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The monthly magazine, October 2026 · Social Issues › Access and affordability of health

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Trade margins on 137 cancer drugs capped at 30 per cent after the Supreme Court's daylight dacoity remark

LeadPrelims and Mains31 Oct 2026

Why in news

In October 2026 the National Pharmaceutical Pricing Authority capped the trade margin on 137 non scheduled anti cancer drugs at 30 per cent of the maximum retail price, under the Drugs (Prices Control) Order, 2013. Revised prices take effect on 9 November 2026, with cuts of up to 70 per cent and a saving to patients of about ₹2,500 crore a year.
The cap covers branded and generic, patented and off patent drugs. The cap followed the Supreme Court's remark, in a case on hospital pharmacy markups, that the gap between what a hospital pays and what a patient pays was "broad daylight dacoity".
The Court also directed the Centre to set up an expert committee on unethical pharmaceutical marketing, such as gifts and foreign trips to doctors, and asked why other medicines and devices could not be held to the same discipline.

The Drugs (Prices Control) Order, 2013, made under the Essential Commodities Act, 1955, gives a medicine one of three price rules, set out in the table.
Most cancer drugs are non scheduled, so a margin cap is the only control that reaches them.

Three price rules for a medicine in India	Which drugs	How the price is controlled	Margin allowed
Scheduled drug	The 384 medicines on the National List of Essential Medicines, Schedule I of the Order	The Authority fixes a ceiling price: the average price to the retailer plus the retail margin, revised each year with wholesale inflation	16 per cent to the retailer
Non scheduled drug	Every other medicine, including most cancer drugs	Any launch price, with a rise of up to 10 per cent a year	No control
Trade margin cap	42 cancer drugs in 2019. 137 more from 9 November 2026	The maker's price to the first stockist stays free. The chain after it may add no more than the cap	30 per cent of the printed price

Trade margin rationalisation caps what the chain between stockist and patient may add.
Hospitals and retailers must display the revised prices, State Drug Controllers enforce them, and a company may not cut production or supply without the Authority's permission.
A company whose current price is already below the ceiling must keep the lower price. The list will grow as the Directorate General of Health Services' expert committee adds drugs.

A Bench called the cancer cap "the tip of the iceberg" and cited the markups in the figure. The Bench asked why all essential medicines and devices could not be held to the 16 per cent retailer margin of the Order.
The Centre defended a "calibrated approach" that protects investment and innovation. The Court replied that economic policy cannot come before lives.

The market is built to overcharge. Firms compete for hospitals, not patients.

A high printed price and a low price to the hospital let the hospital keep the difference.
Patients buy from the hospital pharmacy, so the cheaper equivalent never reaches them.

A margin cap treats the symptom. A cap cannot lower a price that the manufacturer sets high. For a patented drug the margin is only part of the cost. The Order's ceiling price method does not apply to drugs outside the essential list.
The cap can be gamed. A firm can raise the price to the stockist or add free vials. One targeted therapy's monthly cost rose from ₹58,000 in 2022 to ₹78,000 in 2025 despite the 2019 cap.
The delay is the ethical question. A method proven in 2019 took seven years to extend, and with three quarters of cancer spending paid out of pocket, every one of those years was paid for by patients.

Extend margin caps beyond cancer drugs, with a margin that falls as the price rises so that sellers do not favour the costliest brand.
Monitor what patients actually pay, not only the printed price. Make hospitals display their rates, as the Clinical Establishments (Registration and Regulation) Act, 2010 already requires where it applies, and let patients buy from any pharmacy.

Prelims:
- National Pharmaceutical Pricing Authority: set up 1997, under the Department of Pharmaceuticals.
- Drugs (Prices Control) Order, 2013, made under the Essential Commodities Act, 1955.
- Scheduled drugs: the 384 medicines of the National List of Essential Medicines; ceiling of average price to retailer plus 16 per cent.
- 2019: trade margin cap on 42 cancer drugs.
- October 2026: cap of 30 per cent of the printed price on 137 drugs, from 9 November 2026.
- Clinical Establishments (Registration and Regulation) Act, 2010 requires rate display where it applies.

Mains: "The MRP has become a licence to overcharge." Examine the case for regulating trade margins on medicines, with reference to the 2026 cap on cancer drugs and its limits.

Show the questions

Mains 2024 GS2: In a crucial domain like the public healthcare system the Indian State should play a vital role to contain the adverse impact of marketisation of the system. Suggest some measures through which the State can enhance the reach of public healthcare at the grassroots level.

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