Government caps trade margin for 137 cancer drugs at 30%, prices likely to fall by up to 70%

The Indian government has imposed a 30% cap on trade margins for 137 cancer medications, including popular drugs like pembrolizumab, ribociclib, and abemaciclib. This decision comes from an expert committee under the Director General of Health Services, aiming to make these essential medicines more affordable for cancer patients. The National Pharmaceutical Pricing Authority (NPPA) will review the revised Maximum Retail Prices (MRP) within seven days, with the changes taking effect from November 9, 2026.

During a recent NPPA meeting, experts found that non-scheduled anti-cancer drugs typically have an average trade margin of around 170%, with some cases reaching up to 700%. Currently, the annual turnover of cancer drugs is approximately ₹12,500 crore, with regulated scheduled drugs accounting for ₹2,250 crore. Experts anticipate that rationalizing these margins could lead to a 20-70% reduction in MRP, resulting in annual savings of around ₹2,500 crore.

The pricing formula involves calculating the MRP as the Price to Stockist or Distributor multiplied by {1 + (Trade Margin/(100 − Trade Margin))} plus the applicable Goods and Services Tax (GST). If a drug is sold to the stockist at Rs 70, the MRP excluding GST would be Rs 100. This formula excludes drugs provided for free to patients under patient assistance programs, potentially inflating the MRP. The manufacturers have been asked to disseminate the revised MRP widely to ensure consumers are aware of the changes.

While this move aims to make cancer medicines more affordable, the high costs of patented treatments remain a concern for many patients. A real-world study from the Tata Memorial Hospital found that only 1.6% of patients who need patented targeted therapies actually receive them, with cost being the most significant barrier.