New Delhi [India], October 27 : The Supreme Court on Tuesday questioned the Centre over the massive disparity between the maximum retail price (MRP) of medicines and their price to retailers, asking why the system appeared to favour pharmaceutical manufacturers over patients.
A bench of Justices Vikram Nath and Sandeep Mehta criticised the government’s reluctance to regulate medicine prices more extensively, observing that the National Pharmaceutical Pricing Authority (NPPA) appeared “totally defunct”. 
“Why is the entire system working to help these people (manufacturers)?” the bench asked, while hearing two petitions concerning medicine pricing.
When Additional Solicitor General Aishwarya Bhati, representing the Centre, submitted that India had among the lowest medicine prices globally, the bench responded that affordability could not be assessed without considering the country’s low per capita income.
“Don’t weigh patients against commerce,” Justice Mehta remarked, questioning why the government had taken so long to cap profit margins on cancer drugs.
The Centre maintained that it was continuously reviewing its policy and balancing competing considerations, but the bench said the government had failed to explain the wide price differences despite repeated queries.
The bench said the government’s approach was “too wayward” and questioned how a price increase from Rs 11,000 to Rs 1.3 lakh could be justified as calibration.
The bench also warned against allowing medicine pricing to “run amok”, adding that the government could not treat the issue merely as a matter of economic policy.
During the hearing, the bench cited the example of a drip line procured by retailers for Rs 15 but sold for Rs 250, questioning the purpose of the Drugs (Prices Control) Order (DPCO) if such disparities continued.
Senior advocate Mukul Rohatgi, appearing for hospitals, argued that private healthcare institutions had to maintain round-the-clock infrastructure and could not rely on patients to procure medicines from outside, citing concerns over spurious drugs and operational costs.
Rejecting the justification, the bench said hospitals could sustain themselves through other means rather than excessive medicine markups.
“You are a commercial hospital. You charge for everything. But why should medicine be quoted at 100, 200 times?” the bench asked, adding that corporate discounts offered by manufacturers remained another unexplained aspect of the pricing structure.
Hospitals could not justify steep medicine markups by citing operational costs, remarking that they could not survive through “dacoity”, the apex court observed.
The bench reserved its order in the matter.
The top court was hearing arguments on a plea seeking regulation of the initial prices of non-scheduled medicines and price caps on medical devices.
Earlier, the Supreme Court had expressed serious concern over the wide gap between the Price to Retailer (PTR) and Maximum Retail Price (MRP) of life-saving medicines, particularly cancer drugs, questioning the absence of effective price controls.
The petition contended that a large majority of medicines fall outside the scheduled category and are therefore not subject to ceiling prices, allowing manufacturers greater flexibility in fixing MRPs.
The plea sought mandatory generic prescriptions, regulation of the initial prices of non-scheduled medicines and price caps on medical devices.
Petitioner Kishan Chand Jain submitted that around 82 per cent of medicines fall outside the scheduled category under the Drug Price Control Order (DPCO), 2013, and manufacturers are not subject to upfront price fixation for such drugs.