Centre to cap cancer drug trade margins at 30%, cut prices of 110 medicines

New Delhi: The Centre has decided to cap trade margins on all non-scheduled anti-cancer drugs at 30 percent of their maximum retail price (MRP), a move expected to lower prices of 110 medicines, including 35 patented drugs, government sources said on Thursday.

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Expected to take effect later this month, the measure will cover branded and generic medicines, whether domestically manufactured or imported, patented or non-patented. It aims to curb excessive mark-ups and improve affordability while ensuring continued availability, the sources said.

The government estimates that the decision will save cancer patients Rs 2,500 crore annually.

"The primary aim of the trade margin rationalisation (TMR) is to prevent misselling malpractices. There is a tendency to sell drugs having a bigger margin, and since anti-cancer drugs are more expensive than the rest, we wanted to cap the trade margins on them," the sources said.

The decision comes against the backdrop of the Supreme Court’s September 29 observations on steep mark-ups on cancer medicines.

Advocating a uniform 16 percent margin on all medicines, a bench of Justice Vikram Nath and Justice Sandeep Mehta told Solicitor General Tushar Mehta, appearing for the Centre: "This is carnage. Plain and simple. The cancer drug is priced at an MRP of Rs 27,000 despite being supplied to retailers for Rs 2,700."

Government sources, however, said the decision was unrelated to the ongoing case and had been under consideration since 2019.

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The health department has constituted a committee to finalise the list of medicines covered by the measure. Once finalised, the drugs will also be available at the revised prices in hospitals, the sources said.

Pricing interventions for other medicines would require a calibrated approach, they added.

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