Supreme Court wants cap on trade margin for all essential medicines and medical products

Even as the Centre informed the Supreme Court on Monday (October 12, 2026) that it had decided to cap trade margins at 30% for non-scheduled cancer drugs, the court questioned why the benefit of such price regulation should be confined to cancer drugs and not extended to other essential medicines and medical products.

The development comes after a Bench of Justices Vikram Nath and Sandeep Mehta expressed concern over stark disparities between the price to retailer (PTR) and the maximum retail price (MRP) of certain medicines, particularly cancer drugs, with mark-ups in some instances soaring to 1,000%. The Bench had flagged that such exorbitant mark-ups constituted “broad daylight dacoity” and placed an enormous financial burden on patients.

Solicitor General Tushar Mehta, appearing for the Centre, informed the Bench that the proposed 30% trade-margin cap would cover both patented and non-patented cancer medicines, with an expert committee headed by the Director General of Health Services tasked with identifying the drugs to be brought within its ambit. The National Pharmaceutical Pricing Authority (NPPA) will examine the committee’s recommendations before issuing a price notification to implement the cap.

The Bench, however, said that while the intervention was commendable, it was inadequate, and questioned why other medicines and medical devices could not also be brought within the 16% retailer margin prescribed under the Drugs (Prices Control) Order (DPCO), 2013.

“This is just the tip of the iceberg... this has come around only because of the unduly hard observations we made during earlier hearings. What about other drugs,” the Bench asked.

The top court was hearing petitions filed by advocate Kishan Chand Jain and paediatric surgeon Sanjay Kulshrestha seeking stricter enforcement of price controls under the DPCO to curb disproportionate margins across the pharmaceutical supply chain.

Justice Mehta drew attention to steep markups on medical devices and consumables, pointing out that an India-made cardiac stent costing around ₹5,000 was being sold by hospitals for more than ₹25,000. He cited the example of a saline drip line carrying an MRP of ₹11 being sold for ₹270.