Trade Margins Capped at 30% on 137 Anti-Cancer Drugs: How India Controls Medicine Prices
The National Pharmaceutical Pricing Authority (NPPA) capped the trade margin (the extra amount added by wholesalers and retailers between the factory price and the final price) at 30% of the MRP for 137 non-scheduled anti-cancer drugs. The notification was issued on 17 October 2026.
The order uses the emergency power in Paragraph 19 of the Drugs (Prices Control) Order (DPCO), 2013. It covers every non-scheduled formulation containing any of the 137 drugs, alone or in combination, in any strength or dosage form.
The 137 drugs were recommended by an expert committee under the Directorate General of Health Services (DGHS), which included oncologists (cancer specialists), hospital experts and officials. The list includes modern targeted and immunotherapy medicines such as pembrolizumab, nivolumab, osimertinib and bevacizumab.
Revised prices take effect from 9 November 2026. Manufacturers must report revised prices to the NPPA within 7 days of the Gazette notification and publish them on their websites. Hospitals and retailers must charge and display the new prices. State Drug Controllers will enforce the order.
The cut in MRP could be up to 70% for some medicines, depending on how large their margins were. The revised MRP is worked out from each maker's net sales price for March 2026 (excluding sales to the government).
This expands a 2019 pilot that capped margins at 30% on 42 anti-cancer drugs, which cut prices of 526 brands by up to 90%. Days earlier, the Supreme Court had asked the Centre why such margin caps could not be extended to other medicines.
Trade Margin Rationalisation (TMR): A New Pricing Tool
Trade Margin Rationalisation, or TMR, is a way of making medicines cheaper by limiting how much the middlemen in the supply chain can add to the price. Instead of fixing the final price, the government fixes the maximum gap between the price at which the company first sells the medicine (to the stockist or distributor) and the MRP the patient pays. Under the cancer-drug orders, this gap is capped at 30% of the MRP.
The 137-drug order is the largest use of TMR so far. It takes the 2019 pilot method and applies it to most costly cancer medicines, including new immunotherapy and targeted drugs.
Drug Price Regulation in India: DPCO and NPPA
India controls the prices of many medicines so that ordinary people can afford them. The main rulebook is the Drugs (Prices Control) Order, 2013 (DPCO), issued under the Essential Commodities Act, 1955. The body that applies these rules and fixes prices is the National Pharmaceutical Pricing Authority (NPPA), set up in 1997 and now working under the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers.
Almost all of the 137 cancer drugs are non-scheduled, so the normal ceiling-price system did not cover them. The government therefore used Paragraph 19 of the DPCO to cap their trade margins instead.
National List of Essential Medicines (NLEM)
The National List of Essential Medicines, or NLEM, is the government's official list of the medicines India considers most important for public health. These are the medicines that treat the most common and serious diseases, that are proven safe and effective, and that give good value for money. The list is prepared by the Ministry of Health and Family Welfare. Once a medicine is in the NLEM, it comes under price control, so it must be sold at or below a price fixed by the government.
The 137 anti-cancer drugs in the new order are non-scheduled, which means they are not in the NLEM and so have no ceiling price. The trade margin cap is a way to bring these costly medicines under price discipline without first adding them to the NLEM.
- Drugs covered: 137 non-scheduled anti-cancer drugs (all formulations, alone or in combination)
- Trade margin cap: 30% of MRP
- Legal basis: Paragraph 19, DPCO 2013 (issued under the Essential Commodities Act, 1955)
- Notification: 17 October 2026; revised prices effective 9 November 2026
- Manufacturers to report revised prices within 7 days of the Gazette notification
- Expected MRP cut: up to 70% for some medicines
- Recommended by an expert committee under the DGHS
- Enforcement: State Drug Controllers; price check via the Pharma Sahi Daam app
- 2019 pilot: 42 anti-cancer drugs, 526 brands, price cuts of up to 90%
- NPPA: set up 1997; under the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers