Govt to cap trade margins at 30 pc of MRP for anti-cancer drugs, say sources

NEW DELHI: The Centre has decided to cap trade margins at 30 per cent of maximum retail price for all non-scheduled anti-cancer drugs, covering branded and generic, domestic and imported, patented, and non-patented medicines, government sources said on Thursday.

The move addresses excessive trade mark-ups and aims to improve affordability while ensuring continued availability of these life-saving medicines, the sources said.

The decision, which is expected to be implemented later this month, will bring down prices of 110 anti-cancer drugs, including 35 patented medicines.

"The primary aim of the trade margin rationalisation (TMR) is to prevent misselling malpractices. There is a tendency to sell drugs having a bigger margin, and since anti-cancer drugs are more expensive than the rest, we wanted to cap the trade margins on them," the sources said.

The move will lead to an estimated annual savings of Rs 2,500 crore of cancer patients, they said.

The Supreme Court had on September 29 voiced its concern on the issue of highly-inflated price of anti-cancer drugs.

Batting for a uniform 16 per cent margin on all medicines, a bench of Justice Vikram Nath and Justice Sandeep Mehta told Solicitor General Tushar Mehta appearing for the Centre, "This is carnage. Plain and simple. The cancer drug is priced at an MRP of Rs 27,000 despite being supplied to retailers for Rs 2,700."

The government sources, however, said the decision to cap the margins on the drugs was not related to the ongoing case but has been in the works since 2019. The health department has constituted a committee to finalise the list of drugs, the sources said, adding that the issue of pricing of other medicines needs a calibrated approach.

Once finalised, these medicines with the new rates will also be available at hospitals, they added.