Cancer Medicines to Get Cheaper: 30% Trade Margin Cap on 137 Drugs Explained
The National Pharmaceutical Pricing Authority (NPPA), India's drug price regulator, has capped the trade margin on 137 cancer medicines at 30% of the MRP (maximum retail price), counted without GST. Trade margin means the money earned by middlemen such as distributors, stockists and chemists between the company and the patient.
A 30% margin means traders can add at most 42.86% on top of the company's selling price to the stockist, called the Price to Stockist (PTS) or Price to Distributor (PTD). New prices are expected from 9 November 2026.
The list was prepared by an expert committee of the Union Health Ministry. It includes widely used medicines such as bevacizumab, pembrolizumab, nivolumab, osimertinib and palbociclib. Most are non-scheduled medicines, which means they are not under India's regular price ceilings. The list may be revised from time to time.
The NPPA used Paragraph 19 of the Drugs (Prices Control) Order, 2013, its emergency power to control any medicine's price in extraordinary circumstances and in the public interest. The order also covers patented medicines and combinations containing a listed medicine, in any strength or form.
How the new MRP is worked out: PTS (usually based on March 2026 sales, excluding government sales) plus up to 30% margin, plus GST. Example: a drug sold to a stockist at ₹1,000 with 5% GST gets a maximum MRP of ₹1,500. If its MRP is ₹1,800, it must fall to ₹1,500; if it is already ₹1,400, it stays. When a company sells directly to a hospital, the hospital counts as the stockist.
Other conditions: companies must report revised MRPs to the NPPA and State Drug Controllers within seven days of the Gazette notification and publish price lists through the Integrated Pharmaceutical Database Management System (IPDMS). They must keep production at current levels, take NPPA permission to cut monthly output, and give six months' notice before stopping a drug. Free medicines given under company Patient Assistance Programmes can be left out of the calculation if strict record-keeping conditions are met. The yearly price increase allowed under Paragraph 20(1) continues, but always within the 30% margin.
Drug Price Regulation in India: DPCO and NPPA
India controls the prices of many medicines so that ordinary patients can afford them. The rulebook is the Drugs (Prices Control) Order, 2013 (DPCO), issued under Section 3 of the Essential Commodities Act, 1955. The body that applies it is the National Pharmaceutical Pricing Authority (NPPA), set up on 29 August 1997 as an attached office of the Department of Pharmaceuticals (Ministry of Chemicals and Fertilizers). Medicines on the National List of Essential Medicines get a fixed ceiling price; all others are only watched, unless the government uses its special powers.
Because most of the 137 cancer medicines are non-scheduled, the normal ceiling price rules did not reach them, and companies could print very high MRPs. The NPPA has used its Paragraph 19 emergency power to bring them under a 30% trade margin limit.
Trade Margin Rationalisation (TMR): A New Pricing Tool
Trade Margin Rationalisation (TMR) makes medicines cheaper by limiting the gap between the price at which a company first sells a medicine (to a stockist) and the MRP the patient pays. The government does not fix one price for all brands. Each company still chooses its own first-sale price; only the extra amount middlemen can add is capped. This mainly hits brands with inflated MRPs.
This notification turns the in-principle decision into a binding order and widens the 2019 pilot (42 medicines) to 137 medicines. A patient buying an expensive injection like pembrolizumab or nivolumab should see a lower printed MRP wherever the old mark-up was above the 30% margin limit.
Immune Checkpoint Inhibitors: How Cancer Immunotherapy Works
Immune checkpoint inhibitors are a type of cancer medicine that help the body's own immune system attack cancer. Our immune cells have natural "brakes" that stop them from attacking healthy cells. Many cancers press these brakes to hide from the immune system. Checkpoint inhibitors block these brakes, so the immune cells can recognise and kill the cancer cells. Pembrolizumab and nivolumab, two medicines on the new price-cap list, are among the best known examples.
Pembrolizumab and nivolumab, two of the most important checkpoint inhibitors, are on the list of 137 medicines whose trade margins are now capped at 30%. These are some of the costliest medicines a cancer patient in India can be prescribed, so any reduction in their printed MRP directly lowers the bill for families paying from their own pocket.
- Number of cancer medicines covered: 137 (list from an expert committee of the Health Ministry; can be revised)
- Trade margin cap: 30% of MRP (excluding GST) = maximum mark-up of 42.86% on PTS/PTD
- New prices expected from: 9 November 2026
- Legal power used: Paragraph 19, DPCO 2013 (extraordinary circumstances, public interest)
- Base price: PTS based on March 2026 net sales per unit (excluding government sales); April 2025 to March 2026 if no March sales; current PTS for drugs launched after 31 March 2026
- Example: PTS ₹1,000 + 5% GST → maximum MRP ₹1,500
- Companies must report revised MRPs within 7 days of the Gazette notification; price lists through IPDMS
- Stopping production or import of a listed drug: 6 months' advance notice to the NPPA
- Earlier pilot: 27 February 2019, 30% cap on 42 anti-cancer medicines; 526 brands cut prices; about ₹984 crore yearly savings
- NPPA set up: 29 August 1997; under the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers