1. There is really no justification for it. The huge margins offered by drug manufacturers are due to market distortion. Manufacturers view the purchasers and prescribers, ie hospital and doctor, as their clients, not the patient on whom the medicine is used. 2. Controlling the margins on these drugs won’t affect research as claimed by manufacturers, since they are still free to fix their sale price to distributors. Only the subsequent exorbitant margin gets capped. However, corporate hospitals will certainly take a big hit and by and large their overall profit margins are not good enough to fully absorb this impact. 3. Bed charges, even in highest category of rooms, are well below the infra and running cost per bed of the hospital. It is a fact that hospitals cover the cost of stay and treatment primarily from high margins on pharmacy. 4. If margins from pharmacy and consumables too are cut off, you may find that hospitals substantially increase other charges to offset this substantial loss of income. We have seen this happen in coronary angioplasty - when margins on stents was capped, the procedure charges were increased to keep package cost the same. 5. Unfortunately in India, as of now services are not valued as much as products. Most patients are willing to pay 1 lakh for an implant, stent or medicine a lot more readily than giving the treating doctor 50k for his expertise. Additionally in oncology, the fear of cancer is a big incentive for people to spend any amount for medicines in the hope of cure. It is a sad reality that manufacturers, hospitals and doctors do exploit this situation. It is not a grand conspiracy, each of them is in it for their own reasons. 6. Even though I’m not a fan of overarching govt controls, in some situations such as this, the govt does need to step in and correct market distortions. I reiterate that for antibiotics too, rampant misuse due to high margins is causing scarily high rates of antibiotic resistance. The margins on all antibiotics must be made so low that there should be no incentive at all for misuse. 7. My opinion is that it is better for medical professionals to charge directly for services rendered, than rely on such indirect and somewhat unsavoury sources of income. People too should also get used to paying their treating doctors well for good, clean and timely services and treatment.