Massive gap in medicine prices: Supreme Court asks central government sharp questions

Regarding the massive gap between the maximum retail price (MRP) of medicines and the prices received by retailers, the Supreme Court has reprimanded the central government in strong words. A bench of Justice Vikram Nath and Justice Sandeep Mehta asked why it seems that the entire system is helping medicine manufacturers? The court called the National Pharmaceutical Pricing Authority (NPPA) inactive for not controlling medicine prices. The court questioned that if all this is happening right under the government's nose, should it be allowed to run wild like this?

According to a Dainik Bhaskar report, after hearing on this issue, the Supreme Court has reserved its verdict. The court noted that the production cost of many medicines is only ₹10-20, which retailers get for ₹30, but their MRP is printed as ₹150-200. This huge gap feels concerning to the court. Medicines constitute a large share of the total expenditure incurred on hospitalization in India. 19% of the total treatment cost in rural areas and 15% in urban areas is spent behind medicines, meaning an average of 17% of the total cost is spent on medicines.

Expressing heavy displeasure over the prices of cancer medicines too, according to a TV9 Gujarati report, the court gave a shocking example and said that a chemotherapy injection whose original price is ₹11,000 is sold by private hospitals anywhere from ₹1.10 lakh to ₹1.30 lakh. Earlier during the hearing on 29 September, the court raised questions about a cancer medicine of ₹2,700 having an MRP of ₹27,000, calling it akin to 'genocide'. The court asked the Centre that this is daylight robbery; is the government for the people?

Appearing for the central government, Additional Solicitor General (ASG) Aishwarya Bhati stated that according to government policy, the entire ecosystem cannot be controlled. She argued that medicine prices in India are the lowest in the world and the government needs to maintain a balance between the cheap availability of medicines and the commercial interests of the pharma industry. However, commenting on these arguments, the court said that these variations are arbitrary because they have failed to bridge the massive price gap ranging from ₹11,000 to ₹1,30,000.

Regarding the 'trade margin' of cancer medicines, the Centre stated that they have taken an important decision to cap the trade margin of anti-cancer medicines up to 30% of the MRP. According to the Centre, this decision is expected to save patients approximately ₹2,500 crore annually. However, in the hearing on 12 October, the Supreme Court had said that this reply of the Centre is not satisfactory and questioned why the government has not imposed limits on the trade margins of other medicines.

The Supreme Court has noted that 90% of medicines are outside the purview of the 'Drug Price Control Order' (DPCO). Under the DPCO, the government fixes the maximum price of medicines included in the 'National List of Essential Medicines' (NLEM), but the government's direct control over medicines not in this list is low. The court further stated that the government provides expenses up to ₹5 lakh under schemes like 'Ayushman Bharat', but due to this blind profiteering of medicines, the financial burden falls on the common patient and their family. It was also noted that the recovery of ₹8,000 crore from pharma companies is still pending. The court has ordered all parties to file written submissions in two weeks.