Rajasthan cancels licences of 31 medical stores over RGHS fraud
Synopsis
Rajasthan's crackdown on RGHS fraud goes beyond routine action — forged doctor signatures, medicines billed at five times purchase price, and discounts slashed from a mandated 40% to just 12%. With AI-based monitoring now deployed and a comprehensive action plan in the works, the state is signalling that health scheme fraud will no longer be treated as an administrative footnote.
Key Takeaways
The Drug Control Department permanently cancelled licences of 31 medical stores across 9 districts of Rajasthan for RGHS fraud.
Stores were found using forged doctors' signatures and billing medicines at 2–5 times their purchase price.
Where a minimum discount of 40% was mandated, some stores offered as little as 12% .
An AI-based monitoring system has been deployed to detect inflated pricing, unverified claims, and erroneous product mapping in real time.
TMS access of 10 stores has been suspended; 13 others have received show-cause notices.
A comprehensive state-level action plan to curb health scheme profiteering is being finalised for imminent implementation.
The Rajasthan government has permanently cancelled the drug licences of 31 medical stores across the state following an investigation into fraudulent billing and pricing violations under the Rajasthan Government Health Scheme (RGHS). The Drug Control Department took the action on 28 July after the Rajasthan State Health Assurance Agency uncovered collusion between medical stores, doctors, and beneficiaries to submit inflated and fabricated medicine claims.
Scale and Spread of Cancellations
The cancelled licences cover stores across nine districts: 11 in Jaipur, 9 in Bharatpur, 2 each in Nagaur and Dholpur, and one each in Hanumangarh, Bhilwara, Sikar, Jodhpur, and Alwar. Stores with cancelled licences are barred from purchasing or selling medicines. Alongside the cancellations, the government has initiated recovery of excess payments and suspended defaulting stores from the Transaction Management System (TMS).
What the Investigation Found
Principal Secretary (Medical and Health) Gayatri Rathore said the probe revealed that certain stores had used forged doctors' signatures and raised claims for non-reimbursable items in place of actual medicines. Specific medicines — including Exemptia 40 mg, Denberi Injection, Terifrac (Teriparatide), and Trulicity 1.5 mg — were billed at rates substantially higher than prevailing market prices.
The inquiry further found that several stores failed to provide the mandatory minimum discount under RGHS guidelines. Where a minimum discount of 40 per cent was required, some stores offered as little as 12 per cent. In multiple instances, medicine claims were submitted at amounts ranging from two to five times their actual purchase price.
AI-Based Monitoring Deployed
To strengthen oversight, the government has deployed an Artificial Intelligence (AI)-based analytical system that automatically flags irregularities including inflated pricing, abnormal Maximum Retail Prices (MRPs), unverified claims, erroneous product mapping, and other misleading information. Rathore said RGHS medicine claims are now subject to rigorous multi-level scrutiny backed by this system.
Further Action Under Way
Chief Executive Officer of the Rajasthan State Health Assurance Agency, Harjilal Atal, said TMS access of 10 medical stores has been temporarily suspended, while 13 others have been issued show-cause notices and directed to submit responses under prescribed procedure. Atal added that the state government is finalising a comprehensive action plan to curb profiteering in medicine claims, which will be implemented shortly.
Atal urged all RGHS-empanelled medical stores to strictly comply with scheme guidelines, emphasising that the government's goal is a fully transparent and financially disciplined medicine distribution system that ensures eligible beneficiaries receive quality medicines at reasonable prices.
Point of View
Claims at five times purchase price, mandated discounts slashed to a third — points to systemic collusion rather than isolated lapses. Deploying AI-based detection is a meaningful upgrade, but technology alone cannot substitute for on-ground audits and faster prosecution of offenders. The real test will be whether the forthcoming 'comprehensive action plan' includes deterrent penalties and independent verification, or remains another administrative circular that empanelled stores learn to work around.
NationPress
29 Jul 2026
Frequently Asked Questions
Why did Rajasthan cancel the licences of 31 medical stores?
The licences were permanently cancelled after an investigation by the Rajasthan State Health Assurance Agency found the stores had submitted fraudulent claims under the RGHS, including forged doctors' signatures, claims for non-reimbursable items, and medicines billed at two to five times their purchase price.
Which districts are affected by the licence cancellations?
The 31 cancelled licences span nine districts: 11 in Jaipur, 9 in Bharatpur, 2 each in Nagaur and Dholpur, and one each in Hanumangarh, Bhilwara, Sikar, Jodhpur, and Alwar.
What is the RGHS and who does it cover?
The Rajasthan Government Health Scheme (RGHS) is a state-run health insurance programme for government employees and their families, providing cashless access to medicines and medical services through empanelled stores and hospitals.
How is the Rajasthan government preventing future RGHS fraud?
The government has deployed an AI-based analytical system that automatically flags inflated pricing, abnormal MRPs, unverified claims, and erroneous product mapping. A comprehensive action plan to curb profiteering is also being finalised for implementation shortly.
What action has been taken against stores not yet delicensed?
TMS access of 10 additional medical stores has been temporarily suspended, while 13 others have been issued show-cause notices and asked to submit responses under prescribed procedure. Recovery of excess payments has also been initiated against defaulting stores.
