Yes, a composition dealer can sell medicines or any other product on any price provided it does not exceed MRP i.e no need to deduct GST component from MRP before sale.
 
You’re right that a Composition dealer cannot charge GST on its bill of supply (technically known as Tax Invoice, if GST charged), but there is no restriction in supplying goods at any price upto MRP for such dealers.
 
Although MRP includes all the applicable taxes, but the purpose for the same is simplification i.e letting the customer know the price of such product that is maximum even in case any tax applies on that product. Now in case of Composition Levy, since no GST is directly taken from customer, it does not mean that the tax component  which would have otherwise been included in MRP is now to be excluded while selling products on composition levy.  
 
 
I hope this will help!