‘Broad daylight dacoity’: SC flags 10-fold gap in cancer medicine pricing
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New Delhi, Sep 22 : The Supreme Court on Tuesday questioned the huge disparity between the price at which medicines are sold by manufacturers to retailers and the maximum retail price (MRP) printed on them, observing that allowing a cancer medicine bought for Rs 2,700 to be sold at an MRP of Rs 27,000 amounted to “broad daylight dacoity”.
A Bench of Justices Vikram Nath and Sandeep Mehta made the observations while hearing public interest litigations (PILs) on regulating medicine prices, generic medicines, medical devices, and prescription practices.
“There are medicines, essential cancer medicines, whose MRP is 27,000 and the PTR (Price to Retailer) is 2700. That's absolute dacoity, broad daylight dacoity. How can a patient be cheated on a medicine that the manufacturer sells to the retailer at 2700, while the MRP is printed at 27,000? Ten times!” Justice Mehta observed.
The judge also questioned the authorities responsible for regulating medicine prices, asking why such a disparity was being permitted.
“It is very surprising that the authorities who are supposed to decide on this are absolutely silent. We need not spell out the reason for that,” Justice Mehta said.
The Supreme Court further questioned why manufacturers should be allowed to fix MRPs several times higher than the actual price at which they supply medicines to retailers.
“Why this disparity at all? A medicine which is, as a matter of fact, sold by the manufacturer to the retailer at 10% of its MRP, why has it got this high MRP? Why should there be such a disparity?” the apex court asked.
PIL litigant Kishan Chand Jain, appearing in person, submitted that there was no effective regulatory mechanism governing the initial price fixation of medicines outside the controlled-price list.
“For instance, a manufacturer wants to launch a medicine today. It can fix it at one rupee; it can fix it at 1,000 rupees. No regulatory regime controls price fixation. Only after he has fixed it, there is a restriction that he cannot increase it by more than 10%,” Jain submitted.
He referred to documents showing substantial differences between the MRP and PTR of medicines.
According to the submissions, one medicine carried an MRP of Rs 73 against a PTR of Rs 22.75, while another had an MRP of Rs 61 against a PTR of Rs 9.65. Jain argued that medical devices could also carry substantial mark-ups and required an effective price-fixation mechanism.
The Justice Nath-led Bench also examined concerns relating to generic medicines. PIL litigant Dr Sanjay Kulshresthra submitted that generic medicines could make treatment more affordable. Still, concerns about their quality and reliability needed to be addressed for generic prescribing to work effectively.
He submitted that where a doctor prescribed a generic medicine without specifying a brand, the choice of manufacturer would effectively be left to the pharmacist, who had not examined the patient and could have commercial considerations while making the choice. Kulshresthra suggested that patients should retain a choice between generic and branded medicines.
Additional Solicitor General K.M. Nataraj, appearing for the Union government, submitted that the Centre was not treating the proceedings as adversarial and would consider areas where the existing system could be improved.
Senior advocate Kapil Sibal, appearing for the Indian Pharmaceutical Alliance, submitted that manufacturers were not responsible for the high prices ultimately paid by patients and contended that retailers were earning substantial profit margins.
However, the Supreme Court questioned the contention in the context of the MRP printed on medicines, observing that the manufacturer itself fixes the MRP. The apex court has now posted the matter for further hearing on September 29, when it will hear further submissions from Sibal and the Union government.
A Bench of Justices Vikram Nath and Sandeep Mehta made the observations while hearing public interest litigations (PILs) on regulating medicine prices, generic medicines, medical devices, and prescription practices.
“There are medicines, essential cancer medicines, whose MRP is 27,000 and the PTR (Price to Retailer) is 2700. That's absolute dacoity, broad daylight dacoity. How can a patient be cheated on a medicine that the manufacturer sells to the retailer at 2700, while the MRP is printed at 27,000? Ten times!” Justice Mehta observed.
The judge also questioned the authorities responsible for regulating medicine prices, asking why such a disparity was being permitted.
“It is very surprising that the authorities who are supposed to decide on this are absolutely silent. We need not spell out the reason for that,” Justice Mehta said.
The Supreme Court further questioned why manufacturers should be allowed to fix MRPs several times higher than the actual price at which they supply medicines to retailers.
“Why this disparity at all? A medicine which is, as a matter of fact, sold by the manufacturer to the retailer at 10% of its MRP, why has it got this high MRP? Why should there be such a disparity?” the apex court asked.
PIL litigant Kishan Chand Jain, appearing in person, submitted that there was no effective regulatory mechanism governing the initial price fixation of medicines outside the controlled-price list.
“For instance, a manufacturer wants to launch a medicine today. It can fix it at one rupee; it can fix it at 1,000 rupees. No regulatory regime controls price fixation. Only after he has fixed it, there is a restriction that he cannot increase it by more than 10%,” Jain submitted.
He referred to documents showing substantial differences between the MRP and PTR of medicines.
According to the submissions, one medicine carried an MRP of Rs 73 against a PTR of Rs 22.75, while another had an MRP of Rs 61 against a PTR of Rs 9.65. Jain argued that medical devices could also carry substantial mark-ups and required an effective price-fixation mechanism.
The Justice Nath-led Bench also examined concerns relating to generic medicines. PIL litigant Dr Sanjay Kulshresthra submitted that generic medicines could make treatment more affordable. Still, concerns about their quality and reliability needed to be addressed for generic prescribing to work effectively.
He submitted that where a doctor prescribed a generic medicine without specifying a brand, the choice of manufacturer would effectively be left to the pharmacist, who had not examined the patient and could have commercial considerations while making the choice. Kulshresthra suggested that patients should retain a choice between generic and branded medicines.
Additional Solicitor General K.M. Nataraj, appearing for the Union government, submitted that the Centre was not treating the proceedings as adversarial and would consider areas where the existing system could be improved.
Senior advocate Kapil Sibal, appearing for the Indian Pharmaceutical Alliance, submitted that manufacturers were not responsible for the high prices ultimately paid by patients and contended that retailers were earning substantial profit margins.
However, the Supreme Court questioned the contention in the context of the MRP printed on medicines, observing that the manufacturer itself fixes the MRP. The apex court has now posted the matter for further hearing on September 29, when it will hear further submissions from Sibal and the Union government.
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