New Delhi, October 27, 2026 (Yes Punjab News)
The Supreme Court on Tuesday questioned the Centre over its decision to cap trade margins on anti-cancer medicines at 30 per cent, asking why the government had taken so long to act. The court also expressed concern over substantial mark-ups charged by private hospitals on medicines and medical consumables, emphasising that patients’ lives and financial burdens must remain central to the issue.
A Bench of Justices Vikram Nath and Sandeep Mehta observed that the matter could not be viewed merely through the lens of commercial interests and economic policy.
“Why did you suddenly decide to cap the trade margin on cancer medicines at 30 per cent? Why were you silent for so many years? Do not force us to ask harsh questions. You are dealing with matters concerning people’s lives. Do not treat this as a business,” the Bench told the Centre.
The observations came during hearings on public interest litigations (PILs) concerning the regulation of medicine prices, generic medicines, medical devices and prescription practices.
The apex court expressed dissatisfaction with the Centre’s explanation that the decision to cap trade margins was intended to balance the interests of various stakeholders. It also questioned the financial burden on patients when government-backed health schemes such as Ayushman Bharat reimburse treatment costs only up to specified limits, leaving patients to pay the additional expenditure themselves.
The Bench further raised concerns over the high mark-ups charged by hospitals on medical consumables. Citing the example of a saline drip line that reportedly costs a retailer around ₹15 but is billed to patients at ₹250, the court questioned the effectiveness of the existing regulatory framework.
“Why is the DPCO in place if this is what is happening? The government itself is allowing this to happen,” the court observed, referring to the Drug Price Control Order (DPCO), which provides the regulatory framework for controlling drug prices.
The Bench also referred to an incident involving a drug dealer whose wife was undergoing cancer treatment at a prominent private hospital. According to the account discussed in court, the dealer had informed the hospital that he could procure a chemotherapy injection at a dealer price of ₹11,000. However, the hospital allegedly refused to administer the medicine and instead charged ₹1.30 lakh for the same injection.
“Can you show any justification for this loot, please? Why this difference? Where does the money go?” the court asked.
Appearing for private hospitals, senior advocate Mukul Rohatgi argued that hospitals needed to procure medicines through their own pharmacies to ensure the availability and quality of drugs administered to patients. He submitted that hospitals had to maintain infrastructure and facilities around the clock and could not always be certain that medicines available in the open market were genuine.
Rohatgi also argued that reducing medicine prices would not necessarily lower the overall cost of treatment, as hospitals would still need to recover their operational expenses through other means.
The Bench, however, rejected the justification for excessive mark-ups, observing that hospitals could recover their costs through legitimate means rather than charging disproportionately high prices for medicines.
“A hospital can survive through other means, not through this dacoity. You are a commercial hospital. You charge for everything. But why should a medicine be quoted at 100 or 200 times its price?” the court asked.
The Centre had earlier informed the Supreme Court that capping trade margins on anti-cancer medicines at 30 per cent of their maximum retail price (MRP) was expected to save patients around ₹2,500 crore annually.
In an affidavit filed before the court, the Department of Pharmaceuticals said the proposed measure could reduce the MRP of cancer medicines by 20 to 70 per cent, depending on the drug. The government said the move was intended to curb excessive trade mark-ups while allowing reasonable margins for distributors and retailers.
The Centre also referred to an intervention in 2019, when the National Pharmaceutical Pricing Authority (NPPA) imposed a 30 per cent trade margin cap on 42 selected non-scheduled anti-cancer medicines. According to the government, the measure resulted in price reductions across 526 brands and generated estimated annual savings of around ₹984 crore for patients.
The Supreme Court has concluded the hearing and reserved its verdict. It has also directed all parties to submit their written arguments.
The PILs raise concerns over the existing medicine-pricing framework and seek more effective regulation of the disparity between the prices at which medicines are supplied to retailers and the amounts ultimately charged to patients.
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