Cancer Drug Prices May Fall 70% As Centre Caps Margins
The pilot resulted in price reductions of up to 91 per cent of MRP, with annual savings of Rs 984 crore reported across 526 brands.
New Delhi: Prices of several anti-cancer medicines are likely to fall by up to 70 per cent after the Centre decided to cap trade margins at 30 per cent of the maximum retail price (MRP) for all non-scheduled anti-cancer drugs, government sources said on Thursday.
The proposed intervention is aimed at curbing excessive mark-ups and reducing the financial burden on cancer patients. It will cover all non-scheduled anti-cancer drugs, including branded and generic medicines, and domestically manufactured and imported products, whether patented or non-patented.
“The proposed TMR is expected to result in significant reductions up to 70 per cent of MRP. The intervention would result in expected annual savings of Rs 2,500 crore and reduction in out-of-pocket expenditure for patients undergoing cancer treatment,” a source said.
The list of medicines covered will be a positive list to be finalised by an expert committee under the Directorate General of Health Services (DGHS).
Manufacturers of non-scheduled anti-cancer drugs will be required to maintain their existing production levels. Officials said the move would not affect manufacturers’ selling prices or revenue as the proposed cap would apply only to trade margins.
The decision comes amid a sharp rise in cancer treatment costs and concerns over wide disparities between procurement prices and the MRPs paid by patients.
Market data shows that the anti-cancer medicines segment comprises around 225 drugs and 500 formulations, with an annual turnover of approximately Rs 12,500 crore. Scheduled cancer medicines account for about Rs 2,250 crore of the market.
An analysis by the National Pharmaceutical Pricing Authority (NPPA) found that the average trade mark-up on non-scheduled anti-cancer drugs is around 170 per cent, with mark-ups in some cases reaching 700 per cent. Officials also pointed to significant price variations for the same medicines across retail outlets, hospitals and online pharmacies.
The issue has been raised by state authorities, patients and civil society groups. Representations from Maharashtra, Rajasthan and Karnataka, among other states, have highlighted concerns over excessive drug pricing and the gap between procurement costs and MRPs.
The Centre had tested a similar intervention in 2019, when the NPPA capped trade margins on 42 select non-scheduled anti-cancer drugs on a pilot basis under Paragraph 19 of the Drugs (Prices Control) Order, 2013.
The pilot resulted in price reductions of up to 91 per cent of MRP, with annual savings of Rs 984 crore reported across 526 brands.
Officials said the proposed expansion of the trade-margin cap could generate annual savings of around Rs 2,500 crore and substantially reduce out-of-pocket expenditure for cancer patients.