SC Questions Central Government On Drug Pricing

In a much-needed focus on the severe asymmetry faced by patients over drug pricing, the Supreme Court has directed sharp queries at the Union of India on why there is a shocking mark-up in prices at the retail level, to the detriment of citizens.

Although the court took up specific instances related to cancer drugs in cases filed by Kishan Chand Jain and Dr Sanjay Kulshreshtha, it became evident during the proceedings that the government had chosen to ignore routine usurious pricing and price control for drugs not being included in the schedule of the Drugs and Cosmetics Act.

It also failed to treat medicines as essential commodities under law. Such policy failure has resulted in a cancer drug, priced at Rs 2,700, being sold in retail at Rs 27,000, a phenomenon that the court correctly characterised as extortion.

The Bench further referred to people being forced to sell houses and ornaments to buy medicines, a far cry from the rosy picture painted by governments of free insurance and care. It is shocking that the schedule of medicines under price control covers just 18% of the brands sold and, viewed in terms of value, 17%.

Publicly advertised appeals for crowdfunding for cancer treatments in one South Indian city show three types of malignancies require Rs 7 lakh, Rs 16 lakh, and Rs 8 lakh, indicating the staggering pressures cast on citizens.

It is no surprise, therefore, that out-of-pocket expenditure on healthcare in India remains among the highest, at about 43%, as per the latest National Health Accounts estimates; on the other hand, the provision of cheaper medicines through Jan Aushadi Kendras and generics, a contributor to lower costs, does not guarantee efficacy due to quality problems. The issue of drug quality, too, has now been placed before the Supreme Court.

Need For Drug Price Reform

Unconscionable drug price mark-ups are costing both self-paying patients and those insured under various schemes, because private hospitals charge them at the maximum rates, and both governments and insurers pay.

Retail discounts available in the neighbourhood pharmacy on branded drugs are denied to hospital patients, thus inflating the bill in terms of premiums for all those privately insured and draining tax funds through government payouts.

A review of the drug price control regime is overdue to stop such pernicious practices, beginning with prices charged for standard drugs in hospitals.

A national common procurement programme on the lines of Tamil Nadu’s Medical Services Corporation could be one way to address the crisis. All life-saving drugs must come under price control, with a transparent formula to fix the maximum retail price.

The unsavoury record of India’s drug testing apparatus at the Union and state levels, which refuses to disclose results of individual checks and ignores generics quality, needs urgent reform too.

To start with, the National Pharmaceutical Pricing Authority should be mandated to regularly publish the price-to-retailer that manufacturers submit on its portal to help compare with the MRP.

Published on: Wednesday, September 23, 2026, 08:45 PM IST