The Union government has moved to cap trade margins on 110 expensive cancer medicines, including approximately 35 patented drugs. This regulatory step aims to curb the significant price markups currently observed in the market, with officials indicating that the initiative could lead to a reduction in maximum retail prices (MRP) by up to 70 percent. While the final list of drugs remains under development, the policy will cover branded, generic, domestically manufactured, and imported versions of these medications.
Trade margin rationalisation (TMR) addresses the price difference between what a stockist pays for a drug and the final MRP charged to a consumer, a gap that can sometimes reach 1,000 percent of the cost at the first point of sale. Under the proposed framework, the government will cap the percentage markup rather than fixing individual prices for every formulation or dose. According to the National Pharmaceutical Pricing Authority (NPPA), the proposal seeks to cap the trade margin at 30 percent of the MRP. This approach mirrors a 2019 pilot program that resulted in a 91 percent reduction in the MRP for 42 selected cancer drugs.
Health officials noted that the intervention is essential due to the rising cancer burden in India and the limited accessibility of advanced therapies. A study from the Tata Memorial Hospital previously highlighted that only 1.6 percent of patients requiring such treatments could access them, largely due to high costs. The Supreme Court has also previously noted concerns regarding the high markup of some cancer medications.
The selection criteria for the 110 drugs prioritize expensive medications frequently used for cancer treatment. Authorities clarified that the 30 percent cap is intended to balance affordability for patients while ensuring that margins remain viable for pharmaceutical companies to cover marketing costs. The final implementation follows deliberations under Paragraph 19 of the Drugs (Prices Control) Order, 2013.
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