The Supreme Court on Tuesday, 27 October 2026, sharply questioned the Centre over its decision to cap trade margins on anti-cancer medicines at 30 per cent, asking why the government had remained silent on the issue for years and raising serious concern over the steep mark-ups levied by private hospitals on medicines and medical consumables. The court has since reserved its verdict after concluding hearings on a clutch of public interest litigations (PILs) challenging India's medicine pricing framework.

Bench's sharp observations

A Bench of Justices Vikram Nath and Sandeep Mehta told the Centre that the issue went to the heart of patients' lives and could not be reduced to a matter of commercial interests or 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 said.

The court also expressed dissatisfaction with the Centre's explanation that the margin cap was aimed at balancing the interests of various stakeholders, noting that the reasoning offered insufficient protection to patients already under financial strain.

Hospital mark-ups under scrutiny

The Bench flagged a glaring example of price disparity: a saline drip line that costs a retailer approximately ₹15 but is billed to patients at ₹250. '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), the regulatory mechanism governing drug price ceilings.

The court also cited a specific incident involving a drug dealer whose wife was undergoing cancer treatment at a prominent private hospital. The dealer had informed the hospital that he could procure a chemotherapy injection at a dealer price of ₹11,000, but the hospital refused to administer it 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 Bench asked.

Private hospitals push back

Appearing for private hospitals, senior advocate Mukul Rohatgi argued that hospitals needed to procure medicines through their own pharmacies to guarantee the availability and quality of drugs administered to patients. He submitted that hospitals must maintain round-the-clock infrastructure and that medicines available in the open market could not always be verified as genuine.

Rohatgi further contended that reducing medicine prices would not necessarily lower the overall cost of treatment, as hospitals would then be compelled to recover operational expenses through other channels. The Bench rejected this reasoning, observing that hospitals could legitimately recover costs through means other than excessive medicine mark-ups. '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.

Government's stated savings and past action

The Centre had earlier informed the court that capping trade margins on anti-cancer drugs at 30 per cent of the maximum retail price (MRP) was expected to save patients approximately ₹2,500 crore annually. An affidavit filed by the Department of Pharmaceuticals stated that the measure could reduce the MRP of cancer medicines by 20 to 70 per cent, depending on the specific drug.

The government also cited a precedent from 2019, when the National Pharmaceutical Pricing Authority (NPPA) imposed a 30 per cent trade margin cap on 42 selected non-scheduled anti-cancer medicines. That intervention reportedly led to MRP reductions across 526 brands and generated estimated annual savings of around ₹984 crore for patients.

The court also raised concern over the burden placed on patients by government-backed schemes such as Ayushman Bharat, which reimburses healthcare costs only up to a specified ceiling — meaning any expenditure beyond that limit falls entirely on the patient.

What comes next

The Supreme Court has reserved its verdict and directed all parties to file written submissions. The PILs in question seek more effective regulation of the pricing gap between the supply price to retailers and the amount ultimately charged to patients — a disparity that the court has now described in unusually pointed terms. The ruling, when delivered, could set the framework for how drug pricing and hospital billing are regulated across India's private healthcare sector.