Centre caps margins on cancer drugs, prices may fall up to 70%

The Centre has capped trade margins at 30% for all non-scheduled anti-cancer drugs. The move follows Supreme Court scrutiny of steep mark-ups and is expected to lower treatment costs.The Centre has announced a 30% cap on trade margins for all non-scheduled anti-cancer drugs, a move that could reduce the maximum retail prices (MRPs) of some cancer medicines by up to 70% and save patients an estimated Rs 2,500 crore a year.The measure will cover branded and generic medicines, as well as domestic and imported, patented and non-patented anti-cancer drugs that fall outside the scheduled price-control framework.The government said the decision is aimed at curbing excessive mark-ups in the medicine supply chain and making life-saving cancer treatment more affordable, while ensuring that the medicines remain available.The announcement comes against the backdrop of a sharp intervention by the Supreme Court last month over the pricing of cancer medicines, particularly the huge gap between the price at which medicines reach retailers and the MRP charged to patients. SC HAD FLAGGED MARK-UPSOn September 29, a bench of Justices Vikram Nath and Sandeep Mehta questioned the Centre over a cancer drug that was reportedly supplied to retailers for around 2,700 but carried an MRP of Ra 27,000 - a nearly ten-fold difference.The court questioned why a uniform margin could not be considered for medicines and asked the government to examine the issue. The Bench also raised concerns about corporate hospitals requiring patients to buy medicines from their in-house pharmacies, particularly when treatment is being reimbursed through government schemes.The court had floated the possibility of a 16% margin framework, similar to the retailer margin used in the price-control mechanism for scheduled formulations. The court, however, had not ordered a nationwide 16% cap. The matter is scheduled to come up again on October 12.The government's latest move instead extends the existing Trade Margin Rationalisation (TMR) approach to the wider universe of non-scheduled cancer medicines, with the margin fixed at 30%.There is already precedent for the approach. In 2019, the National Pharmaceutical Pricing Authority (NPPA) capped trade margins at 30% for 42 non-scheduled anti-cancer medicines. The government says that intervention reduced the MRPs of 526 brands by an average of around 50%, generating estimated annual savings of about 984 crore for patients.The government estimates that the expanded intervention could result in MRP reductions of as much as 70%, depending on the existing trade margins, with total annual savings of around 2,500 crore.The move also comes as the government continues to use multiple mechanisms to bring down cancer treatment costs. As of March 2026, NPPA had effective ceiling prices for 131 anti-cancer drugs, while the government has also used customs-duty reductions and schemes such as Jan Aushadhi to improve affordability.- Ends