'It's loot': SC questions 1,000% mark-up on cancer drugs
What's the story
The Supreme Court has slammed the government and its regulatory mechanisms for allowing massive markups on medicines, questioning how a hospital could charge a ₹1.3 lakh for a cancer injection, which is available to a medical distributor for just ₹11,000. Justices Vikram Nath and Sandeep Mehta questioned why such pricing disparities exist and if the system favors pharmaceutical manufacturers at patients' expense.
Case
Where does the money go, the court asked
The court said hospitals must find other means to sustain their operations, not through "loot and dacoity," and shared an incident involving a drug dealer whose wife was undergoing cancer treatment.
"The dealer requested the hospital authorities, 'Sir, I am myself a dealer and to me the injection comes at ₹11,000 dealer price'. The hospital refused to administer that injection and charged ₹1,30,000 for that injection. Can you show any justif tion for this loot, please?" it asked the government.
Argument
'₹11,000 to ₹1,30,000 is no calibration'
When Additional Solicitor General (ASG) Aishwarya Bhati submitted that the government has been "constantly calibrating" pricing policies, the bench shot back, "Your calibration is too wayward."
"₹11,000 to ₹1,30,000 is no calibration...When you talk of patients and life, should we have such capitalistic thinking?"
The bench was hearing a PIL filed by advocate Kishan Chand Jain seeking mandatory generic drug prescriptions, strict price controls on non-scheduled medicines, and statutory margin caps on medical devices under Drug Price Control Order (DPCO).
Regulatory scrutiny
Court questions why trade margins on anti-cancer drugs are capped
The court also questioned the government's role in regulating medicine prices, citing a huge difference between the maximum retail price (MRP) and the price at which medicines are sold to retailers.
"The government is allowing this to happen. It is under the government's own eyes that it is happening," observed the bench.
The court also questioned why trade margins on anti-cancer drugs were capped at 30% of their MRP but not extended to other medicines.
Pricing defense
Court unconvinced by defense of private hospitals
Senior Advocate Mukul Rohatgi defended private hospitals, saying they are necessary due to an overstretched public healthcare system.
He said most of their revenue comes from insurance and government health schemes, arguing that forcing hospitals to slash drug margins would lead to an institutional collapse.
"Hospital will collapse. We cannot trust patients to bring medicine from outside. Half of the medicines in...market are anyway spurious. If I reduce drug prices, prices across...board will increase, won't make any difference," Rohatgi argued.
Order reserved
Supreme Court reserves order in drug pricing case
However, the court remained unconvinced, as it questioned how hospitals could justify charging patients 100-200 times the cost of medicines.
It also rebuffed the government's submission that it was merely balancing market forces with drug availability, pointing out the Centre had repeatedly failed to explain the massive disparity between manufacturer costs and retail pricing.
"You're dealing with....lives of people," the court observed, before reserving its verdict on the plea seeking price regulations and trade margin caps on non-scheduled medicines.