Govt submits proposal to cap trade margins on anti-cancer drugs at 30% | Health News

The Centre on Monday submitted a proposal to limit trade margins on listed anti-cancer drugs to 30 per cent of their maximum retail price (MRP), NDTV Profit reported.

Last week, the government announced its decision to cap trade margins on all non-scheduled anti-cancer drugs at 30 per cent of the MRP. The move could bring down the MRPs of cancer medicines by up to 70 per cent and save consumers an estimated ₹2,500 crore annually.

The proposal aims to prevent excessive mark-ups across the supply chain, make life-saving medicines more affordable and ensure their continued availability, officials told Business Standard last week.

Govt identifies expensive cancer drug brands

A committee set up by the Directorate General of Health Services (DGHS) is assessing how many brands would fall under the proposed price cap.

The committee has found trade margins of 170-700 per cent on cancer medicines at different retail outlets, an official told Business Standard.

Non-scheduled drugs are medicines that do not fall under the price ceilings prescribed by the Drugs (Prices Control) Order (DPCO), 2013. Manufacturers of these formulations and medical devices can raise their prices by up to 10 per cent over a rolling 12-month period.

These products account for an estimated 82 per cent of India’s domestic pharmaceutical market.

Centre considers wider trade margin regulation

Under TMR, regulators can control the difference between the price at which a manufacturer sells a product to a distributor and the price ultimately paid by consumers. This differs from conventional price controls, which set a maximum price for a particular drug formulation.

The government may eventually extend margin caps beyond cancer medicines to other non-scheduled formulations, medical consumables and devices, including intravenous (IV) kits and catheters.

In August, the DoP told the Parliamentary Standing Committee on Chemicals and Fertilisers that it was examining a proposal to include TMR provisions in the DPCO. However, it had not set a timeline for introducing a broader framework.

The Centre had introduced trade margin caps for 42 cancer drugs in 2019. The measure reportedly generated annual savings of ₹984 crore across 526 brands. The latest proposal could expand the scope of such controls, although the government is yet to announce a timeline for extending them to other products.