Supreme Court Flags Exorbitant Drug Pricing Disparities

Gist The Supreme Court has heavily criticized the massive disparity—reaching up to 1,000% —between the Price to Retailer PTR and the Maximum Retail Price MRP of critical medications, particularly cancer drugs. This gap exists because pharmaceutical companies incentivize hospitals to stock their brands by keeping the MRP artificially high while offering the hospital steep wholesale discounts. This profiteering exposes a severe regulatory loophole in India's drug pricing mechanisms, resulting in financial toxicity for patients and effectively neutralizing natural market competition. Background The National Pharmaceutical Pricing Authority NPPA regulates drug prices in India under the mandate of the Drug Prices Control Order, 2013 . The DPCO, 2013 imposes a price ceiling on the final MRP of "scheduled drugs" by calculating a market-derived average price, but it completely fails to regulate the trade margin the markup that hospitals earn on these transactions. Because the markup is unregulated, if the NPPA sets a drug's ceiling price at ₹116 , a hospital can negotiate a wholesale purchase price PTR of ₹50 from the manufacturer, legally bill the patient the full ₹116 , and pocket…