₹2,700 cancer medicine sold for ₹27,000: Supreme Court flags "broad daylight dacoity" of patients

The Supreme Court on Tuesday took serious exception to the absence of price-control mechanisms for life-saving medicines as it flagged huge differences between the Price to Retailer (PTR) and Maximum Retail Price (MRP) of cancer-curing drugs [Kishan Chand jain v. Union of India].

A Bench of Justices Vikram Nath and Sandeep Mehta said the difference in prices is nothing short of daylight robbery being committed on vulnerable patients by drug manufacturers and retailers.

"There are essential medicines for cancer for which MRP is ₹27,000 and PTR is ₹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 ₹2,700 and MRP is printed at ₹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," Justice Mehta remarked.

The Court further noted that such inflated pricing structures result in systemic fraud on public exchequers when medical expenses are reimbursed under state health schemes.

"When patients are taking treatment under Ayushman Bharat scheme, this whole price has to be paid by the taxpayers. Hospitals are buying medicines at these prices and then reimbursing from the government. It’s ultimately taxpayer’s money. There is a clear-cut case of fraud," the Court added.

The Court was hearing a petition seeking mandatory generic drug prescriptions, strict initial price controls on non-scheduled medicines, and maximum retail price caps on medical devices.

During the hearing, petitioner Kishan Chand Jain submitted that under the Drug Price Control Order (DPCO) of 2013, the National Pharmaceutical Pricing Authority (NPPA) fixes ceiling prices for only around 1,000 "scheduled" drugs, leaving nearly 82 per cent of medicines in the market non-scheduled.

Jain pointed out that because no upfront price-fixation regulations exist for non-scheduled drugs at the initial launch stage, manufacturers assign arbitrarily inflated launch prices to offer massive profit margins to retailers and private health establishments.

"There are two types of medicines under DPCO. 82% medicines are non-schedule medicines. There is no control on initial price fixation. We are not on ceiling prices. We are on price fixation of non-schedule medicines," Jain argued.

Justice Mehta illustrated the pricing anomaly using a common cholesterol-lowering statin as an example.

"A tablet of Rosuvas - a strip costs about ₹214 because it is not in the scheduled drugs controlled under DPCO. And if Rosuvas contains a combination of aspirin, it comes within DPCO scheduled medicines and costs ₹70. Though a combination should be costlier, the disparity is there," the judge observed.

Addressing the broader impact of un-capped retail prices, the Bench questioned how such exorbitant margins could be justified when common citizens are forced to sell their homes and ornaments to pay for life-saving treatments.

"If that is not extortion, what else is it? A ₹100 medicine is being purchased by him for ₹2,000," the Bench remarked.

The Bench further observed that if all medicines were brought within a unified price-fixation umbrella, the controversy surrounding mandatory generic prescriptions might become redundant.

"If all medicines are brought within that umbrella of price fixation, we may not need even a system of generic medicine. Everything will be at par," the Court noted.

Representing the Indian Pharmaceutical Alliance (IPA), Senior Advocate Kapil Sibal pointed out that pharma companies themselves do not retain these massive profit margins, as the inflation occurs primarily at the retail and hospital level.

"At what price it is sold to the stockist is the real issue," Sibal said, urging the Court to examine the price at which stockists and retailers receive these drugs.

Additional Solicitor General KM Nataraj, appearing for the Union government, submitted that the Union government does not view the matter as adversarial and remains committed to ensuring affordable medicines reach every citizen.

"Whatever there is scope for improvement, definitely we'll try to improve. Medicine should reach the last person," Nataraj assured the Court, pointing to the Jan Aushadhi Kendra initiative.

However, the petitioner questioned the reach such government outlets, pointing out that out of a total pharmaceutical market of ₹2,500 billion (₹2.5 lakh crore), Jan Aushadhi Kendras account for only around ₹22 billion (₹2,200 crore), less than 1 per cent of overall medicine sales.

"The issue is, for those medicines which are not available in Jan Aushadhi Kendras, where does the patient go?" Justice Mehta asked.

Ultimately, the Court adjourned the proceedings and listed the matter for further hearing on September 29.