NPPA: Trade margins capped at 30% on 137 anti-cancer drugs

The National Pharmaceutical Pricing Authority (NPPA) has capped trade margins on 137 identified non-scheduled anti-cancer drugs at 30 per cent, with revised maximum retail prices to take effect on 9 November 2026. Its order, S.O. 5690(E), issued in New Delhi and published in the Gazette on 17 October 2026, requires manufacturers to recalculate prices using the price at which they first sell the products to stockists or distributors.^[1]

The cap applies to non-scheduled formulations containing any drug on the notified list, whether sold individually or in combination, regardless of strength, dosage form or route of administration. Both branded and generic products priced above the permitted level must be reduced. Products already priced below that level must retain their existing maximum retail price, or MRP.^[1]

Manufacturers must submit the prescribed pricing information within seven days of Gazette publication, even where the calculation produces no change in MRP. That reporting deadline is separate from the November date on which revised prices become effective.^[1]

What the 30 per cent cap means

The order defines trade margin as the difference between the manufacturer’s selling price to a stockist or distributor and the MRP charged to the patient, excluding Goods and Services Tax (GST). The permitted margin is measured against the pre-tax MRP, not calculated as a simple 30 per cent addition to the stockist’s purchase price.^[1]

The prescribed formula is:

MRP = price to stockist or distributor x {1 + [trade margin / (100 – trade margin)]} + applicable GST, with the trade-margin value not exceeding 30.^[1]

The notification gives an example of a product with an existing MRP of Rs 300 plus applicable GST and a stockist or distributor price of Rs 70. Applying the formula produces a maximum revised MRP of Rs 100 plus applicable GST. This is an illustration in the order, not a notified price for a named medicine.^[1]

The reference price is generally the manufacturer’s average first-sale price during March 2026. It is calculated by dividing net sales receipts for the product by the quantity sold during that month. If there were no sales in March, the calculation instead uses sales from April 2025 to March 2026. Government sales are excluded.^[1]

For a listed non-scheduled drug introduced after 31 March 2026, the current stockist or distributor price is used. Manufacturers may add GST only where it has actually been paid or is payable to the government.^[1]

Why NPPA invoked exceptional powers

NPPA acted under Paragraph 19 of the Drugs (Prices Control) Order, 2013, invoking exceptional circumstances requiring intervention in the public interest. The notification distinguishes scheduled formulations, regulated through ceiling prices, from non-scheduled formulations, whose annual MRP increases are ordinarily monitored under Paragraph 20.^[1]

The authority said concerns raised by state authorities, patients, civil society and public forums included wide gaps between purchase prices and the MRPs charged to consumers. It also noted differences between retail and hospital prices, including discounts that could leave actual transaction prices substantially below the printed MRP.^[1]

In the minutes of its 8 October 2026 meeting, NPPA recorded that analysis of Pharmarack data indicated average trade mark-ups of approximately 170 per cent on non-scheduled anti-cancer drugs, reaching 700 per cent in some cases. These were the authority’s recorded findings from market data, rather than a finding about every medicine covered by the subsequent order.^[2]

At that meeting, the authority approved the intervention in principle, subject to finalising the drug list. It estimated that MRPs could fall broadly by 20-70 per cent, depending on individual medicines’ trade structures and mark-ups, with annual savings of approximately Rs 2,500 crore. Those figures were projections made before the final list was notified, not measured savings from the new order.^[2]

The Gazette order records that a Ministry of Health and Family Welfare expert committee recommended 137 drugs. NPPA considered that recommendation at its meeting on 16 and 17 October 2026 and decided to notify the list. The list may be updated in response to market developments and public-health considerations.^[1]

Patented drugs are also within the intended coverage. NPPA said patent status did not itself prevent price regulation under the DPCO, while recognising exemptions granted under Paragraph 32. The order therefore does not treat a patent alone as a reason to exclude a listed medicine.^[1]

Hospitals, assistance programmes and compliance

The pricing mechanism also covers direct supplies to hospitals and medical institutions. Where a manufacturer supplies a formulation directly to such a facility, the order treats the facility as the stockist or distributor. The manufacturer’s invoice data for those supplies becomes the basis for calculating the MRP.^[1]

Quantities supplied free through manufacturer-run patient assistance programmes can be excluded from the calculation, but only subject to specified conditions. Manufacturers must provide undertakings and maintain records documenting the programme, the medicines supplied and their use. NPPA reserves the right to seek clarification, conduct audits or inspections and verify implementation through third parties. Failure to meet the conditions can remove the exclusion for those quantities.^[1]

Under Paragraph 9(2), the notification requires manufacturers to provide the prescribed information to NPPA. Revised pricing details must also go to the relevant State Drug Controller within seven days of publication. The order says failure to submit the information will be treated as failure to reduce MRP, triggering action to recover overcharged amounts under the applicable DPCO provisions.^[1]

Manufacturers must also issue and submit the applicable Form-V price list through the IPDMS system under Paragraph 25, and provide copies to State Drug Controllers, dealers and other required recipients within that period.^[1]

A wider intervention, with limits to affordability

The new notification follows NPPA’s 27 February 2019 order, S.O. 1041(E), which applied a 30 per cent trade-margin cap to 42 non-scheduled anti-cancer drugs as a pilot exercise. That order also used the first point of sale as the pricing base and prevented manufacturers with lower existing MRPs from raising them to the formula’s permitted level.^[3]

The distinction between restricting distribution margins and making expensive medicines affordable has remained part of the debate. Responding to the October proposal before the final notification, the Working Group on Access to Medicines and Treatment argued that a margin cap alone could not bring high-priced cancer medicines within ordinary patients’ reach, according to ET Pharma’s report published on 9 October 2026. The group called for measures enabling generic production and a ceiling on MRP.^[4]

The All India Organisation of Chemists and Druggists welcomed trade-margin rationalisation as a step towards affordability, ET Pharma reported. It also said manufacturers determine and print MRPs, and that excessive mark-ups should be addressed at source. These responses concerned the earlier proposal, rather than the final 137-drug notification.^[4]

The final order does not prescribe a uniform percentage reduction for every covered product. The required change depends on its existing MRP and the applicable first-sale price; an existing MRP below the calculated limit must remain unchanged.^[1]

References

1. National Pharmaceutical Pricing Authority. Order S.O. 5690(E), Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii). 17 October 2026.
2. National Pharmaceutical Pricing Authority. Minutes of the 283rd (overall) and 151st meeting of the Authority under DPCO, 2013 held on 08.10.2026.
3. National Pharmaceutical Pricing Authority. Order S.O. 1041(E). 27 February 2019.
4. ET Pharma, Online Bureau. Centre caps cancer drugs trade margins at 30%; DGHS panel to prescribe final list. 9 October 2026.