The Supreme Court has expressed serious concern over the commercialization of healthcare, observing that corporate hospitals are increasingly functioning like profit-driven industries rather than service providers. The Court particularly questioned the practice of private hospitals requiring patients to purchase medicines from their own pharmacies at substantially inflated prices.
A Bench comprising Justice Vikram Nath and Justice Sandeep Mehta raised these concerns while hearing a petition concerning the pricing and availability of medicines, including the regulation of prices of non-scheduled drugs and medical devices.
Court Questions In-House Pharmacy Practice
The Supreme Court noted that patients admitted to corporate hospitals are sometimes required to purchase medicines exclusively from the hospital’s in-house pharmacy. The Court observed that when patients bring medicines purchased from outside, hospitals may refuse to assure continued treatment.
The Bench questioned the fairness of such a practice, particularly when the medicines are being purchased for patients covered under government-sponsored healthcare schemes.
The Court pointed out that where the government reimburses the cost of medicines based on inflated prices, the ultimate financial burden is effectively borne by taxpayers.
₹2,700 Drug With ₹27,000 MRP
The Court’s observations followed its earlier concern regarding a cancer medicine where the Price to Retailer (PTR) was around ₹2,700, while its Maximum Retail Price (MRP) was ₹27,000.
The Bench questioned how such a substantial difference could be justified and raised concerns about the absence of effective limits on the margins charged on certain medicines.
The Court also questioned why different pricing rules apply to scheduled and non-scheduled medicines and asked whether a uniform margin cap could be considered for pharmaceutical products.
Taxpayers Bear The Burden Under Government Schemes
The Supreme Court specifically examined the consequences of inflated medicine prices in government healthcare schemes.
The Bench observed that if a corporate hospital charges an inflated MRP and the government reimburses the amount under a welfare scheme, the additional cost ultimately comes from public funds.
The Court questioned why patients and taxpayers should bear the burden of such pricing practices when the actual cost of the medicine may be substantially lower.
The Court also highlighted the impact of excessive price differences on consumer confidence. It noted that if a medicine carrying an MRP of ₹27,000 is offered by another chemist for around ₹3,000, patients may suspect that the medicine is counterfeit or spurious.
Government Seeks Time To Find A Solution
Solicitor General Tushar Mehta, appearing for the Central Government, acknowledged the concerns raised by the Court.
He submitted that the Government would need to find a balanced approach and sought some additional time to consult the concerned departments and officials before responding to the issues raised by the Bench.
The Court accordingly granted the Government further time for inter-departmental consultations.
Petition Seeks Regulation Of Drug Prices
The proceedings arise from a petition filed by Kishan Chand Jain, which seeks measures including mandatory prescription of generic medicines, stronger price controls on non-scheduled medicines and regulation of the maximum retail prices of medical devices.
The case has brought broader questions concerning pharmaceutical pricing, hospital pharmacy practices and the financial burden on patients under government healthcare schemes before the Supreme Court.
Supreme Court Seeks Uniform Approach
The Bench questioned the rationale behind maintaining different pricing mechanisms for essential and non-essential medicines and asked whether a common margin framework could be considered.
The Court’s observations indicate its concern that the regulatory framework should prevent excessive mark-ups while also ensuring that medicines remain available to patients at reasonable prices.
At the same time, the Court has sought the Government’s response before taking the matter further.
Further Hearing
The Supreme Court has listed the matter for further hearing on 12 October 2026, after granting the Central Government additional time to consult the concerned authorities.
The proceedings could have wider implications for the regulation of medicine prices, private hospital pharmacy practices and reimbursement under government-sponsored healthcare schemes.
