From Allergy Pills to PPIs: MPs Flag Massive Overpricing of Medicines, Seek Pricing Reforms

New Delhi: In an alarming indictment of India’s pharmaceutical pricing system, the Parliamentary Standing Committee on Chemicals and Fertilizers has flagged massive profiteering by pharmaceutical companies, revealing that life-saving medicines are being sold at profit margins ranging from 600% to as high as 1100%.Raising the issue in the Rajya Sabha, Aam Aadmi Party MP Swati Maliwal questioned the government on whether it intends to act decisively against such exploitative practices, citing the committee’s report that warned of unchecked market distortions in the pharmaceutical sector.The Standing Committee on Chemicals and Fertilisers, chaired by Mr. Azad Kirti Jha, tabled its report titled “Price Rise of Medicines in the Pharmaceutical Sector Impacting the Lives of Ordinary Citizens Adversely – A Review.”According to the Standing Committee, the profiteering is driven not by innovation costs but by excessive trade margins, particularly in branded generics. The report highlighted several commonly prescribed medicines where the gap between production cost and maximum retail price (MRP) was unjustifiably high.In the report, when asked whether the MRP on PTS (Price to Stockist) of medicine Ciprofloxacin 500 mg and Tinidazole 600 mg is ₹450/-, their MRP is ₹3500/-. The Department, in a written reply, submitted that NPPA has informed that Ciprofloxacin 500 mg and Tinidazole 600 mg are not scheduled formulations.As per the Pharmarack database, a major database of market prices of medicines in the domestic market, the highest per tablet prices for the said formulation in the month of April 2025 were ₹20.76 for MRP (including taxes) and ₹14.83 for PTS (excluding taxes).Also Read: Telangana Pharmacies Under Fire for Overpriced Generics, Misleading Discount ClaimsWhen asked whether the Price to Stockist (PTS) of Ibuprofen was ₹831 and its Maximum Retail Price (MRP) was ₹4,560, the Department replied as follows:NPPA has fixed ceiling prices of ibuprofen formulations as below:S. No.Dosage and strengthUnitCeiling price (in ₹, excluding taxes)1Tablet 200 mg1 tablet0.722Tablet 200 mg1 tablet1.223Oral liquid 100 mg / 5 ml (p)1 ml0.224Capsule 400 mg1 capsule1.335Capsule 200 mg1 soft gelatin capsule3.39All manufacturers are required to sell the formulations (generic or branded) within the notified ceiling prices (plus applicable taxes), the department stated.When asked, the PTS of Labocof is ₹316/-, and the MRP is ₹2850/-. The Department submitted that the NPPA has informed that Labocof is not a scheduled formulation. Further, the formulation is not captured in Pharmarack, the principal source database used for monitoring market information in respect of over 14,000 formulations.A detailed price list of medicines covering five commonly prescribed and widely used brands was shared with representatives of the Department of Pharmaceuticals and placed as annexures 5–9. The price list revealed substantial profit margins accruing to retailers, as evident from the margins reflected therein. To obtain the department’s comments, the same price list was also attached as an annexure to the Supplementary List of points forwarded to the department. Through this, the department was specifically asked to explain why exorbitantly high trade margins—ranging from over 600% to more than 1100%—are allowed in several commonly prescribed medicines used for routine and chronic health conditions, including widely used anti-allergy drugs and proton pump inhibitors (PPIs) that form part of standard treatment protocols across the country.Some of the specific formulations and their margins are as mentioned in the table below:Brand (Company)CompositionMRP (₹)PTS (₹)Margin %Common Anti-allergy medicationCetrest (Aristo)Cetrizine 10 mg21.061.85+1038%Alexcet (Glenmark)Cetrizine hydrochloride 10 mg21.062.00+953%Aldryl+ (Alkem)Ammonium Chloride, Diphenhydramine, Menthol, Sodium Citrate11411.25+911%Common Acidity, Gastroesophageal reflux disease (GERD) medicationNexom 40 (Aristo)Esomeprazole 40 mg17013.95+1119%Pantoglen 40 (Glenmark)Pantoprazole 40 mg10210+920%Esomer 40 (Glenmark)Esomeprazole 40 mg180.5025+622%Common Essential SupplementsAristocal CT (Aristo)Calcium carbonate 500 mg + calcitriol 0.25 mg + zinc 7.5 mg327.3016.95+1831%Calbonex 500 tab (Glenmark)Calcium carbonate 1250 mg + vitamin D3101.507.40+1272%Cipcal CT (Cipla)Calcium carbonate 1250 mg + vitamin D3305.0028.55+968%Common Cough SyrupAlkof LS (Alkem)Ambroxol, Guaifenesin, Levosalbutamol11824+392%Aristokof DX (Aristo)Chlorpheniramine Maleate and Dextromethorphan Hydrobromide12918.40+601%Cheston Cold DS (Cipla)Cetirizine, Paracetamol and Phenylephrine79.5023.35+240%Medications for chronic lifestyle conditions like hypertension and diabetesAmlip-AT (Cipla)Amlodipine + Atenolol72.609.60+656%Cosart-AM (Cipla)Losartan + Amlodipine7520.60+264%This shows that many commonly used medicines are sold at prices far higher than their basic supply price. While the Price to Stockist (PTS)—the price at which companies sell medicines to wholesalers—is very low, the Maximum Retail Price (MRP) charged to patients is many times higher.For several everyday medicines such as anti-allergy tablets, acidity (PPI) drugs, calcium supplements, cough syrups, and medicines for blood pressure and diabetes, the profit margins range from about 240% to over 1800%. This means patients often pay 6 to 18 times more than the base supply price.The Department in their written reply submitted that presently, prices of drugs are regulated as per the provisions of the Drugs (Prices Control) Order 2013 (DPCO, 2013) based on the National Pharmaceuticals Pricing Policy, 2012, with the objective of ensuring the availability of essential medicines at reasonable prices while providing sufficient opportunity for innovation and competition to support the growth of industry. It follows the principles of essentiality and market-based pricing of formulations only.As per extant provisions of DPCO, 2013, the National Pharmaceutical Pricing Authority (NPPA) under the Department of Pharmaceuticals (DoP) controls prices of medicines by fixing ceiling prices of formulations specified in Schedule-I to DPCO, 2013 which is based on the National List of Essential Medicines (NLEM) and retail prices of new drugs as defined in paragraph 2(u) of DPCO, 2013.Ceiling prices and retail prices are fixed by adding a 16% margin to the average of Price to Retailer (PTR) of all brands having a market share of equal to or more than 1% appearing in the market database. Further, the supply chain / marketing channel may vary across different drugs, and as per the current policy framework the margin at various levels in the supply chain is not regulated and is part of business practices and is guided by commercial considerations.Further, for the non-scheduled formulations, NPPA regulates prices as per the provisions of DPCO, 2013 and manufacturers are not allowed to increase the maximum retail price (MRP) of such formulations by more than 10% of MRP during preceding 12 months, although the average annual price increase by such manufacturers of non-scheduled drugs over the five-year period from April 2020 to March 2025 at 5.6%, which is broadly in line with the Wholesale Price Index (WPI) rise of 5.4% over the same period and is significantly lower than the permissible 10% increase.In this connection, it is submitted that in a study done through IQVIA, a leading global life sciences consulting firm, Indian prices were compared with those of three other low- and middle-income countries, viz., Sri Lanka, Bangladesh and Brazil for top-selling dosage forms (tablets, liquids, capsules and injections) of top-selling therapeutic categories (anti-infective, anti-cancer, cardiovascular and hormonal drugs). The study revealed that the prices of both scheduled and non-scheduled formulations in India were comparatively lower.Further, access to drugs at affordable prices is being ensured not only through ceiling price fixation of essential medicines and capping price rise of other medicines but also through Jan Aushadhi Kendras that provide quality generic medicines at rates typically 50% to 80% cheaper than branded medicines, cashless provision of medicines under Ayushman Bharat Pradhan Mantri Jan Arogya Yojana in case of hospitalisation, free provision of essential drugs in public health facilities under Government’s Free Drugs Service Initiative, through AMRIT Pharmacy stores, and financial assistance to poor patients under Rashtriya Arogya Nidhi and the Health Minister’s Discretionary Grant.The Department stated that exact trade margins for specific medicines cannot be accurately assessed because detailed cost data on distribution is not available with NPPA or the Department under the current legal framework. Therefore, inputs were sought from the Indian Pharmaceutical Alliance (IPA).According to IPA, medicines are supplied through two marketing channels—branded generics (mainly urban markets) and trade generics (mainly rural and remote areas). The distribution costs of these two channels are very different, which leads to large differences in trade margins in percentage terms.High margins in the trade generics channel are attributed to low sales volumes, higher logistics and inventory costs, longer supply chains, higher financing costs for small retailers, and lack of economies of scale. Lower PTS values and higher absolute costs further inflate margin percentages.The Department emphasized that drug price increases have broadly matched WPI trends, Indian drug prices remain among the lowest globally, and affordability initiatives are in place. At the same time, NPPA and DoP are actively addressing pricing concerns, including piloting Trade Margin Rationalisation (TMR) by capping margins on 42 anti-cancer drugs, and are examining stakeholder feedback to frame a suitable policy under DPCO, 2013.Also Read: Affordable Medicines Without Hurting Pharma Growth: J P Nadda Says Govt Balancing Drug Prices, Industry Interests