SC Questions Massive Markups: Demands Wider Drug Price Regulation
The Supreme Court demands a broader look at drug price regulation, questioning massive markups on medicines and medical devices.
The Supreme Court of India has called for a comprehensive examination of drug pricing across the country, questioning the logic behind limiting price regulations to specific life-saving drugs. During a hearing on Monday, the apex court expressed sharp concern over the massive disparity between the procurement prices of medicines and their Maximum Retail Price (MRP), describing certain instances of extreme markups as "broad daylight dacoity with the patients."
Focus on Cancer Drugs vs. Entire Market
The bench, comprising Justices Vikram Nath and Sandeep Mehta, was reviewing the Centre’s proposal to impose a 30 per cent cap on trade margins for specific cancer medicines. While the Union government, represented by Solicitor General Tushar Mehta, stated that a list of cancer drugs would be notified and periodically updated, the court questioned why such scrutiny is not extended to the broader pharmaceutical market.
“This relates to only cancer drugs. What about the overall?” the bench asked, urging the government to look beyond a narrow scope to protect patients from excessive costs across the entire medical ecosystem.
Shocking Disparities in Medical Devices and Medicines
The court highlighted several startling examples where the gap between the Price to Retailer (PTR) and the MRP was astronomical. These examples illustrate the massive margins being enjoyed by intermediaries and manufacturers:
- Saline Drip Lines: A drip line with an MRP of ₹11 is being sold for ₹270.
- Cardiac Stents: An Indian-made stent with a PTR of ₹5,000 carries an MRP of ₹25,000.
- Azithromycin: The court cited a case where the PTR was ₹2,850 for a medicine with an MRP of ₹78.29.
- Life-saving Drugs: The bench noted instances where drugs purchased for approximately ₹2,700 were sold at an MRP of ₹27,000.
The Balance Between Affordability and Availability
Additional Solicitor General Aishwarya Bhati, representing the Centre, argued that drug price regulation must strike a delicate balance between affordability and market availability. She cautioned that excessive government intervention could disrupt market dynamics and potentially affect the supply of medicines, stating, “We don’t want to control the entire ecosystem of drugs.”
However, the bench challenged this stance, asking why the government cannot regulate the entire range of drugs to ensure patient protection. The court expressed concern that high margins might even influence medical interventions, suggesting that doctors might sometimes recommend certain procedures because the profit margins are so high.
The Legal Challenge: Non-Scheduled Medicines
The hearing is part of a plea seeking mandatory regulation of the initial prices of non-scheduled medicines and price caps on medical devices. The petitioner, Kishan Chand Jain, pointed out a significant loophole: approximately 82 per cent of medicines fall outside the "scheduled" category under the Drug Price Control Order (DPCO). This allows manufacturers significant flexibility in fixing MRPs without the oversight of ceiling prices.
The plea further seeks the implementation of mandatory generic prescriptions to help lower healthcare costs for the public.
The Supreme Court has posted the matter for further hearing on October 27.