# Supreme Court reserves order on why most medicines stay outside price control

URL: https://upsc.help/current-affairs/2026-10-28/sc-drug-price-control-reserved/
Date: 28 October 2026 (2026-10-28)
Source: The Hindu, Page 12
UPSC papers: GS2, GS3
Publisher: upsc.help (Pratidin), free and open-source UPSC Civil Services current affairs. Not affiliated with UPSC. Every fact was checked against the source reports by a separate review before publishing.

**In one line:** The Supreme Court has reserved orders on whether the Centre must extend price control beyond the essential medicines it now caps, after the Centre defended selective intervention.

On 27 October 2026 a Supreme Court bench of Justices Vikram Nath and Sandeep Mehta reserved its order in Kishan Chand Jain v. Ethics and Medical Registration Board, a petition that asks why most medicines in India sit outside price control. The petitioner seeks regulation of the launch prices of non-scheduled medicines, mandatory generic prescriptions and price caps on medical devices. The bench allowed written submissions within two weeks. During the hearing the judges listed price gaps they found hard to justify: an MRP (maximum retail price) said to be "400 times" the procurement price, a chemotherapy injection bought from a dealer at ₹11,000 for which a hospital charged ₹1.3 lakh, and a saline drip with an MRP of ₹15 sold for ₹270.

The Centre, through Additional Solicitor General Aishwarya Bhati, said scheduled medicines (those whose prices are capped) make up 35% of the market by volume and 18% by price; the petitioner put non-scheduled medicines at about 83% of the market by value. The ASG said the National Pharmaceutical Pricing Policy, 2012 balances four aims: affordable essential medicines, innovation and competition, industry growth, and employment. "The decision is not to have a full control but to make only interventions from time to time," she said, pointing to Paragraph 19 of the Drugs (Prices Control) Order (DPCO), 2013, which allows price fixing in extraordinary circumstances in the public interest. Past uses include a 2014 cap on 106 non-scheduled diabetes and cardiovascular formulations, a 2019 trade-margin cap on 42 non-scheduled anti-cancer drugs, and a recent cap on trade margins of selected non-scheduled anti-cancer medicines at 30% of MRP.

The bench was sceptical. Justice Nath asked, "What stops you from taking control of the entire range of medicines and drugs?" Justice Mehta said the choice of what is scheduled is "where the game is", noted that makers fix a high MRP at launch and then face only a 10% annual increase limit, and remarked that the National Pharmaceutical Pricing Authority (NPPA) "seems to be defunct with due respect". For hospitals, Senior Advocate Mukul Rohatgi argued that medicine margins cover operating costs because government and insurance reimbursements are lower than billed amounts, warned that capping margins could raise other charges, and suggested an expert committee. The case has run through hearings on 29 September and 12 October, when the bench asked why a uniform 16% margin over the price to retailer could not apply.

## Prelims facts

- On 27 October 2026 a bench of Justices Vikram Nath and Sandeep Mehta reserved orders on a plea to bring non-scheduled medicines under price control.
- The Centre said scheduled (price-capped) medicines are 35% of the market by volume and 18% by price.
- Paragraph 19 of the DPCO, 2013 lets the government fix prices of any drug in extraordinary circumstances in the public interest.
- Makers of non-scheduled medicines set their own MRP but cannot raise it by more than 10% in 12 months.
- The NLEM forms Schedule-I of the DPCO, 2013; the NPPA fixes ceiling prices for medicines in it.

## Quick recall

- **Which order governs drug price control in India today?** The Drugs (Prices Control) Order, 2013.
- **What forms Schedule-I of the DPCO, 2013?** The National List of Essential Medicines (NLEM).
- **When was the NPPA set up, and under which department?** 29 August 1997; attached office of the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers.
- **By how much can a maker raise the MRP of a non-scheduled formulation?** By at most 10% over the preceding 12 months.
- **On what basis are ceiling prices revised each year?** The Wholesale Price Index (all commodities) of the previous calendar year.
- **Which DPCO paragraph lets the government fix prices in extraordinary circumstances?** Paragraph 19.
- **Share of the market under ceiling prices, per the Centre (October 2026)?** 35% by volume and 18% by price.
- **Which bench reserved orders on 27 October 2026?** Justices Vikram Nath and Sandeep Mehta.

## Prelims practice question

With reference to drug price regulation in India, consider the following statements:
1. The National List of Essential Medicines (NLEM) forms Schedule-I of the Drugs (Prices Control) Order, 2013.
2. Manufacturers of non-scheduled formulations need the prior approval of the NPPA to fix the launch price of every such formulation.
3. Ceiling prices of scheduled formulations are revised every year on the basis of the Wholesale Price Index.
Which of the statements given above are correct?

(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3

Answer: (b) 1 and 3 only. 1 is correct: NLEM 2022 was notified as Schedule-I of the DPCO, 2013. 2 is wrong: makers of non-scheduled formulations fix the MRP themselves; the limit is that they cannot raise it by more than 10% in 12 months (prior price approval applies to 'new drugs' of existing scheduled-formulation makers). 3 is correct: ceiling prices are revised annually on the basis of the WPI (all commodities) for the previous calendar year.

## UPSC previous-year questions this connects to

- UPSC Mains 2024, GS2: In a crucial domain like the public healthcare system the Indian State should play a vital role to contain the adverse impact of marketisation of the system. Suggest some measures through which the State can enhance the reach of public healthcare at the grassroots level. (https://upsc.help/pyq/q174-crucial-domain-like-public-healthcare-system-indian/)
  How to use this story in the answer: Use drug pricing as a concrete case of marketisation in healthcare and of the State's regulatory levers to protect patients.
- UPSC Mains 2015, GS2: Public health system has limitation in providing universal health coverage. Do you think that private sector can help in bridging the gap? What other viable alternatives do you suggest? (https://upsc.help/pyq/q173-public-health-system-has-limitation-providing-universal/)
  How to use this story in the answer: Show that private provision can bridge gaps but brings high-margin pricing that needs regulation.
- UPSC Prelims 2023, Prelims: Consider the following statements: Statement-I: India's public sector health care system largely focuses on curative care with limited preventive, promotive and rehabilitative care. Statement-II: Under India's decentralized approach to health care delivery, the States are primarily responsible for organizing health services. Which one of the following is correct in respect of the above statements? (https://upsc.help/pyq/q178-consider-following-statements-statement-i-india-s-public/)

## Mains practice question

Most medicines sold in India lie outside price control. Examine the case for and against extending price regulation to non-scheduled medicines, in the light of recent Supreme Court hearings. (250 words)

### Model answer

In October 2026 the Supreme Court reserved orders on a plea to regulate non-scheduled medicines, after the Centre said scheduled drugs cover only 18% of the market by price and 35% by volume.

## The present framework
- The DPCO, 2013 caps ceiling prices only for Schedule-I (NLEM) medicines, revised yearly by the WPI.
- Non-scheduled makers fix their own MRP, with a 10% annual increase limit.
- Paragraph 19 allows case-by-case intervention: 106 diabetes and cardiac formulations (2014), 42 cancer drugs (2019), and a 30%-of-MRP trade margin cap on selected cancer drugs.

## Case for wider control
- The bench cited an MRP "400 times" the procurement price and a ₹15 saline drip sold for ₹270.
- Patients have little bargaining power or information, as the Centre's own affidavit concedes.
- High launch MRPs escape the 10% rule; public schemes and taxpayers bear inflated hospital bills.
- Right to health under Article 21 and Article 47 support state action.

## Case against blanket control
- The 2012 pricing policy balances affordability with innovation, competition, industry growth and jobs.
- Hospitals say medicine margins cross-subsidise costs that reimbursements do not cover; caps may shift charges elsewhere.
- Rigid caps can hurt supply of low-priced medicines.

## Way forward
- Trade-margin rationalisation (for example, a cap linked to the price to retailer) rather than full price fixing.
- Strengthen NPPA monitoring of hospital pharmacies; expert committee, as hospitals suggest.
- Push generics through Jan Aushadhi and generic prescription.

A calibrated mix of margin caps and stronger enforcement can protect patients without choking supply.

## The basics

## Why this matters

How the state decides which medicines get a price cap, and which are left to the market, is a classic GS2 (health, regulators) and GS3 (industrial policy) question. The Supreme Court's hearing on 27 October 2026 put that choice under a spotlight.

## Two kinds of medicine

India's price regime divides medicines into two groups. **Scheduled** medicines are those on the National List of Essential Medicines, which forms Schedule-I of the Drugs (Prices Control) Order, 2013. The National Pharmaceutical Pricing Authority fixes a ceiling price for them, and no one may sell above it (plus GST). Everything else is **non-scheduled**: the maker fixes the MRP, and the only rule is that it cannot rise by more than 10% in 12 months.

## How intervention works today

Instead of capping everything, the government uses Trade margin rationalisation and the emergency power in Paragraph 19 of the DPCO. A trade margin is the gap between what a stockist or retailer pays and what the patient pays. Capping it leaves the maker free to set its own price but stops huge mark-ups down the chain.

## The argument in court

The bench asked why the whole range of medicines cannot be controlled, and cited a saline drip with an MRP of ₹15 sold for ₹270. The Centre replied that the 2012 policy must balance affordability against innovation, competition, industry growth and jobs, and that full control is a deliberate choice it has not made. Hospitals said medicine margins pay for costs that government and insurance reimbursements do not cover.

The open question for the Court is whether this policy choice is one for judges at all. That links the story to the Right to health under Article 21, which the Court has read into the right to life.

## Sources

- https://www.livelaw.in/top-stories/why-most-medicines-kept-out-of-price-control-regime-supreme-court-questions-centre-reserves-order-556206
- https://www.nextias.com/ca/headlines-of-the-day/28-10-2026/87479
- https://openthemagazine.com/india/why-only-cancer-drugs-supreme-court-questions-medicine-markups-seeks-wider-scrutiny
- https://newsable.asianetnews.com/india/supreme-court-questions-centre-on-high-mrp-of-life-saving-medicines-articleshow-2rmc59f
- https://morungexpress.com/nppa-has-fixed-retail-prices-of-3845-new-medicines-govt
- https://eparlib.sansad.in/bitstream/123456789/2983513/1/AU833_aIKmjv.pdf