The government has approved a 30% trade-margin cap on non-scheduled anti-cancer drugs. Here is what that means for patients.

A trade margin is the difference between a medicine's purchase price inside the supply chain and the price at which it is sold onward. Distributors, wholesalers and hospitals each take a share.

The cap limits that total margin to 30% of the printed maximum retail price. NPPA analysis found average markups of around 170% on these drugs, with some exceeding 700%.

The cap applies to branded and generic, domestic and imported, patented and non-patented non-scheduled anti-cancer medicines. Drugs already under fixed ceiling prices are excluded.

Prices are expected to fall 20 to 70% depending on current margins, with estimated annual patient savings of about Rs. 2,500 crore.

The cap takes effect after a DGHS expert committee finalises the medicine list and the NPPA issues its notification. The cap targets margins in the chain, not factory prices.