‘Why Only Cancer Drugs?’ Supreme Court Questions Medicine Markups, Seeks Wider Scrutiny

The Supreme Court on Monday questioned why the Centre’s proposed cap on trade margins was limited to specified cancer medicines and sought a broader examination of excessive markups across medicines and medical devices.

A bench of Justices Vikram Nath and Sandeep Mehta raised the issue after the government outlined its decision to impose a 30% trade margin cap on selected anti-cancer drugs.

“This relates to only cancer drugs. What about the overall?” the bench asked.

The court was hearing a petition seeking regulation of the initial prices of non-scheduled medicines, mandatory generic prescriptions and price caps on medical devices. The next hearing is scheduled for October 27.

CENTRE OUTLINES CANCER DRUG CAP

Solicitor General Tushar Mehta said the government would notify the list of cancer medicines covered by the proposed cap.

The list would be updated periodically to include additional anti-cancer drugs, taking market developments and public health considerations into account, while excluding inexpensive medicines, he said.

The bench questioned why similar scrutiny could not extend to other drugs and medical devices where substantial differences existed between prices charged to retailers and the maximum retail price.

The bench cited the example of an Indian-made cardiac stent with a price to retailer of ₹5,000 and an MRP of ₹25,000.

It also questioned the pricing of saline drip lines and the antibiotic azithromycin, asking how the disparities cited before it served patients’ interests.

The figures reported for those two examples did not clearly establish comparable pricing units.

The court further questioned whether high margins could encourage unnecessary medical procedures.

“If you put a cap of 16 per cent, you will reduce (medical) interventions by three-fourths. Doctors cause interventions to be done because the margins are so high,” the bench remarked.

Mehta responded that cardiac stents were already subject to price caps.

GOVERNMENT WARNS OF IMPACT ON AVAILABILITY

Additional Solicitor General Aishwarya Bhati said pricing regulation must balance affordability, availability and market considerations.

She cautioned that excessive intervention could disrupt the pharmaceutical market and affect the supply of medicines.

“We don’t want to control the entire ecosystem of drugs,” Bhati submitted.

“Why can’t you control the entire range of drugs?” the bench asked.

Bhati said India already had some of the world’s lowest medicine prices. The court nevertheless stressed the need to examine whether existing mechanisms adequately protected patients from excessive markups.

Petitioner Kishan Chand Jain submitted that around 82% of medicines fell outside the scheduled category under the Drugs (Prices Control) Order, 2013, and were not subject to upfront price fixation.

The petition argues that the absence of ceiling prices for such medicines gives manufacturers greater flexibility in setting MRPs.

At an earlier hearing, the court had cited medicines reportedly bought for around ₹2,700 and sold at an MRP of ₹27,000.

“That’s broad daylight dacoity with the patients,” the bench had remarked.

It had also asked why a uniform 16% cap over the price to retailer could not be applied to medicines and medical devices. Monday’s hearing did not impose such a cap.

With inputs from ANI