The Centre has finalised trade margin caps for 137 non-scheduled anti-cancer drugs at 30 per cent of the maximum retail price (MRP) in a bid to allow the sale of oncology therapies at affordable rates through a gazette notification.
The list will include both patented and non-patented drugs based on the list recommended by an expert committee (EC) under the Directorate General of Health Services (DGHS), according to a statement by the National Pharmaceutical Pricing Authority (NPPA).
According to a gazette notification dated October 17, the list of trade margin-capped cancer drugs includes Nivolumab, Olaparib, Denosumab and Topotecan. The move, however, will exclude drug quantities supplied under Patient Assistance Programmes (PAP) run by drug manufacturers for individual patients.
The NPPA added that the list would be updated periodically, with the trade margin being incorporated under Paragraph 19 of the Drugs (Prices Control) Order (DPCO), 2013.
Paragraph 19 allows the NPPA to revise or fix ceiling and retail prices of any drug in extraordinary circumstances and in the public interest.
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“The Authority considered it necessary to cap the trade margin at 30 per cent of MRP, excluding GST, corresponding to a mark-up of 42.86 per cent on the Price to Stockist/Price to Distributor (PTS/PTD), to retain a reasonable trade margin while preventing excessive mark-ups,” the minutes of the 284th NPPA meeting held on October 16 stated.
The NPPA's intervention is expected to bring down the maximum retail prices (MRPs) of the identified non-scheduled anti-cancer drugs by up to 70 per cent, depending on their existing price structures, and generate estimated annual savings of Rs 2,500 crore.
The revised prices will become effective from November 9, 2026. “Manufacturers will be required to display the price lists on their website and widely disseminate to all retailers and hospitals,” officials aware of the matter told Business Standard.
They added that all manufacturers would be required to inform the NPPA of their revised prices within seven days of publication of the gazette notification.
“Since substantial supply of anti-cancer drugs is directly made to the hospitals and medical institutions, they are required to monitor the MRPs of formulations and to ensure compliance,” a gazette notification dated October 17 stated.
It added that state drug controllers must take necessary steps to ensure compliance by manufacturers and dealers, including retailers, hospitals and medical institutions.
Similarly, pharmaceutical companies will be required to maintain current production and supply levels for the notified formulations to ensure timely and uninterrupted access for patients.
“Manufacturers not complying with the provisions of this order shall be liable to deposit the overcharged amount along with interest thereon under the provisions of the DPCO 2013 read with Essential Commodities Act, 1955,” the notification added.
Officials had earlier told Business Standard that the EC had found trade margins ranging from 170 to 700 per cent for non-scheduled cancer drugs at various outlets.
Non-scheduled drugs are pharmaceutical formulations not subject to price ceilings under the Drugs (Prices Control) Order (DPCO), 2013. Manufacturers of such formulations and devices can increase prices by up to 10 per cent over a rolling 12-month period. These drugs account for an estimated 82 per cent of India's domestic pharmaceutical market.
The decision marks a first step towards trade margin rationalisation (TMR), even as the Department of Pharmaceuticals (DoP) and the NPPA hold industry consultations on price mark-ups for essential medicines.
Under TMR, the difference between the price charged by a manufacturer to a distributor and the price paid by a consumer could be regulated, unlike conventional price controls that fix a ceiling price for a formulation.
The Centre had earlier capped trade margins for 42 cancer drugs in 2019, resulting in reported annual savings of Rs 984 crore across 526 brands.
Officials said margin capping could eventually be extended beyond cancer drugs to other non-scheduled formulations, medical consumables and devices such as intravenous (IV) kits and catheters.
The move also comes amid Supreme Court scrutiny of high mark-ups on essential medicines.
A Bench comprising Justices Vikram Nath and Sandeep Mehta has questioned the regulatory distinction between scheduled and non-scheduled medicines under the DPCO and whether medicines classified as non-essential should remain outside price control mechanisms.