The Supreme Court on Tuesday reserved its verdict on a plea seeking price regulations and trade margin caps on non-scheduled medicines and medical consumables [Kishan Chand Jain vs Ethics And Medical Registration Board (EMRB) (Erstwhile Medical Council Of India) And Ors.].
During the hearing of the matter, a bench of Justices Vikram Nath and Sandeep Mehta posed sharp questions to the Central government and private hospitals over massive mark-ups on essential drugs.
The Court slammed the prevailing pricing regime, describing exorbitant hospital margins as "loot" and "dacoity" that prey on vulnerable patients with zero bargaining power.
The Court also shared a disturbing incident involving a drug dealer whose wife was undergoing cancer treatment at a renowned private hospital.
"The dealer requested the hospital authorities, 'Sir, I am myself a dealer and to me the (chemotherapy) injection comes at ₹11,000 dealer price.' The hospital refused to administer that injection and charged ₹1,30,000 for that same injection. Can you show any justification for this loot, please? Why this difference? Where does the money go?" the Court asked.
When Additional Solicitor General (ASG) Aishwarya Bhati submitted that the government has been "constantly calibrating" pricing policies, the Bench retorted,
"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 Court was hearing a public interest litigation (PIL) filed by advocate Kishan Chand Jain seeking mandatory generic drug prescriptions, strict initial price controls on non-scheduled medicines, and statutory margin caps on medical devices under the Drug Price Control Order (DPCO).
The Court pointed out that despite the Centre's recent decision to cap trade margins for anti-cancer drugs at 30 percent, nearly 90 percent of medicines in the market remain completely outside the purview of the DPCO.
"Why is the DPCO in place at all? The government is allowing this to happen. There have been three parliamentary committees on this. And their outcome is not very convenient to people who pull the strings, let us tell you," the Bench remarked.
When you talk of patients and life, should we have such capitalistic thinking?Supreme Court
It also flagged that consumables like saline drip lines, with a price to retailer (PTR) of ₹15, are routinely billed to patients at ₹250.
"Say ₹100 MRP is printed on the medicine. The retailer gets it for ₹10 or ₹20. Then why is the price being mentioned as ₹100? Why is the government allowing it to continue and saying they will not regulate it because it is not a scheduled drug? You talk about innovation, tell us in the last 30 years, five new molecules developed by the Indian pharma industry. Name five," the Bench asked the Centre.
The Court further noted that while welfare initiatives like the Ayushman Bharat scheme reimburse medical expenses, government coverage is capped at ₹5 lakh, leaving ordinary families to bear the brunt of bloated hospital bills.
Defending private hospitals, Senior Advocate Mukul Rohatgi submitted that private healthcare has to step in because the state-run health infrastructure is overstretched. He argued 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 the market are anyway spurious. If I reduce drug prices, prices across the board will increase, won’t make any difference. I have to keep all my facilities functioning 24x7. I have to bear costs to keep the infrastructure ready," Rohatgi argued.
The bench, however, refused to accept the justification.
"Hospital can survive through other means. Not through this dacoity... You are a commercial hospital. You charge for everything. But why should medicine be quoted at 100, 200 times? There’s a component of corporate discount provided by manufacturers that is still under the cover. You can’t justify saying MRP is rightly quoted because I am running a private hospital," the bench said.
Rebuffing the government’s submission that it was merely balancing market forces with drug availability, the Bench pointed out that the Centre had repeatedly failed to explain the massive disparity between manufacturer costs and retail pricing.
"You're dealing with the lives of people. Don’t take it as commerce. There is no balancing at all," the Court observed, before reserving its verdict.
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