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Relevance: GS-II (Health & Governance) | Source: The Hindu
The News: The Supreme Court has strongly criticized the massive price gap between what pharmacies pay for essential drugs and what patients are charged at the counter. Pointing to cancer medications, the Court questioned why strict price caps aren’t applied to stop unfair profits.
1. The Shocking Price Gap
Recent court hearings highlighted how broken drug pricing can be for patients fighting severe illnesses.
- The 10-Fold Markup: Judges pointed out an essential cancer drug bought by retailers for roughly ₹3,000 is sold to patients for a staggering ₹27,000.
- Confusing Rules: The current system creates strange contradictions where some controlled combination medicines cost much less than uncontrolled single-ingredient drugs, exposing gaps in government regulations.
2. The Role of Private Hospitals
- Forced Pharmacy Purchases: Private hospitals often force admitted patients to buy medicines exclusively from their in-house hospital pharmacies, blocking them from buying the exact same drugs cheaper elsewhere.
- Who Profits? The government noted that manufacturing companies aren’t the only ones cashing in; private hospitals are major beneficiaries of the massive gap between wholesale and retail prices.
Practice MCQ
Q. Consider the following statements regarding drug price regulation in India:
- The National Pharmaceutical Pricing Authority (NPPA) is responsible for fixing and monitoring the ceiling prices of scheduled essential medicines.
- All non-scheduled pharmaceutical drugs in India are currently subjected to strict, mandatory retail ceiling price caps by the central government.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
Answer: (a) 1 only
Hint: Statement 1 is correct; the NPPA enforces price controls on essential drugs. Statement 2 is incorrect because non-scheduled drugs do not have strict ceiling price caps; they only face percentage-based annual price hike limits, creating loopholes for high markups.
Hint: Statement 1 is correct; the NPPA enforces price controls on essential drugs. Statement 2 is incorrect because non-scheduled drugs do not have strict ceiling price caps; they only face percentage-based annual price hike limits, creating loopholes for high markups.
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