The Supreme Court this week pulled up the Centre over the “loot” drug manufacturers enjoyed because of the wide disparity between the maximum retail prices (MRP) of medicines and the prices retailers pay to procure them.

A cancer medicine bought by a retailer for about Rs 2,700 and carrying a maximum retail price (MRP) of Rs 27,000 reflects a central weakness in India’s drug-pricing system: The price printed on a medicine pack can be much higher than the price at which a retailer purchases it.

On October 27, the court asked the Centre what stops it from controlling the entire range of medicines, and reserved its order in Kishan Chand Jain v. EMRB . At the heart of the case is a two-tier regulatory system: only Schedule I medicines under the Drugs (Prices Control) Order, 2013, have price ceilings.…