The Centre has approved a 30% cap on trade margins for non-scheduled anti-cancer medicines, targeting excessive mark-ups that have pushed up treatment costs, with the government estimating annual savings of Rs. 2,500 crore for patients.
The Department of Pharmaceuticals has asked an expert committee under the Directorate General of Health Services (DGHS) to recommend the list of medicines covered by the measure by October 14, according to details of a National Pharmaceutical Pricing Authority (NPPA) meeting reported on Friday. The NPPA will subsequently issue the notification implementing the measure.
The government expects the intervention to reduce maximum retail prices (MRPs) by 20-70%, depending on the existing trade structure and mark-ups for individual medicines. The measure will cover branded and generic drugs, domestically manufactured and imported products, and patented and non-patented medicines.
The government announcement on October 8 marks a shift from the earlier proposal to a formally approved policy. However, the final list of covered medicines and the corresponding revised prices have yet to be notified.
Cancer Drug Mark-Ups Reach 700%, NPPA Analysis Finds
The policy follows an NPPA analysis that found non-scheduled anti-cancer medicines carried average trade mark-ups of around 170%, with some reaching 700% or more. The authority also identified significant differences in prices and discounts across retail pharmacies, hospital pharmacies and online sellers.
The Supreme Court had also raised concerns about steep mark-ups in cancer medicines. During a hearing in September, it questioned a case in which a drug reportedly supplied to retailers for around Rs.2,700 carried an MRP of Rs.27,000, highlighting the gap between procurement costs and the prices charged to patients.
The government is invoking Paragraph 19 of the Drugs (Prices Control) Order, 2013, which allows intervention in extraordinary circumstances and in the public interest. Scheduled cancer medicines are already subject to government-set ceiling prices. The new measure extends price protection to non-scheduled drugs that fall outside that framework.
Government Cites Rs 2,500 Crore in Potential Annual Savings
The government estimates that the expanded controls could save patients approximately Rs. 2,500 crore annually by reducing out-of-pocket spending on cancer treatment.
The intervention builds on a 2019 decision under which the NPPA capped trade margins on 42 selected non-scheduled anti-cancer medicines. According to the government, that exercise reduced MRPs by as much as 91% across 526 brands and generated reported annual savings of Rs. 984 crore.
Manufacturers of medicines covered by the new measure will be required to maintain their existing production levels to guard against supply disruptions. The policy is intended to lower prices without making affected treatments harder to obtain.
However, the expected savings are not guaranteed reductions for every patient. The actual price change will depend on which medicines make the final list, their existing MRPs and the margins currently charged through the supply chain.
There are also questions about whether trade-margin controls alone can make expensive cancer therapies affordable. The Economic Times reported that the Working Group on Access to Medicines and Treatments had questioned the effectiveness of the approach, citing medicines whose costs remained high despite earlier margin restrictions.
The immediate next step is the expert committee’s October 14 deadline. The final list and NPPA notification will determine which medicines are covered and when patients can expect revised prices.
Arun Kumar N