunosuppressant drug and is widely used all over the World and is also approved by the Food and Drug Administration (FDA) of the United States of America and the said drug is commonly prescribed by Nephrologists, since it is a time-tested medicine and that no generic Cyclosporine drug other than the original product Sandimmune Neoral is safe in the case of transplant of kidney and this is accepted worldwide. The petitioners claim that they have been consistently prescribed the said drug and till November 2001, the ESIC was reimbursing the cost of the said drug. There was attempt earlier to prescribe some other generic drug in the place of Sandimmun Neoral and this was a unilateral decision not based on any expert opinion and this had a disastrous consequence. In that, one K.N. Mahadev from Dharwad, who was on Sandimmun Neoral since 1993 and was positively responding to the same, was supplied with a substitute generic drug by the Corporation and his system had rejected the said drug and there was reaction caused. He was immediately advised to switch back to Sandimmun Neoral. This is a matter of record as recorded by a Specialist at M.S. Ramaiah Hospital. It is such timely advise, which prevented the misfortune. Yet another instance was that of Sri K. Balachander Ural-petitioner 3, who had undergone transplantation in the year 1989 and he was advised to switch on to another generic Cyclosporine drug, which resulted in the rejection of his first transplant, forcing him to undergo second kidney transplant. It is in this background that the ESIC again started supplying the very drug namely, Sandimmun Neoral or Cyclosporine. It is in this background that the ESIC again started supplying the very drug namely, Sandimmun Neoral or Cyclosporine. However, it is the grievance of the petitioners that notwithstanding such a consistent opinion of the experts as regards the risk of experiment with any generic drug, the ESIC insists that the petitioners, who were covered under the Scheme must switch over to a generic Cyclosporine medicine, which is far cheaper than Sandimmun Neoral. The drug Sandimmun Neoral costs Rs. 2,900/- per 50 tablets of 50 mg whereas generic Cyclosporine tablets, which the ESIC not supplies, costs Rs. 2,400/- per 50 tablets of 50 mg. It is in this situation that the petitioners are before this Court seeking that there be a direction to the respondents to continue the supply of Sandimmun Neoral manufactured by M/s. Novartis (International) Limited, as against any other generic drug, which would pose a danger to their life in the circumstances aforesaid. 2. Respondent 3 has entered appearance and has filed statement of objections to the effect that one of the various generic drugs manufactured and sold by respondent 3 under its brand name is 'Imusporin'. The said formulation is manufactured at its factory located at Kurkumbh, Poona and that the said facilities conform to Goods Manufacturing Practices (GMP), as recommended by the World Health Organisation (WHO). The said manufacturing facility is inspected by the Food and Drugs Administration Headquarter, Maharashtra State, which is the authorised certifying authority of the WHO. The product 'Imusporin' manufactured by respondent 3, in the strengths of 100 mg, 50 mg and 25 mg capsules, at the said factory conform to the GMP, as recommended by the WHO. The said facilities and operations have also been approved by the United Kingdom Medicines Control Agency (UKMCA); Therapeutic Goods Administration, Australia (TGA) and Medicine Control Council, South Africa (MCC) and that the same is used universally in solid organ transplantation and in prevention and treatment of allograft rejection. The consumption of the said drug is growing from year to year and prestigious institutions all over the country are said to be utilising the said drug. The consumption of the said drug is growing from year to year and prestigious institutions all over the country are said to be utilising the said drug. The third respondent denies that a generic drug can also have any adverse effect as claimed by the petitioner and that Sections 8 and 16 of the Drugs and Cosmetics Act, 1940, categorically recognise the official pharmacopoeia of a foreign country and 'Imusporin' manufactured by the respondent meet the standards prescribed by law and therefore cannot be said to be deficient in any manner. That the claim of the petitioners is a unilateral and self-serving claim, which is not supported by any scientific data and therefore, the said respondent seeks to refute the claim of the petitioners. It is the further claim that bio-equivalence of a drug means that a manufacturer's generic product is bio-equivalent to the pioneer drug product. For the said purpose, the manufacturer submits the data for such comparison. Bio-equivalency testing involves comparison of measures of bio-availability of the generic and innovator formulations. Bio-availability is characterized by the rate and extent to which the active drug ingredient or therapeutic ingredient is absorbed from a drug product and becomes available at the site of drug action. Bio-equivalent drug products are pharmaceutically equivalent and display comparable bio-availability when studied under similar experimental conditions. Pharmaceutical equivalents contain the same active ingredient and are administered in the same dosage form by the same route of administration and are of identical strength or concentration. It is contended that the goods supplied by respondent 2 is, in fact, generic Cyclosporine and therefore once it is admitted that the goods supplied is in fact generic Cyclosporine, it is to be considered as being bio-equivalent to the product 'Sandimmun Neoral' and as the goods meet the standards of the US Pharmacopoeia, the allegations are baseless and are misconceived. The respondent has also annexed Certificates of Satisfaction issued by various Nephrologists from across the country. It is further contended that the entire case of the petitioners is based on a likely adverse reaction, which is a mere apprehension and not based on any scientific evidence. And hence the respondent denies the petitioners' claim to be supplied only Sandimmun Neoral. 3. By way of rejoinder, the petitioners have asserted that Sandimmun Neoral is only a brand name for the generic drug Cyclosporine. And hence the respondent denies the petitioners' claim to be supplied only Sandimmun Neoral. 3. By way of rejoinder, the petitioners have asserted that Sandimmun Neoral is only a brand name for the generic drug Cyclosporine. It is a time-tested drug and originally researched product of M/s. Novartis (International) Limited. But Imusporin, which the respondent now wants to supply is a locally made drug without any scientific analysis. The petitioners point out that it is the life of the petitioners which is at risk in being called upon to consume the generic drug as a substitute, which the petitioners are not prepared to accept. The assertion that there is no medical evidence or scientific proof of any danger involved, is sought to be refuted by producing the opinion expressed by several Specialists. 4. The State has also filed its statement of objections to contend that the ESI rate contract for the purchase of drugs under the ESI Schemes all over the country is prepared under the expert guidance consisting of Medical Officers of ESIC, Directors of ESIS (Medical) Schemes of the States and the Drug Controller of India and others and that these experts consider the probabilities and consequences of each drug before selecting and then approving them to include in the ESI Rate Contract. And that tenders were thus invited by the ESIC in respect of the various drugs under their generic names. It is asserted that Cyclosporine drug of various strength including capsules, injections etc. have been allotted to various firms in the category of first cheapest, second cheapest and third cheapest. M/s. Novartis (International) Limited, whom the petitioners are advocating, had not offered competitive rates and as a result, the offer was not accepted by the ESIC. The drug, which is being supplied at present to kidney patients by the ESI Corporation, is Cyclosporine, which is of the same strength having the same effect and the drug is manufactured and supplied by M/s. Cipla India Limited under a rate contract. It is asserted that there are 59 kidney patients, who have been given Cyclosprine drug from December 2001, which is manufactured and supplied by M/s. Cipla Limited. In respect of those patients, no complaint has been received except the present petitioners, who have approached this Court. It is asserted that the petitioners could not claim that there would be any adverse reaction or side effects. In respect of those patients, no complaint has been received except the present petitioners, who have approached this Court. It is asserted that the petitioners could not claim that there would be any adverse reaction or side effects. From the enumeration of the above, it is asserted that the petitioners have no legal right in seeking supply of a particular drug manufactured by a company of their choice. 5. The State Government has not furnished any technical material to assert that the use of generic drug as against the common prescription by several Nephrologists across the country would not cause adverse effect. On the other hand, the petitioners have now produced additional documents, such as the opinion expressed by a Nephrologist from M/s. M.S. Ramaiah Institute of Nephrology, wherein it has been pointed out as follows: "Conventional formulation of Cyclosporine have been used for many decades, but shows large variation in drug levels. To reduce this variability in drug levels in blood microemulsion formulation Sandimmun Neoral has been developed by Novartis and marketed in India. Cyclosporine falls under the category of critical dose drugs and has the following characteristics: (a) Cyclosporine is a narrow therapeutic index drug which means that great care needs to be taken to guarantee that the patient is exposed to the appropriate amount of the drug to ensure that there is no long term damage to the graft either to under immunosuppression or over immunosuppression which is linked to absorption of the drug (which to a greater extent is dependant on the formulation). (b) Cyclosporine demonstrates Pharmco Kinetic variability in the same patients and between patients. (c) Cyclosporine exhibits limited or erratic absorption in inter or intra patients. (d) Cyclosporine demonstrates formulation dependent bioavailability. (e) Cyclosporine requires blood level monitoring to avoid under or over exposure of the drugs. (f) Underdosing or overdosing of Cyclosporine can have life threatening consequences for the patient along with economic implication of treating rejection, hospital stay, and may be a return to the dialysis machine resulting in a poor quality of life for the patient. In the present scenario with shortage of organs and increased cost for second transplant with the usage of monoclonal antibodies which are expensive. Usage of innovator product would be most appropriate as it is well documented in transplanted patients. In the present scenario with shortage of organs and increased cost for second transplant with the usage of monoclonal antibodies which are expensive. Usage of innovator product would be most appropriate as it is well documented in transplanted patients. The Government could save on the above mentioned cost benefit for the patient." I personally do not have any experience with usage of Generic Cyclosporine including Cipla - Immusporin mentioned in your letter. Different Generic formulation of Cyclosporine in the Indian market it has been seen that AUC/Dose ratio does not remain constant. International studies confirm that before generic forms of immunosuppressive drugs are introduced into clinical practice, they must be evaluated not only in healthy volunteers, but also in transplant recipient population. Recent data appeared in the internet on collaborative transplants study, which is supported by 300 transplant centers in 45 countries. The CTS is the largest International voluntary study in the field of medicine - more than 2 lakh data sets for kidney and other organs. This health of data has provided invaluable insights it to transplantation and related problems. This paper concludes: "The patient for whom treatment with generic Cyclosporine was definitely confirmed show a significantly lower graft success rates than patient receiving the Cyclosporine Neoral formulation. Increased attention caution with the use of generic Cyclosporine would therefore seem appropriate. In conclusion, I am of the opinion that till such time enough published data on transplanted recipient are produced by companies manufacturing generic Cyclosporine, I strongly recommend only Sandimmun Neoral to all the transplanted recipient (new and old) in our institutions as there is enough documentation over a period of 20 years." 6. Similarly, a Nephrologist from All India Institute of Medical Sciences (AIIMS) has expressed thus: "Patients who have had renal transplantation need to be on immunosuppressive drugs life long. They require those medicines to prevent rejection of the renal transplant. Patients who have been transplanted by us at the AIIMS are on Sandimmun Neoral. This is of international quality and is used all over the World with excellent results. I have never used the brand Imusporin and would be extremely apprehensive to use a brand that has not stood the test of time in my precious patients." 7. Patients who have been transplanted by us at the AIIMS are on Sandimmun Neoral. This is of international quality and is used all over the World with excellent results. I have never used the brand Imusporin and would be extremely apprehensive to use a brand that has not stood the test of time in my precious patients." 7. A Professor of Nephrology, Institute of Nephro Urology has also expressed that renal transplant recipients who were initiated on Neoral formulation of Cyclosporine may be continued on Neoral itself. And has also expressed that an Expert Committee appointed by the Central Government Health Scheme in August 2004 had opined that the treating Nephrologist was the person to choose the particular brand of Cyclosporine-A and that it was not advisable to change the brand of Cyclosporine-A in a patient who was already using one particular brand and was stable on that. Therefore, it is asserted that there are no concluded findings as to the efficacy and advise of using a substitute generic drug in the place of a drug, which the respondent recipient has been recommended over the several years. Any change in such drug would expose the patient to the risk of rejection of the transplanted kidney. It is this apprehension with which the petitioners are before this Court. 8. In the result, this Court is called upon to consider whether the respondents ought to be directed to settle or reimburse the cost of the drug, namely Sandimmun Neoral prescribed by the Specialist and the said drug alone and not any other drug. 9. Having regard to the high risk which the petitioners undergo in being required to be administered the said drug on continuous basis, the petitioners are justified in claiming that they should be continued to be supplied the very drug Sandimmun Neoral, in the absence of any contra material furnished by the respondents in support of their claim that the substitute generic drug could be administered without any adverse effects and in the face of the further circumstance that the above named Sandimmun Neoral being a time-tested drug without any adverse effect and the same being prescribed even as on date by the experts. The learned Counsel for the petitioners, even at this, stage would point out that the very Medical Practitioners of the ESI Hospital, even to this day, prescribe the very drug - Sandimmun Neoral and therefore, it would stand to reason that the petitioners ought to be continued to be reimbursed the cost of the said drug. The petitioners having been denied the benefit of reimbursement in respect of the difference in costs, which ought to be reimbursed to the petitioners. The difference in cost has been borne by the petitioners themselves since a long time. The petitioners would be entitled to reimbursement of the difference in costs, on production of necessary material in this regard, which the respondents shall consider and reimburse the same to the petitioners with expedition. In any event, the petitioners are at liberty to produce such material within one week from today and the respondents shall process the same and shall reimburse the difference claimed by the petitioner, if found in order, within four weeks thereafter.