Why not cap prices of all medicines, SC asks government

New Delhi: The Supreme Court on Monday said the Centre's response on capping the trade margin of anti-cancer drugs at 30 per cent of the maximum retail price (MRP) is "hardly anything to be happy about" and questioned why the government cannot cap trade margins of other medicines.

The Centre, which had earlier faced severe criticism from the top court for steep markup of cancer drugs by hospitals, said that the government has taken an important decision to cap the trade margin on anti-cancer drugs at 30 percent of the MRP, expected to save patients approximately Rs 2,500 crore annually.

A bench of Justices Vikram Nath and Sandeep Mehta said that the Centre's response was insufficient and flagged that a single saline drip was sold in market for Rs 270 while its actual cost was Rs 11.

The Court also asked how patients would benefit if pharmaceutical manufacturers were allowed to fix drug prices and questioned the justification for higher medicine prices.

"There is hardly anything to be happy about. There is actually nothing for the benefit of the patients," the bench observed as Solicitor General Tushar Mehta and Additional Solicitor General Aishwarya Bhati, appearing for the Centre, tried to explain the regime in place.

The submission was made during the hearing of a petition concerning the sale of essential medicines at inflated prices before the Bench of Justices Vikram Nath and Sandeep Mehta.

The Court has listed the matter for further hearing on October 27.

Notably, on September 22, the Bench had flagged massive price disparity in essential cancer medicines, where a drug sold to retailers for ₹2,700 carries an MRP of ₹27,000. Justice Mehta had said, “How can a patient be cheated?”, questioning authorities’ silence over the pricing disparity. “It’s Ultimately Taxpayers’ Money”, he had said.

The bench had also noted that hospitals purchase medicines at these prices and seek government reimbursement for patients treated under the AYUSH scheme. “It’s ultimately taxpayer’s money. There is a clearcut case of fraud," the bench had remarked.

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