On 27 October 2026, the Supreme Court of India reserved its order on petitions challenging medicine prices and trade margins. The Bench of Justices Vikram Nath and Sandeep Mehta questioned the Centre’s regulation of medicine prices and the disparity between the price to retailer (PTR) and maximum retail price (MRP).
Medicine Prices and Trade Margins
PTR is the price at which a medicine is sold to a retailer, while MRP is the highest price at which it may be sold to a consumer. The Court cited a cancer injection with a PTR of ₹11,000 that a hospital sold for ₹1.3 lakh, and a drip line bought for ₹15 and sold for ₹250. The Centre told the Court that it had capped trade margins on 137 non-scheduled anti-cancer drugs at 30% of their MRP. The decision was approved on 8 October 2026. The Department of Pharmaceuticals estimated that the measure could reduce retail prices by up to 70% and save patients about ₹2,500 crore annually.
Price Controls and NPPA
The Court asked why trade-margin rationalisation applied only to anti-cancer drugs and whether a uniform cap of about 16% over PTR could apply to all non-patented medicines. It noted that 90% of medicines fall outside price controls. The Centre stated that Indian medicine prices are among the lowest globally and that its policy balances affordability, availability and industry interests. The National Pharmaceutical Pricing Authority (NPPA), under the Department of Pharmaceuticals, regulates and monitors medicine prices. The Court described the authority as appearing “totally defunct” or “lagging behind”. As of 31 March 2026, ₹8,447.4 crore in overcharging claims from pharmaceutical companies remained outstanding, with more than ₹5,800 crore tied up in litigation.
Statutory Framework and Exam Facts
The Drug Prices Control Order (DPCO) is issued under the Essential Commodities Act. The DPCO provides the framework for fixing prices of scheduled formulations and monitoring prices of other medicines.
Important Facts for Exams
- The Essential Commodities Act was enacted in 1955.
- The NPPA was established in 1997 and functions under the Ministry of Chemicals and Fertilisers.
- The DPCO 2013 governs price controls on scheduled formulations listed in the National List of Essential Medicines.
- Non-scheduled medicines are subject to price monitoring and limits on annual price increases under the DPCO 2013.
The Supreme Court reserved its order on the petitions on 27 October 2026. The NPPA’s outstanding overcharging claims stood at ₹8,447.4 crore as of 31 March 2026.
