Private hospitals functioning like industries, not service providers: Supreme Court

The Supreme Court on Tuesday criticized the commercialization of private healthcare, observing that corporate hospitals operate as profit-driven industries rather than service providers while common citizens and taxpayers bear the brunt of exorbitant drug markups [Kishan Chand Jain v. Union of India]..A Bench of Justices Vikram Nath and Sandeep Mehta noted that corporate hospitals compel admitted patients to purchase medicines exclusively from their in-house pharmacies at inflated retail prices, while patients who bring medicines from outside are left high and dry with hospitals refusing to assure treatment..The hearing comes as a continuation of proceedings from last week, where the top court had flagged a ten-fold price difference in a cancer drug - where the Price to Retailer (PTR) was ₹2,700 but the Maximum Retail Price (MRP) was ₹27,000. At the time, the Court had termed the un-capped markup an "absolute rampage and carnage" and "broad daylight dacoity.".₹2,700 cancer medicine sold for ₹27,000: Supreme Court flags "broad daylight dacoity" of patients .During today's hearing, the Bench highlighted that when patients undergo treatment under government-sponsored welfare schemes, corporate hospitals obtain full reimbursement from the exchequer based on these artificially inflated MRPs."In corporate hospitals... ₹27,000 MRP. PTR is around ₹3,000. Just see the difference. Corporate hospital says you have to buy from our chemist. If you bring it from outside, we are not assuring treatment. If that patient is taking treatment under a government scheme, who reimburses? The taxpayer pays. Why not uniform criteria?" the Bench asked.Appearing for the Central government, Solicitor General (SG) Tushar Mehta acknowledged the issue, submitting that the government needs to find a balanced resolution."We will have to find a way out. Some way that balances equities... let me sit with the officers and then respond," SG Mehta submitted, requesting a short adjournment..Questioning why the government maintains a distinction between scheduled essential drugs and non-scheduled medicines, the Bench asked why a uniform 16 per cent margin cap cannot be enforced across all pharmaceutical products under the Essential Commodities Act."Why this distinction? Essential, non essential? Why not keep 16 per cent margin on MRP on everything?" the Bench asked..The Bench further flagged the severe crisis of consumer trust caused by inflated pricing. Even when an honest retail chemist is willing to sell a ₹27,000 MRP medicine at its fair price of ₹3,000, vulnerable patients are afraid to buy it, suspecting that the discounted drug might be fake or spurious, the Court pointed out. "Suppose there is a medicine, the patient goes to the chemist; chemist says MRP may be ₹27000, I will give for ₹3000. Will the patient think it is genuine? He will think it will be a spurious one. Where does this huge chunk of money go?" the Bench questioned.When SG Mehta pointed out that pharmaceutical manufacturers are often not the primary gainers from these price spreads and that private hospitals absorb the margins, the Court reiterated that the ultimate loss is borne by taxpayers and patients."Corporate hospitals are industries. It is not a service at all. Why should common man suffer all this," the Court remarked. .The Court was hearing a petition filed by Kishan Chand Jain seeking mandatory generic drug prescriptions, strict initial price controls on non-scheduled medicines, and maximum retail price caps on medical devices.The Court today granted some more time to the Solicitor General to hold inter-departmental consultations on the issues flagged today. The Court has listed the matter for further hearing on October 12. .[Read Live Coverage]