The Supreme Court has raised serious concerns over substantial differences between the purchase prices and maximum retail prices (MRPs) of medicines, questioning the Centre’s efforts to regulate pharmaceutical pricing and protect patients from excessive charges.
A bench comprising Justices Vikram Nath and Sandeep Mehta, while hearing two petitions concerning drug pricing on Tuesday, criticised the functioning of the National Pharmaceutical Pricing Authority (NPPA) and questioned whether the existing regulatory framework was effectively controlling profit margins.
Court Raises Concerns Over Affordability of Medicines
During the hearing, Additional Solicitor General Aishwarya Bhati, representing the Centre, submitted that medicine prices in India were among the lowest globally.
The bench, however, observed that international price comparisons must also consider India’s per capita income and the financial capacity of patients to afford medical treatment.
Justice Mehta cautioned against prioritising commercial interests over patients and questioned the delay in introducing restrictions on profit margins for cancer medicines.
The Centre informed the court that its pricing policies were being reviewed regularly to balance the interests of different stakeholders. The judges expressed dissatisfaction with the explanation, particularly regarding the significant differences between procurement costs and retail prices.
Wide Gap Between Purchase Price and MRP Questioned
Highlighting pricing disparities, the bench referred to an example of a drip line purchased by retailers for Rs 15 and sold to patients for Rs 250.
The court questioned how such markups could persist under the Drugs (Prices Control) Order (DPCO) and sought clarity on the effectiveness of existing pricing regulations.
The judges also questioned a price revision from Rs 11,000 to Rs 1.3 lakh, expressing concern over the justification offered for such substantial changes.
Hospitals Cannot Justify Excessive Charges Through Operating Costs
Senior advocate Mukul Rohatgi, representing hospitals, argued that private healthcare facilities incur significant expenses in maintaining round-the-clock services and ensuring the availability of medicines.
He also highlighted concerns regarding counterfeit medicines and the practical difficulties associated with allowing patients to purchase drugs from external suppliers.
The bench, however, maintained that operational expenses could not justify disproportionately high charges for medicines.
The judges observed that commercial hospitals already charge patients for various services and should explore other means of covering operational costs rather than relying on excessive medicine markups.
The court also questioned corporate discounts offered by pharmaceutical manufacturers and the lack of clarity surrounding their impact on medicine pricing.
Expressing strong disapproval of excessive charges, the bench remarked that hospitals could not sustain their operations through “dacoity”.
Supreme Court Reserves Order
The hearing brought renewed attention to pharmaceutical pricing practices, hospital medicine charges and the role of regulatory authorities in ensuring affordable healthcare.
After hearing submissions from the Centre and representatives of hospitals, the Supreme Court reserved its order in the matter.
