In short: The Supreme Court has questioned why the Central government is capping trade margins solely on cancer drugs rather than across the wider pharmaceutical market. The court highlighted steep retail markups on essential drugs and medical devices, asking why a broader cap cannot be introduced. The Centre has cited the need to balance affordability with drug availability, and the case will be heard next on 27 October 2026.

Why is the Supreme Court reviewing medicine prices?

A bench comprising Justices Vikram Nath and Sandeep Mehta is hearing a petition filed by Kishan Chand Jain seeking upfront price controls on non-scheduled medicines, price caps on medical devices, and mandatory generic prescriptions.

The petitioner submitted that roughly 82 per cent of medicines fall outside the scheduled category under the Drug Price Control Order (DPCO), 2013. Because these non-scheduled drugs are not subject to ceiling prices set by the government, pharmaceutical manufacturers enjoy substantial latitude in determining their maximum retail prices (MRP).

The Centre's proposed cap on cancer drugs

In response to the proceedings, the Central government submitted an affidavit outlining steps to regulate markups on oncology treatments. Key points presented by the Centre include:

  • A 30 per cent margin limit: The National Pharmaceutical Pricing Authority (NPPA) considered regulating trade margins on anti-cancer drugs during its 151st meeting on 8 October 2026. Under this Trade Margin Rationalisation (TMR) approach, the MRP cannot exceed a 30 per cent margin over the price to the retailer (PTR).
  • Building on a 2019 pilot: A 30 per cent trade margin cap was previously applied to 42 selected non-scheduled cancer medicines under an NPPA notification dated 27 February 2019.
  • Expert committee review: The government has established an expert panel to recommend the specific cancer drugs to be included under the regulation, with its report expected within 15 days. Inexpensive drugs will be excluded, and the list will be updated periodically.
  • Existing price controls: The Centre noted that scheduled medicines are already controlled through ceiling prices under the National List of Essential Medicines, which was last notified in 2022 and covers 388 drugs and more than 900 formulations.

What did the Supreme Court question?

The bench pushed the government on why such margin limits should apply exclusively to cancer therapies. During the hearing, the judges pointed out severe gaps between retailer acquisition costs and the prices paid by patients:

  • Steep markups: The court observed instances where life-saving drugs purchased for approximately ₹2,700 were sold at an MRP of ₹27,000, calling such pricing practices extreme exploitation of patients.
  • Medical devices and supplies: The bench noted that a saline drip line with an MRP of ₹11 was being sold for ₹270. It also cited an Indian-made cardiac stent with a PTR of ₹5,000 carrying an MRP of ₹25,000.
  • Proposed 16 per cent margin: The court asked the Centre why a uniform 16 per cent cap could not be placed on the MRP of medicines and medical devices above their price to retailers.
  • Antibiotic pricing: The bench also referenced Azithromycin pricing, pointing to figures of ₹78.29 MRP alongside ₹2,850 PTS, questioning how such structures protect patient welfare.

The Centre's stance on market balance

Appearing for the Centre, Solicitor General Tushar Mehta and Additional Solicitor General Aishwarya Bhati stated that cardiac stents are already subject to price caps and defended a measured approach to market regulation.

The government argued that drug price control requires a delicate balance between patient affordability, commercial viability, and product availability. Overregulation, the Centre contended, could disrupt the pharmaceutical supply chain and create shortages. The government stated that India maintains some of the lowest medicine prices in the world and noted that small manufacturers and generic producers have expressed concerns regarding production expenses and distribution to remote regions.

What happens next?

The Supreme Court has adjourned the matter to 27 October 2026 to hear further arguments on whether existing pricing mechanisms provide adequate protection to consumers or if wider price regulations are necessary across the broader pharmaceutical sector.

Frequently asked questions

What is trade margin rationalisation?

Trade margin rationalisation is a regulatory approach that limits the markup added between the price charged to the retailer and the final maximum retail price paid by the consumer.

Which cancer medicines are covered under the proposed cap?

An expert committee has been given 15 days from early October 2026 to recommend the list of approved anti-cancer medicines to be notified, excluding low-cost formulations.

When is the next Supreme Court hearing on this matter?

The Supreme Court has scheduled the next hearing in the case for 27 October 2026.

Sources

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