The Supreme Court of India has sharply questioned the practice of corporate hospitals imposing exorbitant markups on essential medicines, particularly cancer drugs. Justices Vikram Nath and Sandeep Mehta described a tenfold price difference on a cancer drug—sold to retailers for Rs 2,700 but carrying an MRP of Rs 27,000—as “carnage.”
Court Questions Hospital Pharmacy Practices and Pricing
During proceedings, the bench directly addressed Solicitor General Tushar Mehta, representing the Centre, urging the government to investigate why corporate hospitals often mandate patients purchase medicines from their in-house pharmacies or specified outlets. The court highlighted that such practices disproportionately affect patients and taxpayers, especially those relying on government healthcare schemes.
“Why this 10 times’ markup? Where does this huge chunk of money go? Who is benefiting from it?” Justice Mehta queried, pointing to the stark contrast between the retailer's acquisition cost and the final MRP. The court also expressed concern over the perceived lack of accountability within the pharmaceutical sector and the perceived commercial nature of corporate hospitals.
“Corporate hospitals don't spare anyone. They won't allow even the dead body to be taken out. The pharma sector is not bothered,” the bench remarked, emphasizing the severe impact on vulnerable patients.
Call for Uniform Margins and Ethical Standards
The Supreme Court suggested implementing a uniform 16% margin on all drugs, regardless of whether they are classified as essential or non-essential. Justice Mehta argued that such distinctions should not dictate pricing, as the ultimate burden falls on the common taxpayer.
The judiciary also raised concerns about the ethical implications for medical practitioners and the potential for patients to doubt the authenticity of medicines if they find the same drug at significantly lower prices outside the hospital. The bench cited examples of common statin drugs with varying prices based on combinations, questioning the underlying rationale.
Government to Respond on Medicine Price Regulation
The Solicitor General acknowledged the gravity of the issue and requested two weeks to discuss the matter with relevant officials. He indicated a need to strike a balance, suggesting that pharmaceutical companies might not be the primary beneficiaries of these markups, implying private hospitals could be gaining substantially.
The court is hearing two petitions challenging the existing drug pricing regulations, particularly the distinction between scheduled medicines (with ceiling prices) and non-scheduled formulations, which account for a large portion of the market and have more flexible MRPs. The petitions seek stricter enforcement of price controls, action against violations, and measures to curb unethical overpricing.
The matter has been adjourned, with the Centre expected to present its response on October 12, as the court continues its thorough examination of an issue impacting a significant segment of society.