Supreme Court Flags 10-Fold Price Gap as Cancer Drug With ₹2,700 PTR Carries ₹27,000 MRP for Patients

22 September: The bench of Justices Vikram Nath and Sandeep Mehta heard a PIL on Tuesday seeking mandatory generic prescriptions and price controls on non-scheduled medicines and medical devices.

The petitioner, Kishan Chand Jain, referred to the Drugs Prices Control Order (DPCO), 2013 and highlighted that the order regulates ceiling prices for scheduled medicines, which include around 1000 formulations only.

For the rest, non-scheduled medicines that constitute a bulk of the market, about 82% by number and 83% by value, manufacturers are free to set an MRP.
The only restriction imposed on these medicines is that their price cannot be increased by a margin higher than 10%. This freedom allows large pharma manufacturing companies to set a high initial price and gives large margins to retailers and hospitals.

He also cited an example of a few medicines with MRPs of Rs 73 and Rs 61 being sold to retailers at Rs 22.75 and Rs 9.65, respectively.

Dr. Kulshresthra, a fellow petitioner,  highlighted similar disparities, including one medicine with a printed price of Rs 4,196 available for Rs 980, and an antibiotic with a 1,500% markup.

Referring to cancer drugs and other essential medications, Justice Mehta said, “There are essential medicines for cancer for which MRP is Rs 27,000 and PTR (Price To Retailer) is Rs 2,700. That is absolute rampage and carnage and broad daylight dacoity with the patients. How can a patient be cheated for a medicine which the manufacturer sells to the retailer at Rs 2,700 and MRP is printed at Rs 27,000? It is surprising that the authorities who are supposed to take a decision on this are absolutely silent. We need not spell out the reasons for that.”

Addressing the issue, the court observed that when patients access these medications via Ayushman Bharat scheme, the taxpayers pay for it. Similarly, when hospitals buy these medicines, they reimburse the money from the government. It is ultimately the taxpayer’s money. They even labelled it as a fraud.

Responding to these observations, Additional Solicitor General (ASG) K M Nataraj said the government supports affordable access to medicines via Jan Aushadhi Kendras and will explore improvements in the same. 

He assured that the government is taking the issue seriously and, in a non-adversarial approach, he said, “Medicine should reach the last person,” citing Jan Aushadhi Kendras.

Maximum Retail Price (MRP) is the final price at which a consumer purchases a medicine from the market, including all margins, discounts and taxes (GST). Whereas a Price to Retailer (PTR) is the price at which the retailer purchases medicine from a distributor, excluding GST and retailer margin.

National Pharmaceutical Pricing Authority (NPPA)  is the government organization that is responsible for implementing and enforcing the provisions of the Drugs (Prices Control) Order.

It overlooks the availability and pricing of drugs in the market and is responsible for overseeing any legal matters.

The Drugs (Prices Control) Order (DPCO), 2013 is a government regulation that empowers the National Pharmaceutical Pricing Authority (NPPA) to fix ceiling prices for scheduled medicines. These medicines are listed under Schedule I of the DPCO and are subject to price controls. Medicines that are not included in the schedule are classified as non-scheduled medicines. While their prices are not capped, manufacturers can generally increase their prices only within the limits prescribed under the DPCO.

Schedule drugs are listed in specific schedules and their price is strictly regulated and capped by the government through  NPPA.

Non-scheduled drugs are not listed on the government’s price control list and their pricing is not capped by NPPA. Though, the annual price increase of these drugs is capped by 10%.

(Rh/MF/MSM)