- The Supreme Court questioned wide price gaps between retailer cost and patient prices of medicines
- A cancer drug costs Rs 3,000 to retailers but has an MRP of Rs 27,000 on packs
- Court asked why a uniform 16% margin cannot be applied across all medicines
The Supreme Court on Tuesday took fresh aim at the wide gulf between what retailers pay for medicines and the prices ultimately charged to patients, questioning the Centre over the lack of a uniform framework to rein in such markups, particularly on cancer drugs.
A Bench of Justices Vikram Nath and Sandeep Mehta cited the example of a cancer medicine available to retailers for around Rs 3,000 but carrying an MRP of Rs 27,000.
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The bench, comprising Justices Vikram Nath and Sandeep Mehta, pointed to a cancer drug whose price to retailers was about Rs 3,000, while the maximum retail price (MRP) printed on the pack was Rs 27,000.
The Court questioned why such a wide disparity should be permitted and asked whether a uniform 16% margin could be applied across medicines.
The Bench also turned its attention to corporate hospitals, observing that patients are often required to purchase medicines from in-house pharmacies at prices linked to inflated MRPs.
It questioned the practice of hospitals refusing to assure treatment if patients procure medicines from outside pharmacies.
The Court further flagged the implications for taxpayers when patients undergoing treatment under government-sponsored health schemes are charged inflated prices and the expenditure is subsequently reimbursed from public funds.
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“In corporate hospitals... Rs 27,000 MRP. PTR is around Rs 3,000. Just see the difference,” the Bench observed, questioning why there should not be uniform criteria for medicine pricing.
Solicitor General Tushar Mehta, appearing for the Centre, acknowledged the need to find a solution while maintaining that a balance would have to be struck between competing interests. He said he would consult government officials and respond to the Court.
The Bench also questioned the distinction between scheduled and non-scheduled medicines under the existing price-control framework and asked why a 16% margin could not be considered across pharmaceutical products.
The Court said excessive price differences could also undermine consumer confidence.
It pointed out that even if a chemist offered a medicine carrying an MRP of Rs 27,000 for Rs 3,000, patients could suspect that the cheaper medicine was counterfeit because of the unusually high printed price.
The Centre's counsel also submitted that pharmaceutical manufacturers may not be the primary beneficiaries of the large price differential, with private hospitals potentially absorbing a substantial part of the margins.
The observations came in a petition filed by Kishan Chand Jain seeking mandatory generic prescriptions, regulation of initial prices of non-scheduled medicines and price caps on medical devices. The case is also examining gaps in the existing drug-price control framework.
The Supreme Court had last week described the 10-fold PTR-MRP gap in a cancer drug as “broad daylight dacoity” and “absolute rampage and carnage” involving patients.
The Court has granted the Centre additional time for inter-departmental consultations and listed the matter for further hearing on October 12.
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