SC to government: Cap prices of non-patented medicines

The Supreme Court in India has instructed the government to cap the prices of non-patented medicines, rather than just limiting the prices of anti-cancer drugs as previously done. Solicitor General Tushar Mehta and Assistant Solicitor General Aishwarya Bhati informed the court of the government's decision to cap trade margins on anti-cancer drugs at 30% of the maximum retail price.

However, the court questioned why only anti-cancer drugs were targeted and raised concerns about the extremely high prices of other medicines. For instance, the price from the retailer to the manufacturer of an Indian-made cardiac stent is Rs 5,000, but the maximum retail price (MRP) is Rs 25,000. Similarly, the price from the retailer to the distributor for a drip line for saline is Rs 11, but the MRP is around Rs 270.

The court emphasized that there is a significant gap between the price for the retailer and the MRP, highlighting numerous examples of inflated prices. During the hearing, the bench of Justices Vikram Nath and Sandeep Mehta requested the government to provide a single justification for not controlling the prices of all non-patented medicines, questioning why only the range of drugs should not be brought under price control.

The court acknowledged that while there are valid concerns about the need for sufficient income and livelihood for retailers, especially in areas with lower sales, the overall prescription drug market in India is highly competitive, with numerous pharmaceutical companies driving down prices to some extent. However, the court remained unconvinced by the government's justifications, stating that they did not fully consider the plight of patients who face exorbitant prices.

The government argued that intervention by the government could adversely affect the availability of drugs, particularly in rural areas. The court acknowledged the limited bargaining power of patients, as well as their limited knowledge of drug substitutes and prices, leading to potential malpractices in hospitals. The government admitted that hospitals often purchase medicines from manufacturers offering the highest trade margins, which are then sold to patients at the MRP, resulting in margins ranging from 170% to 700% or more in the case of anti-cancer drugs. The apex court adjourned the case to October 27 for further consideration.