New Delhi, Oct. 12: The Supreme Court on Monday questioned why the Centre’s proposed cap on trade margins was confined to certain cancer medicines and asked whether similar regulation should extend across the pharmaceutical market, including medical devices, particularly where large gaps between procurement prices and maximum retail prices (MRPs) raised concerns over whether existing pricing mechanisms adequately protected patients from excessive markups.
A bench comprising Justice Vikram Nath and Justice Sandeep Mehta took note of the Centre’s proposal to impose a 30 per cent cap on trade margins for specified cancer drugs but asked why the issue should be examined only in relation to anti-cancer medicines.
Solicitor General Tushar Mehta told the court that the government would notify a list of cancer drugs covered by the proposed cap and periodically update it to include additional anti-cancer medicines, depending on market developments and public-health considerations, while excluding inexpensive drugs.
The bench, however, referred to instances where the price at which medicines or medical devices reached retailers was substantially lower than the MRP eventually charged to patients. It cited the example of a saline drip line and also referred to an Indian-made cardiac stent stated to have a price to retailer of about ₹5,000 against an MRP of ₹25,000.
The court said such disparities warranted scrutiny and asked whether a broader ceiling on margins could reduce incentives for unnecessary medical interventions driven by high markups. Mehta pointed out that cardiac stents were already subject to price regulation.
The bench also referred to the pricing of Azithromycin while questioning whether existing mechanisms sufficiently served patients’ interests.
Appearing for the Centre, Additional Solicitor General Aishwarya Bhati urged caution against excessive regulation, submitting that drug pricing required a balance between affordability, availability and market sustainability. She said India already had some of the lowest medicine prices globally and warned that over-regulation could disturb market dynamics and adversely affect availability.
Bhati submitted that the government did not intend to control the entire pharmaceutical ecosystem, prompting the bench to ask why broader regulation across the range of drugs could not nevertheless be considered.
The court was hearing a plea seeking regulation of initial prices of non-scheduled medicines and price caps on medical devices. It will hear the matter further on October 27.
Pramod kumar is a Senior Journalist, Covering Supreem Court of India
