Centre caps margins on cancer drugs, prices to fall 70%
What's the story
The National Pharmaceutical Pricing Authority (NPPA) has announced a major move to make cancer treatment more affordable in India. The regulator has capped trade margins on 137 non-scheduled anti-cancer formulations at 30%. The new price regulation will come into effect from November 9, and is expected to bring down the retail prices of these life-saving medicines by as much as 70%.
Trade margin explained
Trade margins, non-scheduled drugs explained
Trade margin refers to the percentage of a drug's price retained by distributors, chemists, and hospitals selling it.
Non-scheduled medicines are those not listed in the National List of Essential Medicines (NLEM), meaning there is no price cap set by the government.
The NPPA's decision was approved during meetings held on October 16 and 17 under Paragraph 19 of the Drugs (Prices Control) Order (DPCO), 2013, as seen by Hindustan Times.
Price control
'Extraordinary circumstances warrant intervention'
The NPPA's decision comes in light of the need to tackle excessive trade mark-ups in non-scheduled anti-cancer drugs.
The authority concluded that "extraordinary circumstances warrant intervention under Paragraph 19 of DPCO, 2013 in public interest."
The 30% cap is calculated on the MRP excluding GST, which translates to a mark-up of 42.86% on the price to stockist or distributor (PTS/PTD).
Pricing formula
How to calculate revised MRP
The NPPA has devised a formula to calculate each drug's revised MRP.
It uses the PTS/PTD for March 2026 as a reference, derived from the manufacturer's net sales realization, revenue after discounts, and total quantity sold that month.
If a medicine had no sales in March, data from April 2025 to March 2026 will be used.
Sales to government buyers will not be included in this calculation.
Selection process
List of medicines recommended by expert committee
The list of 137 medicines was recommended by an expert committee from the Union Health Ministry.
The panel considered "all available information/data/viewpoints and all relevant options for ensuring affordability."
The list could be "updated periodically," depending on market developments and public-health considerations.
Notably, the policy covers both branded and generic medicines, imported as well as domestically manufactured ones.
Compliance requirements
Hospitals, companies directed to ensure affordability
Under the new order, hospitals that directly procure a large portion of their cancer drug supply from manufacturers are required to charge and display the revised prices.
Companies have been directed to maintain production and supply at current levels.
The NPPA's move is likely to make a significant difference in the affordability of cancer treatment in India.