'Blatant daylight dacoity': SC questions 10-fold price gap in cancer drug, asks authorities why they failed to act

The Supreme Court on Tuesday questioned the disparity in drug pricing with essential cancer drugs sold to consumers at a whopping ₹27,000 when the price at which it is sold to retailers is only ₹2,700, observing that this amounts to “broad daylight dacoity” and asked the government authorities why they fail to act on this crucial issue.

Dealing with a petition related to drug pricing and price regulation of generic medicines, the court said that it is aware of the practical problems faced by citizens who are forced to sell their houses, ornaments, etc to afford treatment and buy medicines as it raised concerns over the issue and posted the matter for September 29 to continue hearing the Centre and pharmaceutical manufacturers on the issue.

A bench of justices Vikram Nath and Sandeep Mehta said, “We wonder how a patient can be cheated for an essential cancer drug. We know of a cancer drug which the manufacturer sells at a price to retailers (PTR) of ₹2,700 which is then sold in the market for ₹27,000. This is blatant broad daylight dacoity, an absolute rampage and carnage they are doing to the patients.”

Questioning the role of the National Pharmaceutical Pricing Authority (NPPA) and the Department of Pharmaceuticals in this regard, the bench further observed, “It is surprising that the authorities supposed to take a decision on this are completely silent. If this is not extortion then what is it? A medicine sold to retailers at 10% of MRP, why this disparity, is what we are asking?”

The court was hearing petitions filed by advocate Kishan Chand Jain and Sanjay Kulshresthra, a doctor by profession, who sought intervention of the court in regulating prices of drugs, equipment and generic medicines to make it affordable to common citizens.

“We know how people sell their homes, and their ornaments to get medicines..how many times will a patient go to a medical store and ask for the list of prices. He will take it at whatever price it is being offered. We are only questioning why there should be so much disparity,” the court remarked.

The Centre represented by additional solicitor general (ASG) KM Nataraj said that the government does not treat these proceedings “adversarially” and would welcome any suggestions from the court.

Even the association of pharma manufacturers, represented by senior advocate Kapil Sibal said that it is the retailers who are earning profit and not the makers of the drugs. But the petitioners told the court that the manufacturers are part of the entire conspiracy as they should not be fixing MRP at such exorbitant rates.

Kulshresthra pointed out that the Drug Pricing Control Order allows the government to fix the retail ceiling price of any drug for such a period as is considered necessary. He said that the highest price disparity is seen with regard to antibiotics, giving the example of an antibiotic TG-BEX priced in the open market for ₹4,196 which is available to retailers at ₹980. He further pointed out that drugs purchased from hospitals can be more expensive as hospitals are no less than hotels.

The bench said, “Many patients are getting treatment under the Ayushman Bharat scheme. Ultimately, it is the taxpayer’s money which goes into paying these bills. The hospital gets the reimbursement as it is the government which is paying. This is a clear cut case of fraud.”

Jain told the court that the restriction under the drug pricing regulatory regime allows manufacturers to increase the price by 10% every year. But this covers scheduled drugs and around 82% medicines fall outside this regime. Out of the 60,000 brands in the market, he said that the price-fixation mechanism covers less than 5,000 brands. He challenged the basis for distinguishing a scheduled and a non-scheduled drug when medicines are considered essential commodities.

The Centre told the court that the mechanisms are already in place as ASG Nataraj said he will make his submissions in this regard on the next date.