In September 2026, a Bench of Justices Vikram Nath and Sandeep Mehta of the Supreme Court of India called a 10-fold markup on life-saving cancer drugs one of "carnage" and "extortion". They described the situation of a cancer drug with a price-to-retailer (PTR) cost of Rs. 2,700 being sold by drug manufacturers and retailers to cancer patients at Rs. 27,000—or ten times the price as "broad daylight dacoity" committed on vulnerable patients. The Court noted that such inflated prices are a fraud on the public exchequer, as a significant portion of these costs is reimbursed under government schemes at both the state and centre levels. And commented, "If that is not extortion, what else is it? A Rs. 100 medicine is being purchased by him for Rs. 2,000". The court was intervening in petitions by advocate Kishan Chand Jain and paediatrician Dr Sanjay Kulshrestha.

Attempting Half Measures

The immediate result of the Judgement is a 30% cap on trade margins for 137 non-scheduled anti-cancer drugs, effective November 9, 2026. The government said this will reduce prices of these critical drugs by 70%. Some price drops have been dramatic: for Palbociclib, used in targeted breast cancer therapy, the MRP has been cut by 93.3%—reducing the cost from Rs. 40,421 to Rs. 2,720—for a single treatment cycle. For Thiotepa, an intravenous chemotherapy drug, the MRP is cut by 91.1%, reducing the cost of a standard introductory course from roughly Rs. 3.2 lakh to Rs. 28,601.

While this is an important victory, we must also understand its limits. Patients’ rights advocates have analysed the National Pharmaceutical Pricing Authority’s (NPPA)  revised list. They found that of 643 brand/pack entries, 159, nearly one in four, have no price reduction at all. These include patented drugs costing Rs. 1.71 lakh to over Rs. 10 lakh per pack. The cap limits only what intermediaries add, not the manufacturer's starting price, so many drug prices still stay high.

No one understood the limits of half-measures better than Dr Amit Sengupta (1958 - 2018), former Associate Global Coordinator of the People's Health Movement (PHM) and co-convener of Jan Swasthya Abhiyan (JSA). His diagnosis was blunt: "There are no alternatives to instituting price controls: market mechanisms do not help to stabilise drug prices." Since 80% of medicines are out-of-pocket expenditures, he argued, the state cannot abdicate its responsibility to the public sector. Sengupta also dismantled a cherished national myth. "Only those drugs which are under patent outside India are cheaper here," he said, "while all other drugs here are more expensive than in Bangladesh, Sri Lanka, and in certain drugs, even the United Kingdom and Canada." India's reputation as the "pharmacy of the world" rests on producing generics, meaning out-of-patent drugs, for exports. This resulted from the Indian patent regime, in which the Left had made significant modifications to the original Manmohan Singh Government's patent draft brought before Parliament. But the government does not ensure that it translates to affordable medicines for its own people!

Erosion of Price Regulation

India has an elaborate system of cost-based price regulation. As discussed in a policy conversation under Right to Health resources titled "Curbing the Rising Prices of Medicines: Review of the Policy Framework", the first major attempts were in 1964 and were followed by the Drug Price Control Order (DPCO) of 1970. This was followed by the farsighted 1975 Hathi Committee Report, which led to the 1978 drug policy and the DPCO 1979, which subjected more than 90% of drugs (347 medicines) to price regulation. The mechanism was cost-plus pricing (Maximum Allowable Post-Manufacturing Expenses, or MAPE): the government estimated manufacturing costs, then added overhead to cover distribution and profits, yielding the final price.

However, constant lobbying by the pharma industry gradually undermined this structure. By the 1995 DPCO, an age of full liberalisation, barely 10% of pharmaceuticals remained under price restriction. In 2002, the government attempted to abolish price control. Civil society challenged it and fought a protracted legal battle. In 2011, the Supreme Court, by an interim order, forced the government to reintroduce price control on all critical life-saving drugs by standardising prices. This culminated in DPCO 2013, but with a twist: the government moved away from cost-plus to market-based pricing. Under DPCO 2013, the ceiling price for scheduled essential medicines is calculated by taking the average Price to Retailer (PTR) of brands with at least a 1% market share and adding a 16% margin. This is meant to cap what patients pay. But the vast majority of drugs, over 80%, fall outside the DPCO's scheduled list. For these non-scheduled medicines, manufacturers are free to set the MRP, even though many of them are lifesaving drugs.

The gap between what a hospital or pharmacist pays and the MRP is the trade margin, where extortion happens. The Supreme Court heard trade markups on some cancer drugs range from 170% to 700%. Companies also easily dodge price control by shifting production to irrational Fixed-Dose Combinations (FDCs). For example, paracetamol is listed as tablets, syrups and injections, with tablets available in 250 mg and 500 mg strengths. But if a company makes a branded generic 650 mg paracetamol tablet, it is out of price control. Companies then push this brand (e.g., Dolo 650), which is priced much higher than the standard formulation. Relentless promotion makes these medicines the most widely prescribed. Similarly, combining paracetamol with another unlisted medicine puts it outside price control. About 50–55% of branded generics on the market are such FDCs with varying dosages, all also outside price controls. In medical science, only about 10–20 FDCs have scientific merit; the rest are irrational. Yet FDCs dominate in India. Even though price controls are quite favourable to companies, only about 15–20% of branded generics actually fall under them. Pharma companies seek not profits but super profits at the expense of the sick.

JSA welcomed the Supreme Court’s intervention but calls it structurally insufficient: one-time MRP reductions are not enough. Without permanent, enforceable margin caps and regular NPPA monitoring and verification, excessive pricing can persist or re-emerge. India produces affordable generics, but advanced targeted therapies and immunotherapies remain shielded by strict patents; unlike high-income countries, India does not negotiate patented prices, leaving a monopoly market entirely at manufacturers’ mercy. The government’s commitment was also questioned by its advisers. Although the Court directed a committee on pharmaceutical marketing practices, the government appointed Dr Naresh Trehan of the private hospital chain Medanta. The Working Group on Access to Medicines immediately objected, citing NPPA's prior flags of inflated medicine prices and excessive charges at Medanta hospitals.

Failure of Political Will

China uses national volume-based procurement and price negotiation to force down costs. By end-2025, 11 competitive bidding rounds had covered 490 products, mostly off-patent generics, with average price cuts exceeding 50% and some surpassing 90%, leveraging the purchasing power of 1.4 billion citizens. Why can’t India? The answer is political, not technical. India’s regulatory architecture includes DPCO and NPPA, but it lacks political will to use them comprehensively; the pharmaceutical industry is powerful, and private healthcare is deeply embedded in policymaking, as the Medanta episode shows. Core structural demands long advocated by Dr Amit Sengupta, Jan Swasthya Abhiyan (JSA) and the People’s Health Movement (PHM) remain unimplemented: banning irrational FDCs, instituting cost-based price control, banning brand names to curb irrational prescribing, and massively expanding public procurement and distribution (successfully, as in Tamil Nadu since 1995, Keralam from 2008, Rajasthan since 2011).

The Supreme Court’s intervention has exposed the scale of the loot, forced a partial cap, and kept the issue in public view. But a court can only prod. Will the government deliver? The appointment of Dr Trehan to a reform committee suggests otherwise. The court has opened a door. Whether the government will walk through it depends on whether the political system is willing to put people's health before the profits of the privatised pharmaceutical and hospital industry. And of course, what all of us—we the people—will do!