NPPA Approves Major Price Cuts on Cancer Drugs in India, Costs May Drop by 20–70%

Cancer Drug Prices May Fall by Up to 70% as NPPA Approves 30% Trade Margin Cap

Cancer treatment in India could become more affordable following an in-principle approval by the National Pharmaceutical Pricing Authority (NPPA) to restrict trade margins on selected non-scheduled anti-cancer medicines. The proposed measure could reduce the maximum retail prices (MRPs) of some medicines by 20% to 70%, potentially saving patients around ₹2,500 crore annually.

The government’s drug pricing regulator has approved a proposal to cap trade margins at 30% of the MRP for identified non-scheduled cancer medicines. However, the final list of medicines to be covered is yet to be determined, and the price reductions will take effect only after the proposal is finalised and formally notified.

According to the minutes of the NPPA meeting held on Thursday, the authority considered the proposal in line with the trade margin rationalisation exercise introduced in 2019.

The regulator expects the proposed cap to lower treatment costs, reduce excessive mark-ups across the pharmaceutical distribution chain and improve transparency in the prices paid by patients.

What Has the NPPA Approved?

The NPPA has approved the proposal under Paragraph 19 of the Drugs (Prices Control) Order (DPCO), 2013. This provision empowers the government to intervene in drug pricing in the public interest, including when exceptional circumstances warrant price regulation.

The authority said consumer interests must remain paramount in view of concerns about excessive mark-ups on anti-cancer medicines and their impact on patients.

The move follows a direction from the Department of Pharmaceuticals (DoP), which asked the NPPA to implement trade margin rationalisation for non-scheduled cancer drugs on the lines of the 2019 exercise.

The DoP has also asked the Union Health Ministry to establish an expert committee under the Directorate General of Health Services (DGHS) to identify the medicines that should come under the proposed cap. The committee has been asked to submit its recommendations by October 14, 2026.

The list of covered medicines may be revised periodically to reflect changing market conditions and public health requirements.

How Much Could Cancer Drug Prices Fall?

The proposed cap could result in substantial price reductions, although the extent will vary from medicine to medicine.

The NPPA estimates that MRPs could decline by approximately 20% to 70%, depending on the existing distribution structure and mark-ups associated with individual products. The government has projected annual savings of around ₹2,500 crore.

Data cited from pharmaceutical research firm Pharmarack indicates that non-scheduled anti-cancer medicines carry an average trade mark-up of approximately 170%, with some products recording mark-ups as high as 700%.

The NPPA has also highlighted significant differences in transaction prices across retail pharmacies, hospitals and online pharmacies, including variations in the discounts offered against printed MRPs.

The proposed regulation aims to address excessive margins and ensure that reductions in distribution costs are reflected in the prices charged to patients.

Understanding the 30% Trade Margin Cap

A trade margin represents the difference between a medicine’s purchase price within the distribution chain and the price at which it is sold onward. Distributors, wholesalers and retailers may each receive a share of this margin.

Non-scheduled medicines fall outside the government’s list of drugs subject to fixed ceiling prices. Although their prices are not directly fixed through that mechanism, the NPPA monitors price increases, which generally cannot exceed 10% annually under the applicable rules.

Under the proposed arrangement, the total permitted trade margin would be capped at 30% of the MRP for the identified medicines.

For example, if a medicine has an MRP of ₹100, the maximum combined trade margin under the proposed cap would be ₹30. The actual reduction in the printed price would depend on the existing price structure and how manufacturers and distributors adjust their prices.

The cap has not yet been formally notified. Patients will therefore have to wait for the final drug list and revised MRPs to determine the actual savings on individual medicines.

Which Cancer Medicines Are Covered by Existing Price Controls?

India’s National List of Essential Medicines (NLEM), 2022, contains 388 medicines, including 63 anti-cancer drugs. These scheduled medicines are already subject to price regulation through the ceiling-price mechanism.

The wider anti-cancer drug market comprises approximately 225 drugs and 500 formulations, with an annual turnover of around ₹12,500 crore.

Of this market, scheduled cancer medicines account for approximately ₹2,250 crore, while non-scheduled products make up the remaining share.

The newly approved proposal focuses on identified non-scheduled anti-cancer medicines, rather than automatically extending the same trade margin cap to every cancer drug available in India.

Supreme Court Raises Concerns Over Cancer Drug Pricing

The NPPA’s decision comes amid recent Supreme Court scrutiny of the cost of cancer medicines.

On September 22, the court reportedly criticised the high prices charged for essential cancer drugs, describing the practice as daylight robbery of patients.

During a hearing on September 29, a bench comprising Justices Vikram Nath and Sandeep Mehta referred to a medicine reportedly supplied to retailers for approximately ₹2,700 but carrying an MRP of around ₹27,000.

The bench questioned why the retailer margin of 16% applied under the DPCO should not be extended to all medicines. The matter was listed for further hearing on October 12.

The court’s observations have added to the debate over whether existing drug pricing regulations adequately protect patients from excessive costs, particularly those requiring long-term cancer treatment.

What Happened Under the 2019 Price-Cutting Exercise?

The NPPA previously invoked its powers under Paragraph 19 of the DPCO in 2019 to regulate the trade margins of non-scheduled anti-cancer medicines.

The exercise, notified on February 27, 2019, covered 42 non-scheduled cancer drugs. According to the figures cited in the NPPA’s meeting minutes, the intervention resulted in substantial reductions in MRP, including cuts of up to 91% across 526 brands.

The earlier exercise was estimated to have generated annual savings of approximately ₹984 crore.

The latest proposal seeks to build on that approach, with the government expecting a larger annual financial benefit for patients.

Patient Rights Groups Say More Measures Are Needed

While welcoming efforts to address excessive trade margins, the Working Group on Access to Medicines and Treatments has argued that a margin cap alone may not make many expensive cancer drugs affordable.

Co-convenors Jyotsna Singh and K M Gopakumar said the proposed measure could have limited impact on certain patented medicines, whose prices may remain high even after distribution margins are reduced.

They cited pembrolizumab, marketed as Keytruda, which they said costs approximately ₹1,95,000 per vial.

The group called for broader use of public health safeguards available under the Patents Act, including government-use provisions under Section 100 and compulsory licensing to enable generic production where legally justified.

According to the group, reducing distribution margins should be accompanied by measures that address the underlying prices of expensive patented treatments.

Pharmaceutical Industry Sees Scope for Targeted Intervention

A pharmaceutical industry official, speaking on condition of anonymity, supported the government’s move but argued that unusually high margins are concentrated in a relatively small segment of the market.

The official said most non-NLEM medicines operate within normal distribution and discount ranges, while some hospital-based and specialised therapies have unusually high margins.

The official suggested that regulatory intervention should focus on correcting distortions where they occur rather than treating every product in the same way.

What Does the Decision Mean for Cancer Patients?

The proposed 30% trade margin cap could provide meaningful relief to patients purchasing selected non-scheduled cancer medicines, especially where existing mark-ups are exceptionally high.

However, the estimated 20% to 70% price reduction is not a guaranteed discount on every cancer drug. Actual savings will depend on the medicines included in the final list, their existing MRPs and the implementation of the new rules.

The government’s projected annual savings of ₹2,500 crore also remain an estimate until the policy is implemented and its effects can be assessed.

For patients and their families facing high treatment costs, the next important steps will be the expert committee’s recommendations, finalisation of the covered medicines and formal notification of the revised pricing framework.