Pricing “Carnage” in Lifesaving Drugs: The In-House Pharmacy Dilemma

It will not be a usual consumer good for a person undergoing chemotherapy, suffering from a serious infection or being admitted to intensive care. However, in India, the price of such medicine can drastically fluctuate depending on the place where a patient should purchase it.

This is the problem now facing the healthcare system of India: how does one ensure that when both the treatment and the pharmacy are controlled by a single hospital, the patient will not be subjected to inflated drug prices?

Such problem has recently become relevant because of the concerns voiced by the Supreme Court regarding the huge difference in prices at which essential medicines reach retailers and the cost charged to patients. At least, on September 29, 2026, the Supreme Court raised the question why essential medicines could not be limited to a mark-up of 16% and what are the consequences of excessive mark-ups.

Moreover, this is not just a theory. For instance, a cancer medicine that reportedly costs about ₹2,700 is sold for ₹27,000, while an antibiotic costing about ₹350 is charged at ₹5,635.

When the Hospital Becomes the Only Marketplace

The in-house pharmacy itself is not the problem. In fact, hospital pharmacies have a role to play. Emergency wards and intensive care units do not have the luxury of waiting for a relative to go scrounging around the neighborhood for a certain injection at 2 a.m. Hospitals need medicine on an immediate basis, in regulated storage and with pharmacists present.

The issue arises when convenience becomes compulsory.

As recently decided by the Competition Commission of India, it is this very question that has come under investigation. In this particular case, the Commission investigated whether private hospitals were compelling admitted patients to procure their medicines, medical equipment and supplies from the hospital pharmacy.

The difference between the two becomes significant.

When a patient arrives in an emergency ward, he or she is not shopping for options. When family members are witnessing a loved one receiving chemotherapy treatments, they are not in a position to negotiate the cost of each vial. Relatives of ICU patients are not in a situation to compare five different pharmacies.

The consumer logic, therefore, ceases to apply in the hospital context.

The MRP Problem

India already has the mechanism in place to control the prices of medicines. According to the Drugs (Prices Control) Order, 2013, the National Pharmaceutical Pricing Authority determines the ceiling price for drugs which have been put under the scheduled list. According to the government, by July 23, 2026, NPPA has determined the ceiling prices for 935 scheduled formulations. In case of non-scheduled formulations, the manufacturer cannot raise the MRP by over 10% over the preceding 12 months.

But having an MRP mechanism does not solve the problem of what the hospitals must charge.

This has to do with the vast difference between procurement cost, printed MRP and final hospital bill.

Recent information from the state of Maharashtra has shed light on this problem. Reports based on investigations by the state FDA have shown very high variations between procurement costs of medicines and the prices that hospitals charge their patients. It was reported that one paracetamol drip procured at about ₹33 was billed at ₹408 whereas an antibiotic injection procured at ₹180 was billed at ₹950.

Similar reports were published highlighting very high variation in hospital consumables.

Why Hospitals Say the Story Is More Complicated

It cannot be simply because every gap between the procurement cost and patient price equals profiteering.

There are some genuine costs associated with hospitals that are not associated with the ordinary retail pharmacies. They keep the pharmacies open 24/7, employ pharmacists, stock inventories, fulfill the cold-chain and storage needs, suffer from wastage and expiry, and need medicines on demand at all times.

There have also been representations made to the CCI by hospitals that medicines procured by hospitals are not just used for retail purposes only but also for emergency patients, intensive-care patients, economically weaker patients, free medical camps, and even hospital staff members.

These facts must not be overlooked.

But at the same time, the fact remains that costs cannot be an excuse to indulge in arbitrary practices.

Transparency is the key issue here.

The Choice Patients Need

An especially noteworthy change was made by the state Food and Drug Administration of Maharashtra in June 2026, which instructed hospitals and doctors not to make patients buy their medicines only through the in-house pharmacy or any affiliated pharmacy.

It is important because it helps patients get back something they often lose when they go into a hospital for treatment: freedom of choice.

If the medicine that is prescribed to a patient is sold elsewhere for a significantly lower price, the patient or his or her family should have the right to do so on the condition of complying with certain reasonable requirements.

The hospital can sell the medicine; it does not mean, however, that it will have the monopoly in selling it.

Lifesaving Medicines Need a Different Standard

Biscuits and an oncology medicine cannot be regarded as equal consumer goods.

There is no chance for a normal price mechanism to operate effectively, especially in case of acute demand and scarce substitutes. It is not possible to just walk out of the situation if the prices are too high.

That is why there must be more transparency and monitoring of life-saving drugs.

It is crucial that the Supreme Court made its interference at this point since it moves the conversation from the legality of particular MRP to the reasonability of the entire pricing system.

The idea put forward by the Supreme Court about the cap of 16% can be viewed as one of the proposals within the current policy debate rather than a policy that is already enforced.

The Risk of Going Too Far in the Other Direction

There is another aspect of the issue which policymakers cannot afford to overlook.

Too strict pricing can have negative impacts on its own. The shortages of essential cancer medicines in India are examples of such situations when the steep rise in the prices of raw materials could not be countered by the producers owing to pricing restrictions. In June 2026, the government granted approval for a 50% increase in the ceiling prices of cisplatin and carboplatin due to the impact of platinum prices on the availability of these medicines.

This case provides an example that affordability and availability of medicines should go hand-in-hand.

An affordable medicine that does not make its way to patients cannot be termed as a success story.

Hence, the focus should not be on eliminating the profit margins; it should be on establishing a balance between cost, availability, hospital administration and affordability.

Transparency Could Be the First Cure

A relatively simple starting point might be transparency about pricing.

Pricing information on procurement cost, relevant MRP, hospital selling price, and any legitimate service charge involved with respect to a medicine must be provided to the patients wherever possible.

It is also necessary for hospitals to clearly separate medicines from other treatments and not to have the mark-up hidden in a complex inpatient bill.

An independent audit may uncover unusually large mark-ups without making an assumption that all hospitals act in the same manner.

Above all, patients should know whether they can buy the prescribed medicines from somewhere else.

Transparency will not end all pricing conflicts but at least it will make the exploitation more difficult to conceal.

Healthcare Cannot Become a Captive Market

The basic premise is quite straightforward.

A hospital has an obligation to ensure that treatment is both safe and timely. A pharmacy has the right to earn a reasonable profit. The manufacturers have economic sustenance needs to ensure availability of drugs.

But the patient must continue to be at the center of all three considerations.

If a person is seriously ill, then his vulnerability should not become a commercial benefit because of the captive market that exists.

It is precisely for this reason that the discussion initiated in the wake of the Supreme Court’s decision should not be confined to one particular percentage or headline. It must be broadened to encompass the way essential medicines are priced in India, hospital pharmacies, margin disclosures and the ability of the patient to exercise some discretion even during times of vulnerability.

Because if a drug is capable of making the difference between treatment or not, then the question is no longer “What is the MRP?”

But rather, “What is a fair price for a patient who has no option but to purchase it?”

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