Centre caps trade margins on non-scheduled anti-cancer drugs at 30% of MRP

The Union government has decided to cap trade margins at 30 per cent of the maximum retail price for all non-scheduled anti-cancer medications, a measure designed to curb excessive mark-ups and lower out-of-pocket expenses for patients. Official sources stated that the policy covers both branded and generic versions, domestic and imported supplies, as well as patented and non-patented formulations.

The intervention targets a sector where market data compiled by the National Pharmaceutical Pricing Authority showed average trade mark-ups running at approximately 170 per cent, with specific formulations exhibiting price inflation reaching up to 700 per cent. Officials noted that these steep gaps between procurement costs and retail pricing placed a severe fiscal strain on households, where out-of-pocket spending accounts for roughly 75 per cent of total treatment expenses.

The policy shift follows sharp observations made by the Supreme Court regarding wide disparities between prices charged to retailers and the final MRP printed on packaging. During recent judicial proceedings, the bench highlighted instances where medicines supplied to retailers at ₹2,700 were retailed to consumers at ₹27,000, prompting the administration to examine corrective pricing frameworks.

Under the new framework, an expert committee operating under the Directorate General of Health Services will finalise the exact inventory of medicines to be covered under the margin cap. Once the compilation is completed, the National Pharmaceutical Pricing Authority will issue formal notifications to enforce the ceiling.

The broader anti-cancer therapeutics segment comprises approximately 225 drugs and 500 formulations, generating an annual market turnover of roughly ₹12,500 crore, of which scheduled medications constitute about ₹2,250 crore. Government estimates project that the latest regulatory ceiling will drive down retail prices by up to 70 per cent, yielding cumulative annual savings of ₹2,500 crore for patients nationwide.

Administrators drew precedent from a similar regulatory exercise conducted in February 2019, when trade margins on 42 selected non-scheduled cancer drugs were restricted using extraordinary provisions under the Drug Price Control Order of 2013. That prior action led to price drops of up to 91 per cent and delivered substantial savings across hundreds of commercial brands.

To safeguard uninterrupted supply chains and prevent stock shortages, manufacturers of the affected formulations have been instructed to maintain their current levels of production while the new administrative parameters are rolled out across distribution networks.