The Supreme Court has questioned the Centre over substantial differences between the prices at which retailers procure medicines and their maximum retail prices (MRP), expressing concern that patients are being forced to pay excessive amounts while pharmaceutical manufacturers benefit from the existing pricing system.
A Bench of Justices Vikram Nath and Sandeep Mehta also expressed dissatisfaction with the functioning of the National Pharmaceutical Pricing Authority (NPPA), describing the regulatory body as ineffective in controlling drug prices.
The observations came on Tuesday during the hearing of two petitions concerning affordable medicines, regulation of pharmaceutical pricing and the prescription of generic drugs. The Court reserved its verdict after hearing the submissions.
Supreme Court Questions Pricing Disparities
The Bench highlighted instances of substantial markups in medicine prices, including a drug purchased by retailers for Rs 15 but sold with an MRP of Rs 250.
Questioning the Centre’s oversight, the judges asked how such differences could be justified and why manufacturers were being permitted to operate without adequate restrictions.
The Court also referred to price differences of 300 to 400 per cent or more and sought an explanation for where the additional amount went and how such margins could be defended.
According to the Bench, patients have little bargaining power when purchasing medicines, making them particularly vulnerable to excessive pricing.
The judges also cited an instance involving the wife of a medical distributor who was undergoing cancer treatment. An injection available to the distributor for Rs 11,000 had reportedly been charged to her at Rs 1.30 lakh.
Centre Defends India’s Drug Pricing System
Additional Solicitor General Aishwarya Bhati, representing the Centre, submitted that medicines in India were priced among the lowest in the world.
She attributed this to competition in the domestic pharmaceutical market, where numerous companies operate across different categories of medicines.
Bhati also emphasised the need for a calibrated regulatory framework rather than an approach that disregarded broader economic considerations.
The Bench, however, questioned whether commercial interests and the growth of the pharmaceutical industry could be placed alongside the needs of patients.
It emphasised that patients’ lives should not be evaluated through a purely commercial perspective and expressed its preference for medicines to be treated as generic drugs.
Court Criticises NPPA’s Functioning
The judges raised concerns over the effectiveness of the NPPA, questioning whether the authority had adequately fulfilled its responsibility to protect consumers from excessive drug prices.
The Bench described the regulator as practically defunct and expressed concern that the existing framework appeared to operate in favour of pharmaceutical manufacturers.
It also questioned whether the public could realistically expect meaningful relief from the authority under the prevailing system.
The NPPA was constituted as an independent regulatory authority responsible for monitoring pharmaceutical prices and ensuring the availability of medicines at affordable rates.
Questions Over 30% Cap on Cancer Drug Margins
The hearing also examined the Centre’s decision to restrict trade margins on anti-cancer medicines to 30 per cent of their MRP.
While the government maintained that the measure would provide financial relief to patients, the Bench questioned why similar controls had not been extended to other medicines.
The judges specifically asked why a uniform trade margin of 16 per cent could not be introduced across all categories of drugs.
The Court also questioned the delay in implementing pricing restrictions, observing that the government had taken steps only after the judiciary began raising concerns.
During an earlier hearing on October 12, the Bench had expressed dissatisfaction with the government’s response concerning cancer medicine pricing.
On that occasion, it had referred to a saline drip costing Rs 11 but being sold for Rs 270.
The Centre had informed the Court that restricting trade margins on anti-cancer medicines to 30 per cent could generate annual savings of approximately Rs 2,500 crore for patients.
Petitions Seek Price Controls and Generic Prescriptions
The two petitions before the Supreme Court raise separate but related concerns about access to affordable medicines.
One petition seeks stricter enforcement of the Drugs (Prices Control) Order, 2013, to prevent alleged unethical overpricing of essential medicines. It also calls for measures to restrict disproportionate profits within the pharmaceutical supply chain.
The second petition seeks disciplinary action against medical practitioners who fail to prescribe generic medicines to their patients.
Following the hearing, the Supreme Court reserved its verdict on both petitions.
