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Supreme Court Slams '' in Cancer Drug Pricing with 10-Fold Markup
The on Tuesday delivered a blistering condemnation of the pharmaceutical industry's pricing practices, characterizing the sale of a life-saving cancer medicine at a maximum retail price (MRP) of ₹27,000 despite a price to retailer (PTR) of just ₹2,700 as "" against patients. A bench comprising Justices Vikram Nath and Sandeep Mehta expressed profound shock at the ten-fold disparity, questioning the absence of effective price controls on the vast majority of medicines that fall outside the scheduled list under the .
The observations came during the hearing of two public interest litigations filed by Kishan Chand Jain and Dr. Sanjay Kulshresthra, seeking mandatory generic prescriptions, regulation of initial prices for non-scheduled medicines, and price caps on medical devices. The Court's strong language underscored the systemic failure to protect vulnerable patients from exploitative pricing that forces families to sell homes and ornaments to afford essential oncology care.
Background: The DPCO Framework and Regulatory Gaps
Under the DPCO 2013, the fixes ceiling prices for approximately 1,000 scheduled formulations listed in . However, the petitioner Kishan Chand Jain submitted that around 82% of medicines by value remain non-scheduled, meaning manufacturers face no upfront price regulation when launching these products. The only restriction is that once an initial price is set, the manufacturer cannot increase it by more than 10% annually.
“For instance, a manufacturer wants to launch a medicine today. It can fix one rupee, it can fix 1,000 rupees. There is no regulatory regime to control the price fixation. Only after he has fixed it, then there is a restriction that he cannot increase it more than 10%,” Jain argued. This regulatory vacuum allows manufacturers to assign arbitrarily high MRPs, creating enormous margins for retailers and hospitals while leaving patients with no recourse.
The Court was shown documents revealing stark disparities: a medicine with an MRP of ₹73 had a PTR of just ₹22.75, while another with an MRP of ₹61 had a PTR of ₹9.65. The most egregious example involved a cancer drug with an MRP of ₹27,000 and a PTR of ₹2,700—a tenfold difference.
Court's Observations: 'Absolute Rampage and Carnage'
Justice Sandeep Mehta, who authored the bench's most pointed remarks, did not mince words. “There are medicines, essential medicines for cancer, which the MRP is 27,000 and the PTR is 2700. That's absolute rampage, carnage with the...absolute dacoity, . How a patient can be cheated for a medicine, which the manufacturer sells to the retailer at 2700, The MRP is printed at 27,000? Ten times! It is very surprising that the authorities who are supposed to take the decision on this are absolutely silent. We need not spell out the reason for that,” he said.
The bench further questioned the rationale behind permitting such disparities. “Why this disparity at all? A medicine which is, as a matter of fact, sold by the manufacturer to the retailer at 10% of its MRP, why it has got this high MRP? Why should there be such disparity?” Justice Mehta asked.
The Court also highlighted an anomaly involving the commonly used statin Rosuvas. When sold as a non-scheduled drug, a strip costs around ₹240, but when combined with aspirin—falling within the scheduled category—the same combination costs around ₹70. “So a combination should be more costly. It should be costlier, but the disparity is there. It's a very commonly used drug,” Justice Mehta observed.
Impact on Public Health Schemes and Taxpayer Money
A significant dimension of the Court's concern was the burden on government-funded healthcare schemes such as Ayushman Bharat. The bench noted that when hospitals purchase medicines at inflated MRPs and claim reimbursement from public funds, the taxpayer ultimately bears the cost.
“There is one more factor. Many patients are now getting treatment under the PM, GSY, Ayushman Bharat. So, ultimately, it's the taxpayer's money which goes into all this. Because the medicine, which is supposed to be sold for 200 rupees, is dispensed for 2,000 rupees. The hospital gets the reimbursement, and the taxpayer pays it. Government is paying and it is ultimately the taxpayer's money. All government services are. This is a clear-cut case of on the face of it,” Justice Mehta remarked.
This observation reframed the issue from a matter of individual hardship to a systemic on the public exchequer, potentially triggering deeper regulatory scrutiny.
Arguments and Responses: Manufacturers vs. Retailers
, appearing for the , argued that manufacturers do not retain the large margins reflected in retail prices. He contended that the real issue lies further down the distribution chain, with retailers and corporate hospitals capturing excessive profits. Justice Mehta, however, pointed out that manufacturers fix the MRP, making them ultimately responsible for the pricing structure.
, representing the Union Government, assured the Court that the Centre views the matter constructively and is open to improvements. He cited the Pradhan Mantri Bhartiya Janaushadhi Pariyojana as an existing initiative for affordable medicines. However, the bench questioned what recourse patients have for medicines not available at Janaushadhi Kendras.
Petitioner Dr. Sanjay Kulshresthra highlighted the problem of antimicrobial resistance linked to excessive margins on antibiotics, noting that a medicine with a printed price of ₹4,196 was available for ₹980, and another antibiotic showed a 1,500% disparity. He also drew attention to the coercive practices of corporate hospitals that require patients to purchase medicines from their own stores at full MRP, leaving poor patients with no practical choice.
Legal Implications and Next Steps
The Court has adjourned the matter to , for further hearing, with directions for the Union of India and the to present detailed submissions. The case raises fundamental questions about the constitutionality of the DPCO's distinction between scheduled and non-scheduled medicines, especially after the 2007 amendment to the that declared all drugs as essential commodities.
Justice Mehta's remark—“If that is not , what else it is?”—hints at potential legal consequences beyond price regulation, including possible criminal liability for manufacturers and retailers engaged in such pricing practices. The Court also questioned the legality of the DPCO's framework, noting that the statutory definition of “drug” under the does not distinguish between scheduled and non-scheduled medicines, yet the DPCO creates an artificial classification that leaves 82% of medicines unregulated.
The petitioners have also sought regulation of medical devices, which were notified as “drugs” under from . The Court's eventual ruling could mandate a comprehensive price-fixation mechanism covering all drugs and devices, potentially reshaping India's pharmaceutical market.
Conclusion
The Supreme Court's sharp critique of drug pricing practices marks a significant moment in the ongoing struggle for affordable healthcare in India. By characterizing the 10-fold markup on cancer medicines as "," the bench has signaled that the status quo is untenable. The upcoming hearing on September 29 will be closely watched by legal professionals, pharmaceutical companies, and patient advocacy groups alike. The case has the potential to force a fundamental overhaul of the DPCO regime, ensuring that essential medicines are priced reasonably and that the burden of healthcare does not fall disproportionately on the poor and the public exchequer.
