Supreme Court Questions Centre Over Medicine Pricing, Calls NPPA ‘Totally Defunct’

The Supreme Court on Tuesday questioned the Centre over the wide gap between the maximum retail price (MRP) of medicines and the prices at which retailers purchase them, raising concerns about government oversight of drug pricing in India.

A bench of Justices Vikram Nath and Sandeep Mehta was hearing two petitions concerning medicine prices when it questioned whether the existing system was favouring pharmaceutical manufacturers at the expense of consumers, according to PTI.

“The government is allowing this to happen. It is under the government's own eyes that it is happening,” the bench told the Centre.

“Should it be allowed to run amok?” the judges asked, while questioning the effectiveness of the National Pharmaceutical Pricing Authority (NPPA), the body responsible for regulating drug prices. The bench described the authority as appearing to be a “totally defunct” organisation.

The court reserved its order in the matter.

Centre Says Medicine Prices Among Lowest Globally

Additional Solicitor General Aishwarya Bhati, appearing for the Centre, told the court that the government’s policy was “that the entire ecosystem is not to be controlled”.

Bhati argued that medicine prices in India were among the lowest in the world and said the government had to balance affordability with the availability of medicines and the broader interests of the pharmaceutical industry.

The bench’s observations came amid continuing scrutiny of medicine pricing and the margins charged across the pharmaceutical supply chain. The gap between retailers’ purchase prices and the MRP has raised questions about whether existing regulatory mechanisms adequately protect consumers from excessive markups.

The NPPA is responsible for implementing and enforcing drug price controls under the country’s pharmaceutical pricing framework. The court’s remarks put the authority’s effectiveness and the Centre’s oversight under renewed scrutiny.

Supreme Court Questions Why Trade Margins Cannot Be Capped For More Drugs

The latest hearing follows the Supreme Court’s observations on October 12, when it expressed dissatisfaction with the Centre’s response on capping trade margins for anti-cancer drugs at 30 per cent of their MRP.

The bench had said the government’s response was “hardly anything to be happy about” and questioned why similar limits could not be imposed on other medicines.

The Centre had earlier faced criticism from the court over steep markups on cancer drugs by hospitals. It subsequently informed the court that the decision to cap trade margins on anti-cancer medicines at 30 per cent of MRP was expected to save patients approximately ₹2,500 crore annually.

The proceedings have brought renewed attention to the balance between regulating medicine prices, ensuring access to affordable treatment and protecting the interests of pharmaceutical manufacturers and other stakeholders.

(With PTI Inputs)