New Delhi, October 23: Cancer patients across India could see medicine prices fall by 20 to 70 per cent under a proposed government cap on trade margins, with the Centre estimating annual savings of approximately ₹2,500 crore. The Union government has informed the Supreme Court that it plans to limit trade margins on anti-cancer medicines to 30 per cent of their maximum retail price (MRP), subject to a regulatory process.
In an affidavit filed through the Department of Pharmaceuticals, the Centre said it had decided to pursue trade margin rationalisation following consultations on medicine affordability, availability and the impact on pharmaceutical distribution.
The government disclosed the proposal in response to a public interest litigation filed by Dr Sanjay Kulshrestha seeking stronger regulation of medicine prices and pharmaceutical trade margins.
The Ministry of Health and Family Welfare constituted an expert committee on October 9 under the Director General of Health Services to identify medicines eligible for the proposed cap. The panel was expected to submit its recommendations within 10 to 15 days.
The proposed list would include approved cancer medicines while excluding inexpensive drugs. The government said it could revise the list periodically to reflect market developments and public health requirements.
Once the committee submits its recommendations, the National Pharmaceutical Pricing Authority (NPPA) will consider them and issue appropriate pricing directions. Manufacturers would then receive instructions to pass the resulting reductions on to patients.
The Centre cited its 2019 intervention, when the NPPA capped trade margins at 30 per cent for 42 selected non-scheduled anti-cancer medicines. According to company-reported figures, that decision reduced the MRP of 526 brands and generated estimated annual patient savings of ₹984 crore.
However, the government acknowledged concerns raised by pharmaceutical industry associations over the potential consequences of extending the restrictions.
Smaller manufacturers, distributors and retailers, particularly those serving remote areas, could face difficulties if reduced margins affect employment or the viability of medicine distribution, the affidavit noted.
It also identified low-value medicines, products requiring specialised storage or handling, fragile medicines and slow-moving drugs as categories where distribution costs could justify higher margins.
The Centre referred to existing price-control measures under the Drugs (Prices Control) Order, 2013, including interventions involving diabetes and cardiovascular medicines, coronary stents, knee implants and medical devices during the Covid-19 pandemic.
It also cited the Pradhan Mantri Bhartiya Janaushadhi Pariyojana, operating through approximately 19,000 Jan Aushadhi Kendras, and AMRIT pharmacies offering discounted essential medicines.
The proposed cancer drug cap has not yet taken effect. Its implementation will depend on the committee’s recommendations and subsequent regulatory directions.
