Full Breakdown
Supreme Court Pushes for Wider Drug Price Regulation After Government Caps Cancer Drug Margins
By Drooid · · How we work
Core Event: Supreme Court Questions Limited Trade-Margin Cap
- On October 12, 2026, the Union Government told the Supreme Court that it would cap trade margins at 30 % of the maximum retail price (MRP) for non-scheduled anti-cancer medicines.
- Justices Vikram Nath and Sandeep Mehta asked why regulation should be limited to cancer drugs, citing a cardiac stent (price to retailer INR5,000, MRP INR25,000), a saline drip line (price to retailer INR11, MRP INR270) and azithromycin (price to stockist INR28.5, MRP INR78.29).
- The Court gave the Centre until October 27 to work out modalities for broader price-cap measures and scheduled the next hearing for that date.
Background & Context
- India’s drug-price framework is set by the Drugs (Prices Control) Order (DPCO) 2013, which fixes ceiling prices for scheduled formulations and limits annual MRP increases for non-scheduled drugs.
- In 2019, the National Pharmaceutical Pricing Authority (NPPA) imposed a 30 % trade-margin cap on 42 non-scheduled anti-cancer medicines, reducing the MRP of 526 brands and generating estimated patient savings of INR984 crore.
Data & Statistics
- The Centre’s affidavit projects that the 30 % cap could lower the MRP of anti-cancer drugs by 20 %–70 %, yielding annual savings of roughly INR2,500 crore for patients.
- Court-cited price disparity: a cancer drug sold to retailers for INR2,700 but marketed at an MRP of INR27,000 (September 22 2026).
Official Statements & Responses
- Solicitor General Tushar Mehta said the cap would apply to both patented and non-patented cancer medicines, with an expert committee headed by the Director General of Health Services identifying the drugs. The NPPA will examine the committee’s recommendations before issuing a price notification.
- Additional Solicitor General Aishwarya Bhati warned that a uniform cap could jeopardise the commercial viability of low-value products, especially in rural areas, and argued that higher margins are sometimes needed to ensure availability.
Conflicting Reports & Gaps
- The Centre estimates INR2,500 crore in annual savings, while the 2019 NPPA exercise reported INR984 crore; the difference reflects the larger drug set now targeted, but the exact composition of the new list remains undisclosed.
- The government has not provided a definitive list of cancer medicines to be covered, stating that the list will be updated periodically, leaving the scope of the cap uncertain.
Verbatim Quotes
- “Another area of concern in the sector is supply of consumables in hospitals, where margins of 100-1000% or more are prevalent, along with a tendency of hospitals to purchase consumables that have a high MRP, with a low price to the distributor/hospital.” — Govt
What’s Next
- The Supreme Court has scheduled a further hearing for October 27, by which date the Centre must submit detailed modalities for extending trade-margin regulation to additional medicines and medical products.