SC Slams Hospital Mark-Ups as ‘Loot’ and ‘Dacoity’ After ₹11,000 Cancer Drug Costs ₹1.3 Lakh in Hospital Bill

Summary:
India’s Supreme Court has criticised excessive mark-ups by private hospitals on cancer medicines, citing an example of a chemotherapy injection costing ₹11,000 but being billed at ₹1.3 lakh. Hearing a petition seeking mandatory generic prescriptions, tighter medicine price controls and limits on medical device margins, the court questioned the effectiveness of existing regulations. The Centre said trade margins on 137 anti-cancer medicines had been capped at 30% of their maximum retail price, potentially saving patients ₹2,500 crore annually. The court has reserved its judgment, which could influence future regulations on medicine pricing and hospital charges. 

The Supreme Court of India has criticised the substantial mark-ups imposed by private hospitals on cancer medicines, describing excessive charges as “loot” and “dacoity” while examining whether stricter regulations are required to safeguard patients.

During a hearing on October 27, a bench comprising Justices Vikram Nath and Sandeep Mehta reserved its judgment on petitions calling for tighter controls over medicine prices.

The court drew attention to the financial hardships experienced by patients requiring life-saving care, particularly those undergoing cancer treatment. It also questioned whether the existing government pricing framework adequately shields patients from excessive healthcare expenses.

Cancer Injection Available for ₹11,000 but Charged at ₹1.3 Lakh

The court was hearing a public interest litigation (PIL) filed by advocate Kishan Chand Jain. The petition seeks mandatory prescriptions for generic medicines, stricter controls on the initial prices of non-scheduled drugs, and legally mandated limits on trade margins for medical devices under the Drug Price Control Order (DPCO).

One instance highlighted during the proceedings involved a medicine distributor whose wife was receiving cancer treatment at a leading private hospital.

According to the account presented before the court, the distributor offered to supply a chemotherapy injection at his dealer price of ₹11,000. However, the hospital reportedly charged ₹1.3 lakh for the same medicine.

“Can you show any justification for this loot, please? Why this difference? Where does the money go?” the bench asked.

The judges also raised concerns about the prices charged for commonly used hospital supplies. A saline drip line reportedly costing ₹15 was allegedly being billed to patients at ₹250.

These examples prompted questions about the transparency of medicine procurement costs, manufacturer discounts, hospital operating expenses and the amounts ultimately charged to patients.

The court also examined the Centre’s recent decision to limit trade margins on anti-cancer medicines to 30%, while noting that nearly 90% of medicines available in the market remain outside the scope of the Drug Price Control Order.

“Why is the DPCO in place at all? The government is allowing this to happen. There have been three parliamentary committees on this. And their outcome is not very convenient to people who pull the strings, let us tell you,” the bench remarked.

Medicine Price Restrictions Under Examination

India regulates the prices of scheduled medicines through the Drugs (Prices Control) Order, 2013. The government has additionally imposed trade margin restrictions on certain anti-cancer medicines.

During the hearing, the Centre informed the court that trade margins on 137 anti-cancer medicines had been restricted to 30% of their maximum retail price (MRP). The measure is estimated to save patients approximately ₹2,500 crore annually.

The court questioned why these restrictions applied to only a limited number of medicines and whether broader, more comprehensive regulations were necessary.

The petitions call for several measures, including compulsory generic prescriptions, restrictions on the initial pricing of non-scheduled medicines, and caps on trade margins for medical devices.

Hospitals and Government Present Their Arguments

Appearing on behalf of private hospitals, senior advocate Mukul Rohatgi argued that healthcare facilities must maintain infrastructure and services around the clock while meeting substantial operational expenses. He also expressed concerns about patients purchasing medicines from external sources, citing the potential risk of counterfeit products.

The Centre argued that pharmaceutical pricing policies must strike a balance between affordability, investment, market competition and the long-term viability of the pharmaceutical industry.

Additional Solicitor General Aishwarya Bhati informed the court that the government continued to assess its existing regulations. However, the bench questioned whether these considerations adequately accounted for patients’ limited ability to negotiate prices when seeking life-saving treatment.

“Your calibration is too wayward. ₹11,000 to ₹1,30,000 is no calibration. When you talk of patients and life, should we have such capitalistic thinking. Hospitals can survive through other means. Not through this dacoity,” the bench remarked, according to reports of the proceedings.

The Supreme Court has reserved its judgment in the matter. No new price restrictions should be presumed until the court delivers its order. The eventual ruling could have implications for the future regulation of medicine prices and mark-ups charged by hospitals.