Centre caps trade margins on 137 cancer drugs, prices likely to fall by up to 70%
NEW DELHI: The Centre has capped trade margins at 30% for 137 non-scheduled anti-cancer drugs, seeking to curb markups of up to 700% in some cases and reduce retail prices by as much as 70%.
The National Pharmaceutical Pricing Authority (NPPA), under the Department of Pharmaceuticals, notified the cap on Saturday, with the revised prices to take effect on 9 November. The government invoked extraordinary public-interest powers to bring the drugs under tighter price regulation, following mounting scrutiny of excessive charges for life-saving treatments.
The move follows the Supreme Court’s criticism of hospital profiteering, including cases in which a cancer medicine bought by retailers for ₹2,700 was sold at a maximum retail price (MRP) of ₹27,000. The court described such instances as “broad daylight dacoity” and “carnage.”
The order was issued through a Gazette notification dated 17 October under Paragraph 19 of the Drugs (Prices Control) Order (DPCO), 2013, following directions from the Department of Pharmaceuticals.
Mint had reported on 8 October about the government’s plan to reduce cancer drug prices after the Supreme Court’s intervention. Earlier, on 15 September, Mint had reported on steep markups on medical consumables charged to patients by private hospitals.
High-cost therapies
The list of 137 drugs includes widely prescribed cancer treatments, among them the immunotherapies and targeted therapies pembrolizumab, nivolumab, palbociclib, osimertinib, ribociclib, bevacizumab, atezolizumab, daratumumab, olaparib, and enzalutamide.
The restrictions apply to formulations containing any of the listed drugs, whether used alone or in combination, across all strengths, dosage forms and routes of administration. They also apply when the drugs are prescribed for other therapeutic uses. Patented medicines are covered unless specifically exempted under Paragraph 32 of the DPCO.
The government expects the measure to reduce MRPs by up to 70%, depending on existing price structures. The stated objective is to curb excessive margins across distribution and retail channels while protecting legitimate manufacturer revenues and preventing artificial shortages.
In February 2019, the Centre had capped trade margins on 42 non-scheduled anti-cancer medicines across 526 brands under Paragraph 19 of the Drugs (Prices Control) Order (DPCO), 2013.
That intervention delivered price cuts of up to 91% on MRP and estimated recurring annual savings of ₹984 crore for patients, according to the officials.
Margins under scrutiny
Minutes of an NPPA meeting, held on Saturday, cited evidence of substantial markups and price disparities in the non-scheduled oncology market. The authority said extraordinary circumstances warranted urgent intervention under Paragraph 19 of the DPCO, 2013, to address market distortions, curb profiteering and ensure fair and affordable prices.
The minutes also noted that non-scheduled anti-cancer drugs carry an average trade markup of approximately 170%, with markups of up to 700% in some cases. They also cited substantial variations in transaction prices across retail, hospital and e-pharmacy channels, including differences in discounts from MRP.
Pharmarack market analytics cited in the proceedings put the domestic anti-cancer drug market at about 225 drugs and 500 formulations, with annual turnover of approximately ₹12,500 crore.
Before the intervention, price ceilings covered only a fraction of that market. Under the National List of Essential Medicines (NLEM) 2022, scheduled oncology formulations covered 63 drugs, accounting for roughly ₹2,250 crore in turnover.
The remaining ₹10,250 crore and plus comprised non-scheduled formulations outside direct ceiling-price controls, leaving scope for steep markups across supply chains and private hospitals.
How the cap works
Under the notified formula, the trade margin is capped at 30% of the MRP, excluding goods and services tax (GST). This corresponds to a markup of 42.86% on the price to stockist or distributor (PTS/PTD), calculated using March 2026 reference net sales realizations.
The notification illustrates the calculation with a medicine carrying a PTS of ₹70 and an existing MRP of ₹300, plus GST. Under the new formula, its revised maximum allowable MRP would be ₹100, plus applicable GST.
For drugs launched after 31 March 2026, the formula will use the current PTS. The new order supersedes existing orders fixing ceiling prices under Paragraph 4 or retail prices under Paragraphs 5 and 15 for the 137 drugs.
Compliance and enforcement
Manufacturers must submit revised MRP filings to the NPPA and state drug controllers within seven days, issue revised Form V price lists through the Integrated Pharmaceutical Database Management System (IPDMS), and circulate the revised prices widely.
Failure to submit price revisions within the deadline will be treated as non-reduction of MRP, triggering recovery proceedings for overcharged amounts and penal interest under the DPCO, 2013, read with the Essential Commodities Act, 1955.
Companies must also advertise the price reductions in leading national newspapers within seven days, establish dedicated DPCO sections on their corporate homepages, and disclose batch-wise stock and production positions.
Hospitals and pharmacies must charge and display only the revised prices from 9 November.
Safeguards against shortages
The NPPA has directed manufacturers to maintain existing production levels to prevent artificial shortages. Drug makers must obtain prior permission before reducing average monthly output and provide at least six months’ advance notice in Form IV before discontinuing production or imports.
Direct supplies to hospitals will be treated as sales to a stockist, with the hospital or medical institution’s status determined using invoice data.
Patient assistance programmes that provide medicines entirely free of charge are conditionally exempt, subject to strict undertakings and verifiable patient records.
