“Why only cancer drugs?”: SC questions Center on trade margin cap, seeks broader price regulation | Today’s news
The Supreme Court on Monday called for a wider probe into drug prices in the country, questioning why the Centre’s proposed regulation of trade margins was limited to cancer drugs and asking it to consider excessive markups in the pharmaceutical market, including medical devices.
Justices Vikram Nath and Sandeep Mehta took note of the Centre’s decision to impose a 30 per cent cap on trading margins for specific cancer drugs, but sought to see why similar scrutiny could not be extended to other drugs.
“Why only cancer drugs?”
“That only applies to cancer drugs. What about overall?” asked the bench.
Solicitor General Tushar Mehta said the Union government will announce a list of cancer drugs that will be subject to the proposed trade margin cap.
The list will be regularly updated to include other anticancer drugs in line with market developments and public health considerations, excluding low-cost drugs, he said.
However, the court questioned the limited scope of the measure and cited cases of substantial differences between the prices at which drugs and medical devices were sold to retailers and their maximum retail prices (MRP).
“Saline drip line, MRP is.” ₹11 and sells for ₹270,” the bench observed, pointing out the disparity in prices.
SC indicates the cost of a cardiac stent
The apex court also referred to a cardiac stent made in India with a retail price (PTR) of Rs ₹5,000 but MRP ₹25,000.
“If you put a ceiling of 16 per cent, you reduce (medical) interventions by three-fourths. Doctors cause interventions to be done because the margins are so high,” the bench observed.
The attorney general responded that cardiac stents are already subject to price caps.
The bench further quoted the price of azithromycin with reference to MRP at Rs ₹78,29 and no ₹2,850 for PTS and asked the government to explain how such prices serve the interests of patients.
Appearing for the Centre, Additional Solicitor General Aishwarya Bhati said the regulation of drug prices must strike a balance between affordability, availability and market considerations.
She said that too much government intervention could disrupt market dynamics and adversely affect the availability of drugs, saying that the government cannot regulate the entire pharmaceutical ecosystem.
“We don’t want to control the entire drug ecosystem,” Bhati said.
“Why can’t you control the whole range of drugs?” asked the bench.
Bhati said India already has some of the lowest drug prices in the world and warned that excessive intervention could damage market dynamics and affect availability.
The bench, however, stressed the need to examine whether the existing pricing mechanisms adequately protect patients from excessive mark-ups, especially where there are large differences between purchase prices and MRP.
The Supreme Court heard a plea aimed at regulating the initial prices of unscheduled drugs and price ceilings for medical devices. She referred the matter for further consideration on October 27.
“Daylight Dacoities with Patients”
The Supreme Court had earlier expressed concern over the steep mark-ups on life-saving drugs, citing cases where drugs were being bought at around ₹2,700 were sold at minimum price ₹27,000.
“That’s in broad daylight with patients,” the bench noted.
It asked the Center why a uniform ceiling of 16 per cent on the MRP of drugs and medical devices over and above their price to retailers could not be fixed.
The petition argued that a large majority of drugs fall outside the scheduled categories and are therefore not subject to ceiling prices, allowing manufacturers more flexibility in setting MRPs.
The cause of action demanded mandatory generic prescriptions, regulation of the initial prices of unscheduled drugs and price caps for medical devices.
Petitioner Kishan Chand Jain said around 82 per cent of the drugs fall outside the scheduled category under the Drug Price Control Ordinance (DPCO) 2013 and manufacturers are not subject to prior price fixation of these drugs.