Who pays? Taxpayer: SC questions inflated medicine prices at private hospitals

The Supreme Court questioned steep medicine mark-ups at corporate hospitals and their insistence on in-house pharmacies. It said the burden of inflated pricing falls on patients and taxpayers, especially under government schemes.

In Short

• Bench said admitted patients are often pushed to buy in-house medicines
• Judges cited a cancer drug priced at Rs 2,700 for retailers
• Court said public reimbursements mean taxpayers absorb inflated treatment-related medicine costs

The Supreme Court on Tuesday questioned the high prices of medicines at corporate hospitals, saying private healthcare providers appear to be functioning like profit-driven industries rather than service providers, Bar & Bench reported.

A bench of Justices Vikram Nath and Sandeep Mehta made the observations while hearing a petition on medicine pricing, and questioned why patients are often forced to buy medicines from hospital pharmacies at inflated prices.

The court pointed out that patients admitted to corporate hospitals are sometimes told to purchase medicines only from the hospital’s in-house pharmacy. Those who bring medicines bought elsewhere are allegedly not assured treatment by the hospital.

COURT FLAGS 10-TIMES PRICE DIFFERENCE

The hearing followed the court’s observations last week over a cancer drug whose price to retailers was around Rs 2,700, while its maximum retail price was Rs 27,000.

On Tuesday, the bench again highlighted the huge difference, particularly when patients are covered under government healthcare schemes.

The court said that if a patient under a government scheme is made to pay the inflated price, the taxpayer ultimately bears the cost because the hospital receives reimbursement from public funds.

“Corporate hospital says you have to buy from our chemist. If you bring it from outside, we are not assuring treatment. If that patient is taking treatment under a government scheme, who reimburses? The taxpayer pays,” the Bench said.

GOVERNMENT SEEKS TIME TO FIND SOLUTION

Solicitor General Tushar Mehta, appearing for the Centre, acknowledged the issue and said the government would need to find a balance between the different concerns. He sought a short adjournment to discuss the matter with government officials and formulate a response.

The Bench also questioned why there is a difference in the rules governing essential and non-essential medicines and asked whether a uniform 16 per cent margin could be applied to all medicines.

COURT RAISES CONCERN OVER PATIENT TRUST

The Court also pointed to another problem caused by inflated maximum retail prices: patients may become suspicious even when a genuine chemist offers the same medicine at a much lower price.

The Bench gave the example of a medicine carrying an MRP of Rs 27,000 being sold by a chemist for Rs 3,000. It said a patient could suspect that the cheaper medicine was fake or spurious.

The Court also questioned where the large difference between the manufacturing or retailer price and the MRP ultimately goes.

The Solicitor General said pharmaceutical manufacturers are not always the main beneficiaries of such price differences and that private hospitals may absorb a substantial part of the margins.

The Bench, however, said the financial burden ultimately falls on patients and taxpayers. “Corporate hospitals are industries. It is not a service at all. Why should common man suffer all this,” the Court said.

CASE SEEKS TIGHTER PRICE CONTROLS

The Court was hearing a petition filed by Kishan Chand Jain seeking mandatory prescriptions of generic medicines, tighter price controls on medicines not covered under existing price regulations, and caps on the maximum retail prices of medical devices.

The Court granted the Centre more time to hold consultations between different departments on the issues raised during the hearing. The matter will be heard next on October 12.

- Ends