New Delhi, Oct 18 (NVI) At least 137 anti-cancer medicines are set to become less expensive with effect from November 9 as the government has issued directives to cap their trade margins at 30 percent.
The trade margins of the medicines, including several patented drugs such as pembrolizumab, ribociclib and abemaciclib, have been capped at 30% over the cost at the first point of sale, either the stockist or the hospital, when it is directly sold to them.
Additional GST will apply to the newly calculated MRP by the manufacturer.
Where the current MRP is lower than the MRP calculated after trade margin rationalisation, the lower MRP will have to be maintained by the companies.
An analysis of market data by experts at a recent NPPA meeting found that non-scheduled anti-cancer drugs carry an average trade mark-up of approximately 170%, with mark-ups going up to 700% in certain cases.
“The revised prices shall come into effect from 09.11.2026 and shall remain in force until further orders,” said a gazette notification issued by the government.
The manufacturers of the medicines have been asked to submit the revised MRP to the National Pharmaceutical Pricing Authority (NPPA) within seven days.
The medicines included in the list have been selected to ensure affordability of drugs that can be considered to be essential for the treatment of cancer patients by an expert committee under the Director General of Health Services.
At present, the annual turnover of cancer drugs is around ₹12,500 crore. Of this, scheduled cancer drugs, whose prices are regulated, account for only around ₹2,250 crore.
Addressing these huge mark-ups on non-scheduled drugs, the experts at the NPPA meeting said it is expected to reduce MRP broadly in the range of 20–70%, resulting in annual savings of approximately ₹2,500 crore.
The 2019 exercise resulted in substantial reductions in MRP of up to 91%, with annual savings of approximately ₹984 crore, according to the minutes of the NPPA meeting.
“The Authority considered it necessary to cap the trade margin at 30% of MRP, excluding GST, corresponding to a mark-up of 42.86% on the price to Stockist/Price to Distributor (PTS/PTD) to retain a reasonable trade margin while preventing excessive mark-ups, according to the minutes of the meetings of the pricing control authority on October 16 and 17.
“All the existing manufacturers of formulations having MRP lower than the MRP so computed … shall maintain their existing MRP,” the notification said.
Any manufacturer not complying with the provisions of this order shall be liable to deposit the overcharged amount along with interest.
The notification also addresses another concern — supplies being interrupted as lower prices come into effect.
It says: “The manufacturers of the formulations are required to maintain the present production levels. Any manufacturer intending to lower the average monthly production levels will seek prior permission from NPPA. Further, any manufacturer intending to discontinue production of the above-said formulations shall furnish information to NPPA.”
The manufacturers have also been asked to widely disseminate the revised MRP to ensure the consumers are aware of the change.
The notification states that the MRP will be calculated based on a similar formula used during the 2019 pilot to bring down the prices of 42 cancer medicines.
The formula that the manufacturers have to use: MRP of the product = Price to Stockist or Price to Distributor x {1 + (Trade Margin/(100 − Trade Margin))} + Applicable GST.
With several cancer drugs being sold directly to hospitals, the medical institution shall be treated as the stockiest/distributor and the manufacturer’s invoice data to the hospital will be considered for the purpose of calculation. (NVI)
