The Supreme Court questioned the government over medicine overpricing after the Centre capped trade margins on 137 anti-cancer drugs at 30%. The bench said, “Policy seems to benefit corporates even as the public suffers.” Judges noted that patients lack bargaining power and urged the government to control more drug prices.
The Centre informed the court about its decision to cap trade margins on 137 anti-cancer drugs at 30% of the MRP, expected to save patients around ₹2,500 crore annually. The court, however, pointed out that the decision came only after its intervention.
“What stops you from taking control over the entire medicines. What is the rationale behind leaving some medicines outside the scheduled drugs category that puts it outside the Drug Price Control Order (DPCO)?” the bench said.
“The price of drugs when seen globally are the cheapest in India. The government does not leave the sector unregulated. At the same time, complete control cannot be the solution,” she said.
The bench said patients had no bargaining power and were forced to bear the burden of high prices. It cited an instance in which a medicine distributor offered to procure an anti-cancer drug directly from the manufacturer for ₹1,100 for his wife’s treatment, but a private hospital charged him ₹1.30 lakh.
“Policy seems to benefit corporates even as the public suffers. We can give you 100 other examples of drugs and devices which are heavily priced. You can simply bring them under the trade margin of 16%,” it said.
The court also criticised the Centre’s affidavit for not addressing three parliamentary committee reports on drug pricing. “Your affidavit is silent on them (reports) because it is not very convenient to you,” it said.
ASG Bhati informed the court that the government has ensured to make generic drugs available to people through the PM Jan Aushadi Kendras and that the government calibrates prices of non-scheduled drugs.
The pleas were by lawyer Kishan Chand Jain and doctor Sanjay Kulshreshtha. One of them noted that the annual turnover of Pradhan Mantri Bhartiya Janaushadhi Kendras was ₹2,200 crore, around 1% of the industry’s annual turnover.
Senior advocate Mukul Rohatgi appearing for a body of private hospitals said the private health sector became relevant as the state was not found to be up to the mark. He said that if the court feels that the margin of money is pocketed by hospitals, a panel can be formed to seek the truth.
Drugs are regulated as an essential commodity under Section 3 of the Essential Commodities Act, 1955 and the Drugs (Prices Control) Order, 2013 (DPCO) is issued by the Centre in exercise of the powers conferred under this provision.