Mixed Results: New Trade Margin Caps Leave Many Premium Cancer Drugs Untouched

The central government’s recent initiative to cap trade margins on 137 non-scheduled anti-cancer medications has yielded a varied impact on patient affordability. While the National Pharmaceutical Pricing Authority (NPPA) successfully lowered the Maximum Retail Prices (MRPs) for 484 of the 643 listed medicine packs, an analysis by the advocacy group Access to Medicines and Treatment India reveals that nearly one in four packs saw no price adjustment, leaving many of the most expensive treatments beyond the reach of the common patient.

Limitations of Trade Margin Rationalisation

In October, the NPPA implemented Trade Margin Rationalisation (TMR) to curb excessive profiteering and bring down the exorbitant costs associated with oncology care. While the policy led to dramatic price drops for certain medications—such as Dr. Reddy’s Azacytin injection, which saw its MRP plummet from ₹6,337 to ₹1,495—the relief has been uneven.

The data indicates that while 275 packs experienced price cuts exceeding 50%, a significant portion of the most expensive therapies remained unaffected. Notably, of the 56 drug entries priced above ₹1 lakh, 53 retained their original, high-cost tags. Critics argue that the “big pharma” products, which often place the heaviest financial burden on families, have largely bypassed the intended cost-reduction benefits of this measure.

The Hospital Pharmacy Dilemma

Experts suggest that the current regulatory approach faces a major hurdle: the influence of hospital formularies. KM Gopakumar, a senior researcher at the Third World Network, noted that while generic and biosimilar medicines saw significant price corrections, hospitals may still prioritize stocking high-priced original brands over their affordable counterparts.

“The hospital formularies can be manipulated to maintain high-value brands while excluding affordable generic alternatives,” Gopakumar explained. Even though patients possess the legal right to purchase medicines from outside vendors, the environment of clinical care often pressures patients to rely on hospital pharmacies, where they remain vulnerable to existing pricing structures. There is a genuine concern that unless hospitals are mandated to stock lower-priced generic versions, the TMR policy may fail to yield the desired patient relief.

Beyond Distribution Margins

The methodology behind the price cuts has also come under scrutiny. Legal experts point out that the NPPA’s formula targets the distribution spread—the margins taken by wholesalers and retailers—rather than the initial prices set by manufacturers.

Chetali Rao, a patent expert, emphasized that focusing solely on trade margins ignores the underlying issue of high starting prices for innovative or single-source medicines. “True price rationalisation requires transparency and regulation of manufacturer-level reference prices, not just distribution mark-ups,” Rao noted.

The Path to Affordable Care

As the revised MRPs prepare to take effect on November 9, 2026, the consensus among public health advocates is that broader policy interventions are essential. Relying exclusively on trade margin caps is unlikely to resolve the systemic financial toxicity of cancer care.

Experts are calling for more robust government intervention, including the use of public health safeguards under the Patents Act, such as compulsory licensing, and the direct capping of overall treatment costs. As it stands, the current measure offers relief for some, but for many cancer patients facing life-saving treatments costing lakhs, the financial burden remains largely unchanged.

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