14 October 2026 (Navroze Bureau) The Indian government has decided to cap trade margins on selected non-scheduled cancer medicines at 30% of their maximum retail price (MRP), in a move aimed at reducing treatment costs for patients. However, the Supreme Court has questioned why similar measures are not being considered for other medicines and medical devices, highlighting concerns over large differences between procurement prices and the prices charged to patients.
The decision was presented to the Supreme Court on October 12, 2026, by Solicitor General Tushar Mehta. The government said it would notify the list of cancer medicines covered by the proposed regulation and update it periodically according to market conditions and public health needs. The National Pharmaceutical Pricing Authority (NPPA) approved the proposal at a meeting on October 8.
According to the government, the measure could reduce the maximum retail prices of covered medicines by an estimated 20% to 70% and help patients save approximately ₹2,500 crore annually. The final list of medicines is to be determined with the assistance of an expert committee under the Directorate General of Health Services. The list had not yet been formally notified in the reports available on October 13.
Why Has the Government Introduced the 30% Cap?
The measure is intended to address high markups on cancer medicines, which can significantly increase the financial burden on patients and their families. While certain scheduled medicines are already subject to government-set ceiling prices, non-scheduled medicines have a different pricing framework.
Under trade margin rationalisation, the government limits the margin added along the supply chain rather than fixing an entirely new price for every brand and formulation. The new decision aims to bring down the MRPs of selected non-scheduled cancer medicines while allowing a reasonable margin for distributors and retailers.
The issue gained attention after concerns were raised about cancer medicines being supplied to retailers at prices far below their printed MRPs. In an example discussed during earlier Supreme Court proceedings, a medicine reportedly available to retailers for around ₹2,700 carried an MRP of approximately ₹27,000.
Such price differences have raised questions about transparency in pharmaceutical pricing and the amount patients ultimately pay for essential treatment. The government’s proposed cap seeks to address these concerns, although its actual impact will depend on the final list of medicines and implementation of the rules.
Supreme Court Questions Why Only Cancer Medicines Are Covered
While examining the government’s decision, a bench comprising Justices Vikram Nath and Sandeep Mehta questioned why the proposed restrictions were limited to cancer medicines. The court asked the Centre to explain why similar scrutiny could not extend to other medicines and medical devices where substantial gaps exist between prices charged to retailers and MRPs.
The bench cited the example of an Indian-made cardiac stent reportedly supplied to retailers for around ₹5,000 but carrying an MRP of ₹25,000. The judges also raised concerns about pricing disparities involving hospital consumables and questioned whether excessive trade margins could influence medical decisions.
The court’s observations highlighted a wider issue: cancer medicines are only one part of the pharmaceutical market, while patients also face expenses for medicines, medical devices and hospital supplies used in treating other conditions.
The court has sought a broader examination of drug pricing rather than treating the cancer drug cap as a complete solution. The matter is scheduled for further hearing on October 27, 2026.
Why Is the Government Cautious About Regulating Every Medicine?
The Centre has argued that applying a uniform trade margin cap to every medicine may not be practical. Pharmaceutical products differ in manufacturing costs, distribution requirements, storage conditions and sales volumes. Some medicines require specialised handling or cold-chain facilities, while distribution in remote areas can be more expensive.
According to the government’s position, excessive intervention could affect the availability of certain medicines, particularly where supply costs are high or sales volumes are low. The Centre has therefore maintained that pricing regulation must balance affordability for patients with the need to keep medicines available in the market.
The Supreme Court, meanwhile, has pressed the government to explain how its approach protects patients from excessive prices. The ongoing proceedings are examining how pricing controls could be designed to address high markups without creating unintended problems in the supply chain.
What Does the Decision Mean for Cancer Patients?
If implemented as proposed, the 30% trade margin cap could lower the listed prices of selected non-scheduled cancer medicines. The projected annual savings of around ₹2,500 crore could reduce out-of-pocket expenses for patients who need these treatments.
However, the expected reduction will not necessarily apply equally to every cancer medicine. The government still needs to finalise and notify the medicines covered by the measure. Patients should therefore check the applicable price of their prescribed medicine with a licensed pharmacy or healthcare provider rather than assume that every cancer drug will immediately become cheaper.
The policy also does not eliminate the broader cost of cancer care, which can include diagnostic tests, surgery, hospitalisation, radiation therapy and follow-up treatment. Its direct focus is the trade margins on medicines included in the final list.
What Happens Next?
The next stage will involve finalising the covered medicines and implementing the margin restrictions. The Supreme Court’s upcoming hearing may also bring further attention to whether other medicines and medical devices require additional pricing safeguards.
The broader challenge for policymakers is to make essential treatment more affordable while ensuring that medicines remain accessible across India. The outcome of the proceedings could influence future discussions about transparency, trade margins and price regulation throughout the pharmaceutical sector.
For now, the cancer drug decision represents a targeted pricing intervention, while the Supreme Court’s questions have put the wider issue of medicine affordability back in focus.