Last Updated on December 1, 2025 10:01 pm by BIZNAMA NEWS
R. Suryamurthy
A parliamentary panel has delivered one of the strongest indictments yet of India’s medicine pricing system, warning that vast and opaque mark-ups across thousands of widely used drugs are allowing “unjustified profiteering at the expense of ordinary patients.”
The Standing Committee on Chemicals and Fertilizers, in its Fourteenth Report tabled this month, said medicine prices in India were being shaped not by cost or competition, but by regulatory blind spots that allow trade margins to balloon to 600%–1,800% on routine drugs, even as the country positions itself as the “pharmacy of the world.”
The 300-page report, based on hearings with the Department of Pharmaceuticals (DoP) and National Pharmaceutical Pricing Authority (NPPA), paints a picture of a pricing regime where non-scheduled drugs—covering the overwhelming majority of formulations—face virtually no control at the point where it matters most: the initial MRP.
Margins That “Defy Logic”
The Committee reviewed price lists of leading pharmaceutical companies and found extreme gaps between Price-to-Stockist (PTS) and printed Maximum Retail Price (MRP)—a difference it said could not be explained by distribution costs, marketing expenses, or inventory risks.
Examples cited include:
• Cetirizine 10 mg tablets: MRP ₹21 vs. PTS ₹1.85 — 1,038% margin
• Esomeprazole 40 mg: MRP ₹170 vs. PTS ₹13.95 — 1,119% margin
• Calcium supplements: MRP ₹327 vs. PTS ₹16.95 — 1,831% margin
• Atenolol + Amlodipine (hypertension drug): MRP ₹72.6 vs. PTS ₹9.6 — 656% margin
For some best-selling chronic therapies, especially anti-allergy, acidity, vitamin supplements and cough syrups, the mark-ups “approached levels that were simply indefensible,” the panel said.
Even more alarming are oncology drugs. One anti-cancer formulation, Peg L-Asparaginase, carried an MRP of ₹38,215 but was being sold on an online platform for ₹9,200, implying that the “real trade price could be dramatically lower.” Another cancer drug listed at ₹45,000 was retailing at ₹8,800.
“These are not cosmetic mark-ups,” a member of the Committee said during the hearing. “They determine whether a patient lives or dies.”
A Regulation Designed to Look Away
At the heart of the problem, the report says, lies the Drugs (Prices Control) Order 2013 (DPCO)—a framework that leaves more than 85% of the market outside strict price control.
• Scheduled drugs (based on the National List of Essential Medicines) have ceiling prices fixed by NPPA.
• Non-scheduled drugs, which include thousands of branded generics, are free to set initial MRPs, subject only to a 10% annual cap on increases.
This means companies can legally launch a drug at ₹4000, even if it costs ₹400 to make and distribute, and stay fully compliant with the law as long as the price doesn’t rise by more than 10% each year.
The Committee said this renders the MRP cap meaningless: “What is the point of limiting the increase if the starting price itself is arbitrary?”
The Department of Pharmaceuticals argued that India’s prices are among the lowest globally, and that competition keeps overpricing in check. But the Committee rejected this as “unsatisfactory and out of touch with market realities.”
The NPPA, too, conceded that it had no legal authority to regulate margins on non-scheduled drugs or to access cost data from companies.
Trade Margin Rationalisation: Stuck in Limbo
The one policy tool that could curb runaway margins—Trade Margin Rationalisation (TMR)—has been hanging in the balance for nearly five years.
During the pandemic, TMR was temporarily imposed on 42 high-price cancer medicines, cutting MRPs by an average 50%. Another six medical devices—including oximeters, BP monitors and glucometers—were similarly capped, saving consumers around ₹1,000 crore annually.
But these measures used emergency powers, valid only for limited periods. A permanent mechanism requires amending the DPCO, something the government has been “examining since 2019.”
The Committee was blunt: “A delay of this nature is unjustifiable. While the government deliberates, patients continue to pay exorbitant prices.”
Why Jan Aushadhi Prices Can’t Be Replicated—And Why That’s a Problem
MPs repeatedly asked why private manufacturers could not supply medicines at rates similar to Pradhan Mantri Jan Aushadhi Kendras, where generics are 50–80% cheaper.
The DoP said Jan Aushadhi medicines are centrally procured, bypassing the traditional wholesale chain and benefiting from scale, eliminating marketing expenses and standard retail margins.
But the Committee dismissed this as an excuse: if Jan Aushadhi can deliver medicines at a fraction of the price, the market should not be allowed to operate unchecked with triple- and quadruple-digit mark-ups.
Stents: A Rare Success, But Prices Rising Again
The Committee praised NPPA for slashing coronary stent prices in 2017—bare metal stents down to ₹7,260 and drug-eluting stents to ₹29,600—a move that saved patients an estimated ₹11,600 crore per year.
But even these regulated prices have since increased:
• Bare metal stents: Now ₹10,509, up 44%
• Drug-eluting stents: Now ₹38,267, up 29%
Given hospital mark-ups, GST and ancillary charges, heart patients still face significant financial burden. The panel urged NPPA to intensify monitoring to prevent hospitals from charging above ceiling prices.
Opaque Online Market Adds Risk
The report also raised alarm over online discount platforms offering cancer drugs at deep cuts—sometimes 70–80% below MRP.
Industry body IPA told the Committee that many pharmaceutical companies do not supply to such platforms and cannot verify the authenticity of their stock. This, the Committee warned, opens a dangerous vacuum of oversight—both on patient safety and on pricing manipulation.
Call for Major Policy Overhaul
The Committee has recommended sweeping changes:
• Grant NPPA full authority to regulate trade margins for both scheduled and non-scheduled drugs.
• Mandate disclosure of PTS, PTR and margin data for every medicine sold in India.
• Create a legal provision to audit drug costs, especially for oncology products.
• Establish a national framework to regulate online drug sales, including real-time price monitoring.
• Accelerate the long-pending update of the Pharmaceutical Policy.
The Committee concluded with unusually sharp language:
“Without urgent reform, India will continue to operate a pricing regime that enables profiteering, compromises affordability and erodes public trust in the pharmaceutical sector.”
For millions of households that routinely spend up to 60% of their health expenditure on medicines, the stakes could hardly be higher.