Daijiworld Media Network - New Delhi
New Delhi, Oct 12: The Centre on Monday informed the Supreme Court that it has decided to cap trade margins on anti-cancer medicines at 30 per cent of the maximum retail price (MRP), while the apex court called for a broader review of medicine pricing across the pharmaceutical sector.
Solicitor General Tushar Mehta, appearing for the Union government, told a bench of Justices Vikram Nath and Sandeep Mehta that the Centre would notify a list of cancer drugs to which the proposed trade margin cap would apply.
Mehta submitted that the list could be updated periodically to include additional anti-cancer medicines, depending on market developments and public health considerations, while excluding inexpensive drugs.
The development came after the Supreme Court repeatedly questioned the substantial disparity between the prices at which medicines are supplied to retailers and the MRPs printed on their packaging, raising concerns over the financial burden on patients and the need for an effective regulatory framework.
However, the bench questioned whether the proposed measure would address the wider issue of excessive trade margins on medicines and medical devices beyond the anti-cancer segment.
During the hearing, the apex court cited the example of an Indian-made cardiac stent supplied to retailers for around Rs 5,000 but carrying an MRP of Rs 25,000, and questioned the justification for such a disparity.
Mehta responded that stents were already subject to price caps.
The bench also referred to another drug with an MRP of Rs 2,850 against a price to stockist (PTS) of Rs 78.29 and asked the Centre to explain how such pricing arrangements benefited patients.
Additional Solicitor General Aishwarya Bhati submitted that pricing was only one aspect of the government's policy and that a balance had to be maintained between affordability, availability and market considerations.
“We don't want to control the entire ecosystem of drugs,” the Centre's law officer said, arguing that excessive government intervention could adversely affect the market and the availability of medicines.
The Supreme Court, however, questioned why the government could not regulate the entire range of medicines and asked the Centre to explain how the existing pricing framework served patients' interests.
The bench also referred to the Drugs (Prices Control) Order, 2013, and questioned whether medicines subject to price controls reached consumers at prices consistent with the prescribed trade margins.
The court has posted the matter for further hearing on October 27.
The proceedings arise from public interest litigations (PILs) seeking regulation of medicine prices, initial price fixation for non-scheduled medicines, medical devices and generic medicines, as well as prescription practices.
During earlier hearings, the Supreme Court had questioned why manufacturers were permitted to fix substantially higher MRPs for medicines than the prices at which they supplied them to retailers.
On September 22, the bench led by Justice Vikram Nath had described the ten-fold difference between the retailer procurement price of an essential cancer medicine and its MRP as “broad daylight dacoity”.
On September 29, the apex court questioned why a uniform trade margin cap could not be prescribed for pharmaceutical products and raised concerns over corporate hospitals requiring patients to purchase medicines from their in-house pharmacies.
The latest proceedings come days after the Supreme Court, in a separate matter, directed the Centre to constitute a committee to examine the need for statutory regulation of pharmaceutical companies' marketing practices, including the offering of gifts, hospitality and other benefits to doctors to promote their products.
The proposed committee will consider suggestions and objections from stakeholders and recommend whether a statutory framework is required to regulate pharmaceutical marketing practices.