The Supreme Court has expressed serious concern over the wide difference between the Price to Retailer (PTR) and the Maximum Retail Price (MRP) of essential medicines, particularly cancer drugs.
A Bench of Justice Vikram Nath and Justice Sandeep Mehta questioned how a cancer medicine supplied to a retailer for around ₹2,700 could carry an MRP of ₹27,000, describing the ten-fold difference in strong terms and questioning the effectiveness of the existing regulatory framework.
Background Of The Case
The observations were made while the Supreme Court was hearing public interest petitions concerning regulation of medicine prices, generic medicines, medical devices and prescription practices.
One of the petitions was filed by Kishan Chand Jain, who argued that the existing price-control mechanism does not adequately regulate the initial prices fixed for medicines that fall outside the scheduled category under the Drugs (Prices Control) Order, 2013 (DPCO).
According to the submissions before the Court, a large proportion of medicines are classified as non-scheduled medicines and manufacturers can initially determine their prices without the same ceiling-price mechanism applicable to scheduled medicines.
Supreme Court Questions Ten-Fold Price Difference
The Bench was particularly concerned by the example of a cancer medicine where the PTR was ₹2,700 while the MRP was ₹27,000.
Justice Sandeep Mehta questioned why there should be such a substantial difference between the price at which a medicine is supplied to retailers and the MRP printed on the product.
The Court questioned why a manufacturer should be permitted to fix an MRP substantially higher than the price at which the medicine is actually supplied to the retailer.
Impact On Patients
The Court also considered the consequences of high medicine prices for patients undergoing treatment for serious illnesses.
During the hearing, the Bench noted that patients may have to bear substantial financial burdens to obtain essential medicines. The Court also referred to situations where families may be required to spend significant portions of their savings or assets on medical treatment.
The concern becomes particularly significant where medicines are required regularly over a prolonged period.
Concern Over Government-Funded Healthcare
The Supreme Court further examined the effect of inflated medicine prices on government-funded healthcare schemes, including Ayushman Bharat.
The Bench observed that where hospitals purchase medicines at higher prices and subsequently receive reimbursement under government schemes, the financial burden ultimately falls on public funds.
The Court therefore linked the issue of medicine pricing not only to individual patients but also to the proper use of taxpayer-funded healthcare resources.
Issue Of Non-Scheduled Medicines
The petitioners submitted that the DPCO’s price-control mechanism primarily applies to medicines included in its scheduled list.
The Court was informed that manufacturers of non-scheduled medicines are not subject to the same initial price-fixation mechanism. The submissions before the Court also highlighted the large number of medicines and brands available outside the scheduled category.
The petitioners argued that this regulatory gap can result in substantial differences between PTR and MRP. These were submissions made by the petitioners and remain part of the issues being examined by the Court.
Court Examines Generic Medicines And Medical Devices
The proceedings also involved broader questions concerning generic medicines and medical devices.
One petitioner argued that generic prescribing could reduce treatment costs but submitted that concerns regarding the quality and reliability of generic medicines should also be addressed.
The Court also heard submissions concerning medical devices and the need for an effective mechanism to regulate their pricing.
The Union Government stated that it was approaching the proceedings constructively and was willing to consider improvements to the existing system. The Additional Solicitor General also referred to the Pradhan Mantri Bhartiya Janaushadhi Pariyojana as an initiative aimed at providing medicines at lower prices.
Pharmaceutical Industry’s Response
Senior Advocate Kapil Sibal, appearing for the Indian Pharmaceutical Alliance, submitted that manufacturers were not necessarily retaining the entire margin reflected in the final price paid by patients and pointed towards margins earned further down the distribution chain.
The Bench, however, questioned this position in the context of MRP because the MRP printed on the medicine is fixed by the manufacturer.
Supreme Court Seeks Further Submissions
The Supreme Court has not, at this stage, issued a final ruling on the legality of the pricing structure.
The matter has been listed for September 29, 2026, when the Court is expected to hear further submissions from the parties, including the Union Government and representatives of the pharmaceutical industry.
Significance Of The Proceedings
The hearing raises several important regulatory questions:
- Whether the initial pricing of non-scheduled medicines requires greater regulation.
- Whether there should be a more effective mechanism to address large differences between PTR and MRP.
- How medicine pricing affects patients requiring long-term treatment.
- Whether excessive medicine prices can increase the financial burden on government healthcare schemes.
- How generic medicines and medical devices should be regulated to improve affordability while addressing concerns regarding quality and safety.
Conclusion
The Supreme Court’s observations have brought renewed attention to the significant difference that can exist between the Price to Retailer and the MRP of essential medicines.
The Court is examining whether the existing regulatory framework adequately protects patients from excessive medicine costs while also ensuring that government-funded healthcare resources are used appropriately. The broader issues concerning medicine pricing, generic prescriptions and medical-device regulation will be considered further when the matter is taken up on September 29.
