The Union government has decided to cap trade margins on 110 expensive cancer medicines, including around 35 patented drugs, in a move officials say could bring down their maximum retail prices by up to 70 per cent. The final list is still being drawn up, but it is expected to cover branded, generic, domestically manufactured and imported versions of the chosen drugs.

The decision, approved in principle by the National Pharmaceutical Pricing Authority (NPPA), follows a 2019 pilot in which the same mechanism cut the MRP of 42 cancer medicines by as much as 91 per cent. Market analysis presented at the recent NPPA meeting showed that non-scheduled anti-cancer drugs carry an average trade mark-up of about 170 per cent, rising to 700 per cent in some cases. Regulators expect the move to reduce prices broadly in the 20-70 per cent range and generate annual savings of roughly Rs 2,500 crore.

How trade margin rationalisation works

The trade margin is the gap between the price at which a medicine is sold to stockists and the MRP printed on the pack. Under trade margin rationalisation (TMR), the government caps the percentage mark-up instead of fixing the price of every formulation and brand. The NPPA has approved a 30 per cent cap: a medicine sold to the stockist for Rs 70 could carry an MRP of only Rs 100. The drugs concerned are non-scheduled – outside the National List of Essential Medicines – so their MRPs are currently free to rise up to 10 per cent a year.

Why the step was needed

India’s cancer burden is rising, and targeted and immunotherapy drugs that improve survival remain out of reach for most patients. A real-world study from Tata Memorial Hospital found that only 1.6 per cent of patients who needed such therapies could access them, with cost among the biggest barriers. The issue has reached the courts: the Supreme Court has questioned near ten-fold mark-ups on some cancer drugs. Drugs considered for the list are expensive, approved for cancer treatment in India and used frequently; the 2019 list included chemotherapy drugs such as cytarabine and mitoxantrone and immunotherapy medicines such as osimertinib and ribociclib. Cancer drugs have an annual turnover of about Rs 12,500 crore, but scheduled drugs under price control account for only around Rs 2,250 crore.

Will prices really fall?

Not everyone is convinced. Experts warn the system can be gamed because there is no control on the price to the stockist – one expert described how a company could sell vials at an inflated price while offering others free, keeping effective prices high while obeying the 30 per cent cap. K M Gopakumar of the Working Group on Access to Medicines and Treatments pointed out that ribociclib’s monthly cost rose from Rs 58,000 in 2022 to Rs 78,000 in 2025 despite the 2019 capping. Chemist associations, however, welcomed the move for bringing transparent, uniform margins and urged a similar exercise for other high-cost medicines.