A proposal to cap trade margins on cancer drugs has run into strong resistance from the pharmaceutical industry, even as policymakers argue the move could sharply cut treatment costs for patients.

The proposal, under discussion with inputs from the Niti Aayog and the Department of Pharmaceuticals, would limit the margins that distributors and retailers can charge on high-value oncology medicines. Officials say trade margins on some cancer drugs run several times the manufacturer’s price, inflating the final bill for patients.

Industry bodies have pushed back, warning that blunt margin caps could disrupt supply chains, discourage stocking of expensive drugs by smaller pharmacies, and hurt domestic manufacturers operating on thin margins. They have asked for a graded approach that distinguishes between patented and generic medicines.

Patient groups and oncologists largely support the move, pointing out that cancer treatment pushes lakhs of Indian families into debt every year. They argue that distribution margins, not manufacturing costs, are the biggest driver of inflated prices.

The government has previously capped prices of essential cancer drugs under the Drug Price Control Order, but trade margins on non-scheduled formulations remain largely unregulated.