Industry Odisha Bureau, Oct 28: The Supreme Court has expressed concern over steep medicine prices paid by patients in India. A bench of Justices Vikram Nath and Sandeep Mehta questioned the government’s role on Tuesday. It asked why medicines reach buyers far above what retailers pay for them. The judges said the system appeared to favour drug manufacturers over helpless patients, ET reported.
At the centre are reported discrepancies of 300–400% between retailer purchase prices and MRP. The bench sought justification for these gaps and asked who benefits. It said the government had failed to answer despite repeated questions. These were oral observations during the hearing, not a final ruling.
Such figures need careful reading. A 300% markup means a retailer pays ₹25 for a drug sold at ₹100. That equals a gross margin of 75% of MRP, not net profit. Part of the gap funds distribution, discounts, promotional incentives and pharmacy operating costs. Retailers also bear rent, staff and inventory costs. Many patients also receive discounts below the printed MRP. The gap is not uniform across all medicines sold in India.
The bench reiterated that trade margins should be capped at 16% of MRP. This would cover the supply and sale of all drugs, it said. Trade margins are the share kept by wholesalers, distributors and retailers. A cap could lower prices and improve transparency. But a uniform ceiling may affect different medicines and distribution models differently. The court has reserved its decision, so no such rule exists yet.
India already regulates some drug prices. The National Pharmaceutical Pricing Authority enforces the Drugs (Prices Control) Order, 2013. Scheduled essential medicines carry ceiling prices set by the regulator. Non-scheduled drugs face looser rules, mainly limits on annual price increases. Monitoring prices across India’s vast pharmacy network remains a major challenge.
The court also cited pending recoveries of ₹8,700 crore against pharmaceutical firms. These relate to amounts allegedly overcharged to consumers. The report does not say how much is disputed or under litigation. Demands are not the same as proven violations. Still, delayed recoveries raise questions about enforcement and accountability.
Additional Solicitor General Aishwarya Bhati presented the government’s position. She said policy does not favour bringing the entire ecosystem under regulatory control. She argued India already has some of the world’s lowest medicine prices. The Centre keeps calibrating drug prices to address gaps, she added. The bench responded that this calibration was too erratic.
Medicine costs matter deeply in a country where households pay much healthcare out of pocket. Affordability also depends on generic competition, public procurement and insurance coverage. Yet heavy controls could hurt supply, competition and manufacturing viability. The challenge is protecting patients while keeping the industry sustainable. The court’s final verdict will shape how that balance is struck.
