Coming down heavily on the lack of effective price controls for medicines, the Supreme Court questioned how life-saving cancer drugs bought by retailers for ₹2,700 could carry a maximum retail price (MRP) of ₹27,000. A bench of justice Vikram Nath and justice Sandeep Mehta described the 10-fold difference between the price to retailer (PTR) and MRP as 'broad daylight dacoity', while questioning the silence of authorities responsible for regulating medicine prices.
“There are essential medicines for cancer for which MRP is ₹27,000 and PTR is ₹2,700. That is absolute rampage and carnage and broad daylight dacoity with the patients. How can a patient be cheated for a medicine which the manufacturer sells to the retailer at ₹2,700 and MRP is printed at ₹27,000? It is surprising that the authorities who are supposed to take a decision on this are absolutely silent. We need not spell out the reasons for that,” justice Mehta remarked.
The observations came during the hearing of a public interest litigation (PIL) filed by Kishan Chand Jain concerning medicine pricing, mandatory generic prescriptions and price regulation of medical devices.
The bench also questioned the very basis for allowing such a wide gap between the price at which a manufacturer supplies a medicine to a retailer and the MRP printed on the product.
“Why this disparity at all? A medicine which is, as a matter of fact, sold by the manufacturer to the retailer at 10% of its MRP, why has it got this high MRP? Why should there be such a disparity?” the Court asked.
‘No Control’ Over Initial Pricing
Mr Jain, appearing in person, told the Court that the existing regulatory framework does not adequately control the price at which medicines outside the scheduled list are initially launched.
Under the Drug Price Control Order (DPCO), 2013, the National Pharmaceutical Pricing Authority (NPPA) fixes ceiling prices for scheduled medicines.
He contended that about 82% of medicines fall outside the scheduled category and are therefore not subject to the same form of price control at the point of initial launch.
“For instance, a manufacturer wants to launch a medicine today. It can fix it at ₹1; it can fix it at ₹1,000. No regulatory regime controls price fixation. Only after he has fixed it, there is a restriction that he cannot increase it by more than 10%,” Mr Jain submitted.
He argued that the absence of an initial price-fixation mechanism enables manufacturers to set high launch prices and leaves considerable room for margins further down the supply chain.
Mr Jain's submissions included examples of medicines with significant differences between PTR and MRP. In one instance, a medicine had an MRP of ₹73 against a PTR of ₹22.75, while another had an MRP of ₹61 against a PTR of ₹9.65.
Justice Mehta also pointed to the pricing of a commonly prescribed statin to illustrate the anomaly. “A tablet of Rosuvas - a strip costs about ₹214 because it is not in the scheduled drugs controlled under DPCO. And if Rosuvas contains a combination of aspirin, it comes within DPCO scheduled medicines and costs ₹70. Though a combination should be costlier, the disparity is there,” the judge observed.
Taxpayers Also Bear the Burden
The bench said inflated medicine prices have implications beyond individual patients, particularly when treatment is funded through government health schemes.
It noted that when medicines are billed to patients under schemes such as Ayushman Bharat, the eventual burden falls on public funds.
“When patients are taking treatment under the Ayushman Bharat scheme, the full price has to be paid by the taxpayers. Hospitals are buying medicines at these prices and then being reimbursed by the government. It’s ultimately the taxpayers’ money. There is a clear-cut case of fraud,” the Court said.
The bench questioned how such margins could be justified when families often struggle to meet the cost of cancer and other serious illnesses. “If that is not extortion, what else is it? A ₹100 medicine is being purchased by him for ₹2,000,” it remarked.
The Court also suggested that a comprehensive price-fixation mechanism could address some of the concerns underlying the debate over generic medicines.
“If all medicines are brought within that umbrella of price fixation, we may not need even a system of generic medicine. Everything will be at par,” the bench observed.
Pharma Industry Disputes Responsibility for High Retail Prices
Senior counsel Kapil Sibal, appearing for the Indian Pharmaceutical Alliance (IPA), argued that pharmaceutical manufacturers should not necessarily be held responsible for the large margins ultimately seen in the retail price.
He urged the Court to examine the prices at which medicines are supplied to stockists and retailers. “At what price it is sold to the stockist is the real issue,” Mr Sibal said.
The Court, however, questioned this position in the context of the MRP printed on medicines, noting that the manufacturer is responsible for fixing the MRP.
The discussion, therefore, shifted towards the pricing structure across the distribution chain and the extent to which manufacturers, stockists, retailers and hospitals contribute to the final price paid by patients.
Govt Open To Improving System
Additional solicitor general (ASG) KM Nataraj, representing the Union government, told the bench that the government did not regard the proceedings as adversarial and was willing to examine areas where the existing framework could be strengthened.
“Whatever there is scope for improvement, definitely we'll try to improve. Medicine should reach the last person,” Mr Nataraj said, referring to initiatives such as Jan Aushadhi Kendras, which sell generic medicines at lower prices.
Mr Jain, the petitioner, however, questioned whether such outlets could address the wider problem given their relatively small share of the overall pharmaceuticals market.
He submitted that against a pharmaceuticals market estimated at ₹2.5 lakh crore, sales through Jan Aushadhi Kendras were around ₹2,200 crore — less than 1% of the total market.
That prompted the bench to ask: “The issue is, for those medicines which are not available in Jan Aushadhi Kendras, where does the patient go?”
Generic Medicines and Medical Devices Also under Scrutiny
The proceedings also covered the issue of mandatory generic prescriptions and the regulation of medical devices.
Dr Sanjay Kulshrestha, another petitioner, submitted that generic medicines could reduce treatment costs but said concerns over quality and reliability would need to be addressed if doctors were required to prescribe medicines without specifying brands.
He argued that if a doctor prescribed only the generic name, the pharmacist could effectively decide which manufacturer's product the patient received, despite having no role in diagnosing or treating the patient and potentially having commercial considerations.
The petition also seeks stronger regulation of medical device prices, alleging that substantial markups can occur between procurement and the price ultimately paid by patients.
The Supreme Court did not conclude the matter on Tuesday and adjourned the hearing. The case has been listed for further hearing on 29 September 2026, when the Bench is expected to hear further submissions from Mr Sibal and the Union government.
