The Loophole That Lets an MRP Be Whatever a Manufacturer Wants
Last week, Maharashtra's FDA ran a routine survey of hospital consumables. What it found was not routine. An IV infusion set purchased by a private hospital for ₹11.05 carried a printed MRP of ₹325 — a markup of about 2,841 per cent. A syringe bought for ₹6.75 had an MRP of ₹57.20; a catheter procured for ₹29.41 carried an MRP of ₹310.
Then, on 22 September, the Supreme Court stepped into the same fire — this time over cancer drugs. A bench was told that essential cancer medicines carry an MRP of ₹27,000 against a price to retailer of ₹2,700. "That's broad daylight dacoity with the patients," Justice Mehta remarked, questioning how such pricing could be permitted for essential medicines. The bench also noted that when patients are treated under Ayushman Bharat, these inflated prices are reimbursed by the government — taxpayer money — calling it "a clear-cut case of fraud."
Two Classes of Drugs, One Broken Outcome
India's pricing framework under the Drugs (Prices Control) Order, 2013 draws a hard line between two worlds. The NPPA fixes ceiling prices for drugs listed in Schedule I of the DPCO, 2013, and manufacturers of these scheduled medicines must sell within that ceiling. That covers drugs on the National List of Essential Medicines.
Everything else — the majority of the market — operates differently. For non-scheduled formulations, a manufacturer is at liberty to fix the MRP entirely on its own; the only restriction is that it cannot raise that MRP by more than 10 per cent in any 12-month period. In other words, if a manufacturer sets the opening price at ₹27,000, regulation only governs how fast that number can grow — not whether it was reasonable to begin with.
A parliamentary committee has noted that roughly 82 per cent of India's pharmaceutical market by value is non-scheduled, with prices set by manufacturers and the NPPA limited to monitoring rather than fixing them. Cancer drugs, many of which are non-scheduled, sit squarely in this uncontrolled zone.
The NPPA Has a Tool — It Just Rarely Uses It
The regulator is not completely powerless. The NPPA can invoke extraordinary powers under Para 19 of the DPCO, 2013, which allows the government to fix the ceiling or retail price of any drug — scheduled or non-scheduled — for any period it deems fit. It has done this before: a 30 per cent trade-margin cap on 42 non-scheduled anti-cancer medicines reduced the MRP of 526 brands by an average of around 50 per cent, saving patients an estimated ₹984 crore annually.
That intervention proved the tool works. The question is why it remains the exception rather than the rule.
A parliamentary committee has pushed for a permanent Trade Margin Rationalisation framework written into the DPCO itself, rather than the ad hoc, case-by-case interventions used so far. After the Maharashtra findings, the Centre has started discussions with the medical sector and private hospitals on trade margin rationalisation for medical devices, following a directive by Union Health Minister JP Nadda after a key meeting with the Secretary of the Department of Pharmaceuticals.
What a Patient Can Actually Do Right Now
The Maharashtra FDA lacks the legal authority to penalise hospitals or manufacturers for high prices as long as items are sold at or below the printed MRP — regulatory enforcement is restricted to cases where products are sold above it. That is a sobering fact for anyone sitting in a hospital bed.
Until the law changes, patients have a few levers. Ask for an itemised bill and cross-check drug names on the NPPA website (nppaindia.nic.in), where ceiling prices for scheduled drugs are publicly listed. For non-scheduled drugs, the MRP on the pack is the legal ceiling — no hospital can charge above it. And if the drug is covered under a government scheme, the reimbursement price is a useful reference for whether the MRP itself is inflated.
The Supreme Court has posted the matter for further hearing on September 29 — a deadline that, for once, the pharmaceutical lobby cannot ignore.
Sources
- ₹11 Product Sold For ₹325: Maharashtra FDA Flags Huge Hospital Pricing Gaps - Goemkarponn - Goa News
- Unlimited MRP: SC Terms Exorbitant Rates Of Cancer Drugs As ‘Daylight Dacoity’
- SC slams ‘broad daylight dacoity’ in cancer drug pricing, questions huge gap between PTR and MRP
- 'Broad daylight dacoity': SC questions authorities’ silence on overpricing of essential cancer drugs - The Tribune
- The National Pharmaceutical Pricing Authority fixes ceiling prices in respect of the drugs specified in Schedule-I to Drugs (Prices Control) Order, 2013
- Health panel's 20 percent device margin cap faces limits - Medical Buyer
- Trade Margin Cap on Anti-Cancer Drugs | GS III | G.S III - Economy | Current Affairs
- Centre calls for review of Hospital Consumable Prices after Maharashtra FDA Commissioner flags MRP gaps: Sources
- Tukaram Mundhe Exposes Hospital Consumable MRP Markups - Newsy Today
- ‘Broad daylight dacoity’: SC flags 10-fold gap in cancer medicine pricing - english.punjabkesari.com