Bitter pill ‘Flawed’ drug policy lets pharma firms reap huge profits

The alleged weaknesses in India’s drug policy have enabled pharmaceutical manufacturers to set excessively high maximum retail price (MRP) on medicines. With no strict regulations from the Central or state governments, drug manufacturers are reaping huge profits at the expense of consumers. Every third Indian relies on daily medication, making this issue a significant public concern.

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Investigations by The Tribune reveal that the difference between the cost price (CP) and MRP of medicines ranges from 100 per cent to a staggering 800 per cent. Some life-saving drugs, including injections for heart attack patients, have profit margins as high as 1,200 per cent. Many antibiotic injections carry margins of 900 per cent, and a widely used medical termination of pregnancy (MTP) kit priced at Rs 800 has a cost price of just Rs 90. Such inflated pricing on hundreds of essential medicines is a clear case of consumer exploitation.

Despite the Essential Commodities Price Control Act being in force in various states, no action has been taken against the pharmaceutical companies violating fair pricing norms. The Union Government has repeatedly assured consumers of a revised drug policy to regulate profit margins for retailers and wholesalers, but no concrete steps have been implemented.

Many consumers believe that reputed pharmaceutical companies maintain a fair profit margin of 10–30 per cent. However, wholesale price lists reveal that even these companies allow retailers profits between 100 per cent and 300 per cent. The lack of oversight and enforcement allows manufacturers to set MRPs arbitrarily, pushing medicine prices far beyond their actual cost.

While state governments do not have direct control over MRP determination, they do have the authority under the Essential Commodities Act to act against retailers and wholesalers charging excessive profit margins. However, the absence of strict enforcement enables unchecked profiteering in the pharmaceutical sector.

To safeguard consumer rights, the government must implement stringent drug pricing regulations, monitor the profit margins of manufacturers and retailers, and take strict action against violators. The unchecked pricing system continues to burden common people, making essential medicines unaffordable for many.