October 28, 2026: The Supreme Court has questioned how a chemotherapy injection priced at Rs 11,000 for a medical distributor can cost a patient Rs 1.3 lakh as the bench said there is a huge difference in drug and medical product prices.
During the hearing on October 27, the bench consisting of Justices Vikram Nath and Sandeep Mehta questioned the difference in price between what the medical institution pays for drugs and what is being charged to patients. The bench also asked why there is an issue with the drug pricing system and said that hospitals cannot justify high markups on medicine prices due to hospital expenses.
The bench was hearing two petitions. One was filed by advocate Kishan Chand Jain, seeking tighter regulation of non-scheduled medicine prices, mandatory generic prescriptions and limits on trade margins for medical devices. The other was filed by Dr Sanjay Kulshrestha, raising concerns about generic prescribing and medicine pricing practices.
“Hospitals can survive by other means. Not through this dacoity.” The bench said. The Court has also reserved its orders on the plea seeking stricter regulation on non-scheduled drugs and medical products.
The hearing has highlighted the issue of affordable cancer treatments, the difference between PTR (Price to Retailer) and MRP (Maximum Retail Price) prices, and how much protection patients have from high drug prices in private hospitals.
One of the cases mentioned during the hearing concerned a pharmaceutical distributor whose wife was receiving cancer treatment at a leading private hospital.
The distributor offered to buy a chemotherapy injection for the price of Rs 11,000. However they reportedly refused to give the patient the treatment and charged them Rs 1.3 lakh.
The reported Rs 1.3 lakh was the amount charged by the hospital, not necessarily the injection's printed MRP. PTR, MRP and the amount billed by a hospital are different figures. The example raised concerns about the difference between medicine procurement costs and hospital charges.
This meant there was a difference of Rs 1.19 lakh and the price charged to the patient was nearly 11.8 times higher than the price paid by the distributor. This led the bench to ask why there was such a huge difference and where the extra money was going.
“Can you give us any justification for this loot?” the Court asked.
The bench also said that there are issues with the price of medical products like saline drip lines. These are purchased by retailers for Rs 15, however, they are charged to patients for Rs 250. Another case mentioned was that a medicine which can be purchased for Rs 2,700 was charged at Rs 27,000.
These examples do not mean that all private hospitals charge high prices for their medicines. They were used to highlight the current issues with drug prices.
Mukul Rohatgi, Senior Advocate representing private hospitals, argued that hospitals have high running costs as they need to have infrastructure, equipment, and staff available 24/7. He also raised concerns that if patients had to purchase their own medicine, there may be issues with fake or poor quality medicine.
However, the judges questioned whether these costs justified the difference in price. The bench also raised concerns about discounts given to hospitals by companies. While they acknowledged that hospitals do have high running costs, they also questioned why they should charge such high markups on drugs when patients have little negotiating power, especially during serious illnesses like cancer.
The hearing also discussed the importance of the Drugs (Prices Control) Order (DPCO) 2013.
Scheduled drugs have a set price ceiling. Non-scheduled drugs give manufacturers more freedom with setting the initial MRP, however, annual increases are generally limited to 10%.
The issue with non-scheduled drugs is that they are not necessarily subject to the same initial price ceilings.
Kishan Chand Jain, the petitioner, mentioned that a large amount of drugs are not scheduled. He said that around 82% of drugs are not scheduled. Moneycontrol said that around 83% of the pharmaceutical market is unscheduled and Bar and Bench said nearly 90% of drugs are outside the DPCO. The numbers may vary depending on the description.
A Parliamentary Standing Committee on Chemicals and Fertilizers, in its report on the role and functions of the NPPA presented on August 6, 2026, also noted that non-scheduled formulations accounted for 82% of the pharmaceutical market share. The committee recommended reviewing the categorisation of medicines and establishing a permanent trade margin rationalisation framework to address excessive or unjustified initial prices.
The petitioner wants non-scheduled drugs to be more regulated, generic drugs to be prescribed, and statutory restrictions on margins for medical products.
The bench questioned why the government had not put more restrictions on prices despite the concern raised over the years. They also criticised the National Pharmaceutical Pricing Authority (NPPA) for the lack of restrictions.
The committee also highlighted gaps in recovering amounts demanded from pharmaceutical companies for overcharging. As of September 30, 2025, Rs 8,526 crore remained unrecovered, with nearly 70% of the amount tied up in court cases. It recommended establishing a dedicated legal cell within the NPPA to expedite recoveries.
Moneycontrol reported that there was government intervention in 2019 which covered 42 non-scheduled anti-cancer drugs. This led to an average reduction in prices of over 50% for over 500 brands of drugs, as stated in a parliamentary reply in March 2026. On October 27, the NPPA published updated MRPs for non-scheduled anti-cancer drugs. These will come into effect on November 9, 2026.
Separately, on October 17, 2026, the government announced trade margin rationalisation for 137 identified non-scheduled anti-cancer drugs. According to the Press Information Bureau, the measure is expected to reduce the maximum retail prices of these drugs by up to 70%, depending on their existing price structures. The revised prices will take effect on November 9, 2026.
The official announcement states that the intervention builds on the 2019 exercise, under which the maximum retail prices of 526 brands of non-scheduled anti-cancer medicines were reduced by up to 90%. These figures describe the maximum reductions reported by the government, rather than an average reduction across all brands.
Under Paragraph 19 of the Drugs (Prices Control) Order, 2013, the government has capped trade margins at 30% of the MRP for the 137 identified anti-cancer drugs. This is not a blanket 30% markup limit covering every medicine or every hospital charge. The government has also stated that hospitals and medical institutions must ensure compliance with the revised prices from November 9, 2026, as some anti-cancer drugs are supplied directly to them.
While there are specific interventions which affect drug prices, the issue with the current situation is that the overall system may not be protecting patients from excessive costs.
The MRP, purchase price, and price charged by the hospital will all vary. While scheduled drugs have a price ceiling set by the government, this does not necessarily protect patients from excessive charges by hospitals, discounts received on purchases and medical product charges.
The bench is questioning whether patients are being protected from excessive costs.
During the hearing, Additional Solicitor General Aishwarya Bhati, representing the Centre, said that the government was constantly looking at their pricing policy to ensure that it was balancing affordability with competition, innovation, and growth of the pharmaceutical industry.
However, the bench said that affordability needs to be looked at from the patient's perspective.
They also questioned the pharmaceutical industry's argument that prices are high due to innovation. Asking the government to list any new molecules developed by the Indian pharmaceutical industry in the last 3 decades.
This raises the issue of how pricing policies should be balanced to encourage innovation whilst also ensuring essential treatments are affordable.
The bench also mentioned that patients still face high costs despite public health cover. Bar and Bench reported that the bench said that whilst patients are covered by Ayushman Bharat the maximum they can receive is Rs 5 lakh. Any costs over this would need to be paid in another way.
The Supreme Court reserved its order after hearing the submissions. According to Moneycontrol, the parties were permitted to file written submissions within two weeks. The court's observations during the hearing do not themselves impose new price controls on hospitals or pharmaceutical companies.
Th/MF/MSM