NPPA Proposes 30% Trade Margin Cap On Cancer Drugs To Improve Affordability

The National Pharmaceutical Pricing Authority (NPPA) has given in-principle approval to a proposal to cap trade margins at 30% on identified non-scheduled anti-cancer medicines, in a move aimed at reducing treatment costs and easing the financial burden on patients.

The decision was taken at the NPPA’s 151st meeting on October 8 under the Drugs (Prices Control) Order (DPCO), 2013. According to the authority, trade margins on certain cancer medicines have reached as high as 700%, while the average markup on non-scheduled anti-cancer medicines is around 170%.

The proposed cap could reduce maximum retail prices by 20% to 70%, depending on the existing pricing structure and trade margins of individual medicines. The NPPA has estimated potential annual savings of around Rs 2,500 crore for consumers.

India’s anti-cancer medicines market comprises approximately 225 drugs and 500 formulations, with an estimated annual turnover of Rs 12,500 crore. While scheduled medicines are subject to government-mandated ceiling prices, non-scheduled medicines do not fall under the same ceiling-price mechanism.

The Department of Pharmaceuticals (DoP) has directed the NPPA to rationalise trade margins on non-scheduled anti-cancer medicines under Paragraph 19 of the DPCO, 2013, in the public interest. An expert committee under the Directorate General of Health Services (DGHS) of the Union Health Ministry has been asked to recommend the medicines to be covered, with its report expected by October 14.

The proposal builds on the NPPA’s 2019 intervention, when trade margins were capped at 30% for 42 non-scheduled anti-cancer drugs. According to the latest meeting minutes, the exercise reduced maximum retail prices by up to 91% for 526 brands and generated estimated annual savings of around Rs 984 crore.

The authority has cited excessive trade margins, significant price variations across pharmacies and hospitals, and the difficulty patients face in comparing medicine prices as reasons for renewed intervention.

However, activists in the sector have questioned whether a trade margin cap alone would make expensive cancer treatments affordable, particularly patented medicines.

“The NPPA's 30% cap on trade margins for non-scheduled cancer medicines will not make many of these drugs affordable, particularly patented ones,” said Jyotsna Singh and K. M. Gopakumar, co-convenors of the Working Group on Access to Medicines and Treatments.

They argued that medicine prices could continue to rise even after trade margins were capped, citing the example of ribociclib. According to them, its monthly cost increased from Rs 58,000 in 2022 to Rs 78,000 in 2025, despite the 2019 margin cap.

They also pointed to pembrolizumab, marketed as Keytruda, which they said costs around Rs 1,95,000 per vial.

“A margin cap cannot bring prices like these within reach of ordinary patients,” they said.

The advocates have called for stronger use of public health safeguards under the Patents Act, including government-use licensing under Section 100 and compulsory licensing, to facilitate generic production and help bring prices within reach of patients.

The proposed intervention is yet to be finalised. The list of medicines to be covered, the implementation timeline and the actual price reductions for individual products are yet to be announced.

The activists feel that while the proposed cap could curb excessive trade margins and provide relief to patients, the debate highlights a wider challenge in cancer care: ensuring that price regulation translates into sustained affordability, particularly for high-cost patented treatments.

For patients who require prolonged therapy, the final impact will depend not only on curbing distribution markups but also on the underlying prices of medicines and the availability of lower-cost alternatives, they said.