'Inflated medicine prices are daylight robbery': SC pulls up pharma companies over huge MRP-PTR gap

Taking exception to the large gap between the price to retailer (PTR) and the maximum retail price of certain cancer medicines, the Supreme Court on Tuesday asked why manufacturers should be permitted to fix MRP several times higher than their actual sale price.

Drug manufacturers and retailers are committing "daylight robbery" by selling essential medicines at inflated prices to patients, a bench comprising Justices Vikram Nath and Sandeep Mehta said. People sell their jewellery to get these medicines, it noted.

The bench described the disparity in the prices of life-saving medicines as a serious issue affecting patients. "There are essential medicines for cancer for which the MRP is ₹27,000 and the PTR is ₹2,700. That is absolute rampage and carnage and broad daylight dacoity with the patients," Justice Mehta said. "How can a patient be cheated for a medicine which the manufacturer sells to the retailer at ₹2,700 and the 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," the judge said.


Read more - Sulphur prices surge: Govt plans differential subsidies for DAP production

Such inflated pricing structures result in systemic fraud on public exchequers when medical expenses are reimbursed under state health schemes, said the court. "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."

Referring to cholesterol buster Rosuvas, the court said, "A strip (of tablets) costs about ₹214 because it is not in the scheduled drugs controlled under the DPCO (Drug Pricing Control Order). And, if Rosuvas contains a combination of aspirin, it comes within the DPCO scheduled medicines and costs ₹70, though a combination should be costlier. The disparity is there."

If all medicines were brought within a unified price-fixation umbrella, the controversy surrounding compulsory generic prescriptions might become redundant, the bench said.

Senior counsel Kapil Sibal, appearing for the Indian Pharmaceutical Alliance, submitted that pharma companies themselves do not retain these profit margins, as the inflation occurs primarily at the retail and the hospital level. "At what price it is sold to the stockist is the real issue," Sibal said, asking the court to examine the price at which stockists and retailers receive these drugs.

The top court was hearing a petition seeking mandatory generic drug prescriptions, strict initial price controls on non-scheduled medicines and MRP capping on medical devices. Under the Drug Price Control Order, 2013, the National Pharmaceutical Pricing Authority fixes ceiling prices for 1,000 scheduled drugs, leaving nearly 82% of medicines in the market non-scheduled, the petition alleged.