The Supreme Court on Tuesday questioned the Centre over the wide disparity between the price to retailer (PTR) and Maximum Retail Price (MRP) of cancer drugs and other medicines, asking why there should not be a uniform rule capping the MRP at 16% above the PTR.
A Bench of Justices Vikram Nath and Sandeep Mehta were hearing petitions concerning regulation of medicine prices, generic prescriptions and pricing controls for medical devices under the Drugs (Prices Control) Order (DPCO), 2013.
Justice Mehta highlighted the disparity by referring to a cancer drug carrying an MRP of around Rs 27,000 despite being available to retailers for approximately Rs 3,000. The Court had previously raised concerns over similar instances of substantial gaps between PTR and MRP.
The Bench also questioned the distinction between essential and non-essential medicines under the DPCO. It raised concerns over instances where corporate hospitals require patients to purchase medicines from in-house pharmacies, with the resulting higher costs ultimately being borne by taxpayers when treatment is covered under government schemes such as Ayushman Bharat.
The Bench questioned whether essential medicines should be left outside the DPCO when all drugs and medical devices fall under the Essential Commodities Act, asking why a uniform 16% markup cap could not be applied.
Solicitor General Tushar Mehta, appearing for the Centre, acknowledged the concerns and submitted that a balance would have to be found. He stated that he was not suggesting that the petitioners were wrong, but that a solution balancing the competing interests would be necessary.
The petitions, including those filed by Advocate Kishan Chand Jain and others, challenge aspects of the existing drug-pricing regime. The petitioners have highlighted the distinction between scheduled and non-scheduled medicines, arguing that non-scheduled formulations constitute a substantial portion of the market and are not subject to the same ceiling-price mechanism.
According to the petitioners, the existing framework allows manufacturers greater freedom in fixing the initial MRP of non-scheduled formulations, subject to applicable restrictions on subsequent price increases. They contend that this can result in substantial markups and impose a significant financial burden on patients.
The Court has posted the matter for further hearing on October 12.
The Bench had also expressed strong concern over such pricing disparities during an earlier hearing, when it questioned how a cancer drug available to retailers for around Rs 2,700 could carry an MRP of Rs 27,000 and raised concerns over the impact of such price differences on patients and public health schemes.
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