Centre to cap trade margins on non-scheduled cancer drugs to 30% of MRP

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In a bid to make cancer treatment more affordable and reduce patients’ out-of-pocket expenditure, the Union government has decided to cap trade margins at 30% of the maximum retail price (MRP) for all non-scheduled anti-cancer drugs .

The measure will cover branded and generic drugs , domestically manufactured and imported medicines, and patented and non-patented products. An expert committee under the Directorate General of Health Services (DGHS) will finalise the list of medicines to be brought under the measure.

The National Pharmaceutical Pricing Authority (NPPA), which analysed market data, found that the average trade mark-up on non-scheduled anti-cancer medicines was around 170%, with mark-ups reaching up to 700% in some cases. It also found substantial differences between prices charged through retail, hospital, and online pharmacies.

The government said the decision was prompted by the high financial burden of cancer treatment. Around 75% of cancer treatment expenditure is estimated to be borne out of pocket.

The anti-cancer medicines market comprises around 225 drugs and 500 formulations, with an annual turnover of approximately ₹12,500 crore. Scheduled cancer medicines account for about ₹2,250 crore.

A senior official said that the government is drawing on the experience of a similar intervention in 2019, when the NPPA capped trade margins on 42 selected non-scheduled anti-cancer drugs by invoking its extraordinary powers under Paragraph 19 of the Drug Price Control Order, 2013. The exercise had reportedly resulted in price reductions of up to 91%, with annual savings of ₹984 crore across 526 brands.

The latest intervention is expected to result in price reductions of up to 70% of MRP and annual savings of around ₹2,500 crore, the government said.

Under the new framework, the trade margin will be capped at 30% of MRP, equivalent to 42.86% of the price to stockist.

“To ensure availability, manufacturers will be required to maintain their existing production level,” said the official.

The government said the measure would regulate trade margins rather than manufacturers’ selling prices or revenue, with the intervention aimed at reducing the margins retained across the distribution chain.

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