Centre Limits Cancer Drug Margins To 30%, Projects Rs 2,500 Cr Savings

The Centre has approved a cap on trade margins for non-scheduled anti-cancer medicines, limiting them to 30% of the maximum retail price (MRP). The move could reduce prices by up to 70% for affected medicines and save cancer patients around Rs 2,500 crore annually, the government said.

The decision extends price protection to medicines outside the existing list of drugs subject to government-fixed ceiling prices. According to the Department of Pharmaceuticals, an expert committee under the Directorate General of Health Services will finalise the list of medicines covered by the measure.

The National Pharmaceutical Pricing Authority (NPPA) will then take a decision and issue the notification. The actual price reduction will depend on the medicines covered and their existing trade margins; the government’s estimate does not mean every cancer drug will become 70 per cent cheaper.

Government Targets High Mark-ups In Cancer Drug Supply Chain

The decision follows an NPPA analysis of market data which found that non-scheduled anti-cancer medicines carried an average price mark-up of around 170%, reaching 700% or more in some cases.

The Department of Pharmaceuticals said prices also varied significantly depending on whether medicines were purchased from retail pharmacies, hospital pharmacies or online pharmacies.

The government said the high margins on expensive cancer medicines added substantially to patients’ treatment costs. The new cap is intended to limit mark-ups across the supply and sale chain and reduce out-of-pocket expenditure.

The measure will cover eligible branded and generic medicines, domestically produced and imported drugs, and patented and non-patented products.

Move Builds On Earlier Price-Control Intervention

The latest decision builds on a February 2019 intervention, when the NPPA capped trade margins on 42 selected non-scheduled anti-cancer drugs under Paragraph 19 of the Drugs (Prices Control) Order, 2013. The government said that measure reduced maximum retail prices by up to 91 per cent, with reported annual savings of Rs 984 crore across 526 brands.

To prevent shortages following the latest intervention, manufacturers of covered non-scheduled anti-cancer medicines will be required to maintain current production levels, according to the government.

The measure is intended to improve affordability while ensuring continued availability of medicines needed by patients undergoing cancer treatment. Its impact will become clearer once the covered drug list is finalised and the NPPA issues its notification.