New Delhi: Questioning how a hospital could charge Rs 1.3 lakh for a cancer injection that a medical distributor could procure for Rs 11,000, the Supreme Court Tuesday equated the price difference to “loot” and said hospitals could not justify charging patients 100 or 200 times the cost of medicines.
Citing the case of a distributor whose wife was under treatment for cancer, a bench of Justices Vikram Nath and Sandeep Mehta asked the Centre: “Can you show any justification for this loot, please? Why this difference? Where does the money go?”
The bench was hearing two petitions, one filed by advocate Kishan Chand Jain challenging the regulation of initial prices of non-scheduled medicines, and another by Dr Sanjay Kulshrestha raising concerns about generic prescribing and medicine pricing practices.
The proceedings also involve broader questions about the regulation of medicine prices and medical devices.
The petitions raised concerns about high maximum retail prices (MRPs) set by pharmaceutical manufacturers, the markups charged by hospitals and pharmacies, and the availability of cheaper generic alternatives.
The bench said patients had little bargaining power when their lives depended on treatment. “Hospital can survive through other means. Not through this dacoity,” said the Supreme Court.
The bench delivered these remarks after it was told that the distributor had approached a prominent hospital and explained that the chemotherapy injection cost him Rs 11,000 at the dealer price. The hospital refused to administer that injection and charged him Rs 1.3 lakh, the bench said.
The bench reserved its order after hearing the submissions.
Last month, the court had questioned the steep gap between the price manufacturers charge retailers and the maximum retail price (MRP) printed on medicines, saying that a drug bought for Rs 2,700 but carrying an MRP of Rs 27,000 amounted to “extortion”.
Centre’s pricing policy under scrutiny
The court questioned the effectiveness of the Drugs (Prices Control) Order, 2013 (DPCO), which provides the framework for regulating medicine prices. It asked why a medicine with an MRP of Rs 100 could be sold to retailers for Rs 10 or Rs 20, and why the government allowed such a gap to persist for medicines outside price controls.
“The government is allowing this to happen,” the bench said. It added that around 90 percent of medicines were outside the DPCO’s price controls.
It also referred to pending recoveries of Rs 8,000 crore from manufacturers over price differences.
In September 2026, a Parliamentary Standing Committee found that pharmaceutical companies owed the government Rs 8,526 crore in dues for overcharging on medicines as of 30 September, 2025. Nearly 70 percent of the amount was tied up in court cases. The panel recommended a dedicated legal cell within the National Pharmaceutical Pricing Authority (NPPA) to speed up recovery.
Additional Solicitor General Aishwarya Bhati, appearing for the Centre, said India already had some of the lowest medicine prices in the world and that complete control over the pharmaceutical sector was not the answer.
The bench questioned the government’s response, saying its efforts to regulate prices did not explain the difference between Rs 11,000 and Rs 1.3 lakh.
“Your calibration is too wayward. Rs 11,000 to Rs 1,30,000 is no calibration,” the top court told the Additional Solicitor General.
The bench also questioned why the Centre had taken so long to cap trade margins on anti-cancer medicines at 30 percent. The government clarified that the cap applied to the maximum retail price, not the price to retailer (PTR), or the price at which retailers procure medicines.
“Suddenly you took decision to bring capping of cancer drugs down to 30 percent. Why were you silent since so many years?” the bench asked.
It also challenged the pharmaceutical industry’s emphasis on innovation, asking the Centre to name five new molecules developed by the Indian pharma industry in the past 30 years.
Hospitals cite costs of running facilities
Senior advocate Mukul Rohatgi, appearing for hospitals, argued that private healthcare providers were necessary because the public health system was overstretched. He said a substantial share of private hospitals’ returns came from insurance and government health schemes, while patients paying out of pocket accounted for around 30 percent.
Rohatgi said hospitals could not rely on patients bringing medicines purchased elsewhere because of concerns about spurious drugs. They also had to maintain staff and infrastructure around the clock, he said, arguing that reducing medicine prices could lead to higher charges elsewhere.
The bench said hospitals could not use their operating costs to justify charging patients many times the procurement price.
The Centre argued that complete control over prices was not the answer.
The bench, however, asked whether medicine pricing should be treated purely as a commercial matter when patients’ lives were at stake.
“Should we have such capitalistic thinking?” it asked.
Petitioners seek wider price regulation
Drugs had been included as essential commodities following an amendment to the Essential Commodities Act that took effect in 2007. Medical devices were brought within the framework in 2020 through their notification as drugs.
However, routine ceiling-price fixation by the NPPA remains limited to scheduled products.
Advocate K.C. Jain, who is the petitioner in the case, told ThePrint, “Manufacturers generally set the initial MRPs of non-scheduled products, leaving scope for substantial margins for hospitals and pharmacies. Patients ultimately bear this financial burden.”
“When both categories (drugs and medical devices) are essential commodities, there is a strong case for reviewing this distinction and ensuring a more comprehensive pricing framework,” he added.
Jain said concerns expressed by the Supreme Court “offer hope”.
“We look forward to a judgment that promotes fair and transparent pricing, allows reasonable margins and provides meaningful relief to patients,” he added.
(Edited by Amrtanshy Arora)
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