Supreme Court Raises Concern Over Steep Medicine Mark-Ups at Corporate Hospitals

The Supreme Court of India has questioned the sharp difference between the prices at which medicines reach retailers and the maximum retail prices charged to patients, particularly in corporate hospitals.

During a hearing on September 29, a bench of Justices Vikram Nath and Sandeep Mehta examined whether a uniform limit of 16% could be applied to medicine margins. The discussion followed the court’s earlier concern over a cancer medicine with a retailer price of about ₹2,700–₹3,000 but an MRP of ₹27,000.

Court Questions Wide Gap Between Retail Price and MRP

The Supreme Court focused on how such large differences between the Price to Retailer (PTR) and MRP can affect patients who have little choice over where they obtain medicines during hospital treatment.

The bench questioned why different pricing rules should apply to essential and non-essential medicines and asked whether a common 16% margin could be considered across pharmaceutical products. The issue remains under consideration and the court has not imposed such a cap at this stage.

Concerns Over In-House Hospital Pharmacies

The court also examined the purchasing practices of corporate hospitals.

According to the proceedings, patients admitted to some hospitals may be directed to obtain medicines from the facility’s own pharmacy. The bench raised concerns about situations in which hospitals may not accept medicines purchased from outside pharmacies or may decline to provide treatment assurances when patients bring their own drugs.

The issue becomes particularly significant for patients undergoing expensive or long-term treatments, where medicine costs can represent a substantial part of the overall bill.

Impact on Government Health Schemes

The Supreme Court also highlighted the potential effect of high medicine prices on publicly funded healthcare programmes.

Where treatment is reimbursed under government schemes, the court noted that taxpayers ultimately finance the medical expenses. If reimbursement is calculated using substantially inflated MRPs, the difference between procurement costs and the amount reimbursed could increase public expenditure.

The bench also pointed to a consumer-trust problem. If a medicine officially carries an MRP of ₹27,000 but a pharmacy offers it for around ₹3,000, patients may question whether the cheaper medicine is genuine.

Government Seeks Time to Examine the Issue

Solicitor General Tushar Mehta, appearing for the Centre, told the court that the government would need to work out a balanced approach.

The government has been asked to examine the issue with relevant officials before responding further. The court granted additional time for consultations rather than immediately introducing a new pricing rule.

The proceedings are part of a broader case concerning medicine pricing, generic prescriptions and regulation of medical costs. The Supreme Court’s official website lists Justice Vikram Nath and Justice Sandeep Mehta as sitting together in Court No. 2 on September 29, 2026.

Court’s Earlier Warning on Medicine Pricing

The latest hearing follows strong observations made by the Supreme Court earlier in September after it examined the pricing of cancer medicines.

The bench had highlighted an example where a medicine costing roughly ₹2,700 at the retailer level carried an MRP of ₹27,000. The court questioned how such a substantial price difference could be justified when patients are dependent on life-saving medicines.

The court also heard arguments that pharmaceutical manufacturers may not necessarily retain the entire difference between the retailer price and the final amount charged to patients, with significant margins potentially arising at later stages of the supply chain, including retail and hospital sales.

What Happens Next?

The Supreme Court has not yet ordered a nationwide 16% medicine-margin cap. Instead, it has asked the government to consider possible regulatory solutions and return with its response.

The matter is scheduled for further hearing on October 12, when the court is expected to consider the government’s position on medicine pricing and related issues.

Any eventual regulatory change could have implications for patients, hospitals, pharmacies, pharmaceutical companies and government-funded healthcare programmes. For now, the 16% figure remains a proposal raised during the court proceedings rather than an operative rule.