'Why Is the System Helping Manufacturers?': Supreme Court Questions Medicine Price Gap

The Supreme Court on Tuesday, 27 October 2026, questioned the Centre over the wide gap between the maximum retail price printed on medicines and the much lower prices at which retailers and hospitals buy them, asking why the system appeared to work in favour of pharmaceutical manufacturers rather than patients. A bench of Justices Vikram Nath and Sandeep Mehta was hearing two petitions on medicine pricing, and it reserved its order, meaning no final directions have yet been issued.

The bench's central question was about trade margins — the difference between what a retailer pays and the maximum price a patient can be charged. "Why is the entire system working to help these people (manufacturers)?" the bench asked, according to reporting of the hearing by PTI. It also observed that the National Pharmaceutical Pricing Authority, the body that fixes and revises medicine prices, seemed to be a "totally defunct" body. Those are observations made during a hearing, not findings of fact against any individual manufacturer, and the Centre was given the opportunity to defend its policy in the same hearing.

What the Centre said in reply

Additional Solicitor General Aishwarya Bhati, appearing for the Centre, told the court that India has some of the lowest medicine prices in the world and that government policy is that the entire ecosystem is not to be controlled. The Centre said it continuously reviews its policies and balances competing considerations, including affordability, availability of medicines and growth of the pharmaceutical industry. The bench responded that affordability must also be assessed in the context of India's low per capita income, and asked why the government had taken so long to regulate profit margins on cancer drugs.

The petitions before the court seek regulation of the initial prices of non-scheduled medicines, price caps on medical devices and mandatory prescription of generic medicines, according to reporting of the hearing. The court also examined allegations that some corporate hospitals require patients to buy medicines from their own or designated pharmacies, a practice that can matter most when treatment costs are reimbursed through government-supported schemes.

What already exists: the cancer-medicine cap

One concrete step is already in place. The Centre has capped trade margins on 137 non-scheduled anti-cancer medicines at 30 per cent of the maximum retail price, with revised prices due to take effect on 9 November and estimated annual patient savings of about Rs 2,500 crore, according to the Centre's submission as reported. Under the existing Drugs (Prices Control) Order, 2013, scheduled essential medicines already have ceiling prices calculated with a 16 per cent retailer margin added to the average price to retailers.

During the hearing, the bench asked why a margin approach similar to that 16 per cent standard could not be considered more broadly across other medicines. That is a question put to the Centre, not an order. Any wider cap would require the Centre and the pricing authority to work out modalities and issue formal notifications; it does not take effect from courtroom remarks alone.

What happens next

With the order reserved, the next step is the court's written decision, for which no date has been announced in the reporting of the hearing. If the court issues directions on enforcement, disclosure of trade margins or wider margin controls, they could change how hospitals, distributors and retailers price medicines — and how much patients pay out of pocket. Until then, the existing caps remain the operative rules: the 30 per cent cap on 137 cancer medicines from 9 November, and ceiling prices for scheduled essential medicines under the 2013 order. Information only, not medical or legal advice. Hearing details as reported on 27 October 2026.