₹8,447 Crore in Medicine Overcharging Dues Still Unpaid as Supreme Court Asks for Wider Price Controls
On October 12, 2026, the Centre told the Supreme Court it will cap trade margins (the profit that wholesalers and chemists can add) on anti-cancer medicines at 30% of the MRP. The decision was taken at a National Pharmaceutical Pricing Authority (NPPA) meeting on October 8.
A Bench of Justices Vikram Nath and Sandeep Mehta asked why such limits cannot cover other medicines and medical products. It asked the government to work out wider price controls. The next hearing is on October 27.
As of March 31, 2026, the NPPA had demanded ₹10,029.8 crore (including interest) from companies for overcharging, that is, selling above the legally fixed price. Only ₹1,582.4 crore has been recovered. ₹8,447.4 crore, about 84% of the total, is still outstanding.
More than ₹5,800 crore of the unpaid amount is stuck in court cases. About ₹200 crore has been sent to District Collectors for recovery, and ₹2,369.3 crore is still being processed.
Overcharging cases peaked at 268 in 2015-16. In 2025-26, the NPPA recorded 133 cases.
There is no system to pay back patients who were overcharged. Patients can complain through the NPPA's Pharma Jan Samadhan portal and the Pharma Sahi Daam app.
Drug Price Regulation in India: DPCO and NPPA
India controls the prices of many medicines so that ordinary people can afford them. The rulebook is the Drugs (Prices Control) Order, 2013 (DPCO), issued under the Essential Commodities Act, 1955. The body that fixes prices and enforces the rules is the National Pharmaceutical Pricing Authority (NPPA), set up in 1997 under the Department of Pharmaceuticals. When a company sells a medicine above the allowed price, the NPPA demands the extra money back, with interest.
The data show that the NPPA can raise demands, but most of the money stays unpaid for years, mainly because companies challenge the demands in court. This weakens the deterrent effect of price control and is part of why the Supreme Court wants stronger and wider rules.
Trade Margin Rationalisation (TMR): A New Pricing Tool
Trade Margin Rationalisation limits how much the middlemen in the supply chain can add to a medicine's price. Instead of fixing the final price, the government caps the gap between the price at which the company first sells the medicine (the price to stockist) and the MRP. It is useful for costly medicines, like cancer drugs, where very large margins are common. In India it is applied by the NPPA using its special powers under Paragraph 19 of the DPCO 2013.
The new 30% cap on cancer drug margins is a TMR measure. The Supreme Court has asked why the same approach should not cover other medicines and medical devices, where patients also pay prices far above the supply price.
Out-of-Pocket Expenditure (OOPE) and Catastrophic Health Expenditure
Out-of-pocket expenditure is the money a family pays from its own pocket when it gets treatment: doctor fees, tests, hospital bills and medicines. It does not include money paid by the government or an insurer. When such spending is very large compared with a family's income, it is called catastrophic health expenditure, and it can push families into poverty.
Because medicines take a large share of what families pay for hospital care, overcharging hits household budgets directly. Recovering dues from companies does not reduce what patients already paid, which is why wider margin caps and better enforcement matter for lowering out-of-pocket spending.
- Total overcharging demand (as of March 31, 2026): ₹10,029.8 crore, including interest
- Realised: ₹1,582.4 crore; outstanding: ₹8,447.4 crore (about 84% of the total; more than five times the amount realised)
- Under litigation: more than ₹5,800 crore; with Collectors: about ₹200 crore; under process: ₹2,369.3 crore
- Pre-2009 cases: 731 cases, ₹4,764.75 crore demanded, ₹3,987.5 crore outstanding
- Highest cases in a year (2009-10 to 2025-26): 268 in 2015-16; 133 cases in 2025-26
- Highest outstanding year: 2015-16 (₹1,003.3 crore)
- Trade margin cap on anti-cancer drugs: 30% of MRP (Centre's statement to the Supreme Court, October 12, 2026)
- NPPA set up in 1997; DPCO 2013 issued under the Essential Commodities Act, 1955
- Medicine share of hospitalisation cost (2025): 19.4% rural, 14.9% urban