New Delhi: The government has admitted before the Supreme Court the "malpractice" of hospitals charging patients high maximum retail prices for medicines and consumables, and said it is examining the problem and devising interventions in consultation with industry and patient groups.
In an affidavit filed on the issue of capping prices of all medicines and medical consumables, the chemicals and fertilisers ministry said patients have a very low bargaining position with respect to hospitals. It noted the irony of India being home to companies making cheap drugs while patients here pay well above the manufacturing price, and are also subjected to overcharging by hospitals.
"The Indian drug market is fairly competitive... Ordinarily, where there is substantial competition, there is no need to regulate prices. However, by their very nature, health treatment and pharmaceutical products involve information and bargaining asymmetries," the affidavit said. It added that a patient's knowledge of drugs, substitutes and prices is limited, which leads to malpractices despite competition among manufacturers.
The government said ceiling prices have been fixed for 935 scheduled formulations, and retail prices for 3,881 new drugs. The affidavit said the government is conscious of the problem and examining appropriate interventions.
The affidavit was filed on a plea by Dr Sanjay Kulshrestha, who cited a Niti Aayog report and a 2020 statement of the then health minister, Harsh Vardhan, that health expenditure pushed an estimated six crore families below the poverty line each year. The government's response acknowledged that such asymmetries require regulation. The court is weighing whether to cap prices across all medicines and consumables.