The National Pharmaceutical Pricing Authority (NPPA) has decided to limit the profit margins that distributors, stockists and chemists can add to 137 cancer drugs. The move is aimed at reducing the prices patients pay for these medicines. The new prices are expected to take effect from November 9, 2026.

Under the notification announced on Saturday, the trade margin will be capped at 30 per cent of the maximum retail price (MRP), excluding GST. Trade margin is the amount earned by intermediaries, such as distributors and retailers, between the manufacturer and the patient.

This means traders can add a maximum of 42.86 per cent to the price at which a manufacturer sells a drug to a stockist or distributor, known as the Price to Stockist or Price to Distributor (PTS/PTD).

The cap will cover 137 cancer drugs identified by an expert committee of the Health Ministry as essential for cancer treatment. These include widely used medicines such as bevacizumab, pembrolizumab, nivolumab, osimertinib and palbociclib.

India’s drug price regulator said the list could be revised from time to time depending on market conditions and public health needs. Most of these medicines are classified as “non-scheduled” drugs, meaning they are not covered by the government’s regular price controls. This gives companies and traders greater freedom to set prices, which the regulator said had resulted in high mark-ups.

The authority invoked Paragraph 19 of the Drugs (Prices Control) Order, 2013, which allows the government to control the prices of medicines in extraordinary circumstances in the public interest. It also referred to a similar move in 2019, when trade margins on certain cancer drugs were capped.

The revised MRP will be calculated using the manufacturer’s price to the stockist, a trade margin of up to 30% of the price before GST, and applicable GST.

The starting price will generally be based on sales in March 2026. The company’s net sales revenue for a drug during that month will be divided by the number of units sold, excluding sales to government buyers. If there were no sales in March 2026, the company will use sales data for the period from April 2025 to March 2026.

For example, if a drug is sold to a stockist for ₹1,000 and GST is 5 per cent, the revised MRP would be ₹1,500. If its existing MRP is ₹1,800, the company will have to reduce it to ₹1,500. However, if the existing MRP is ₹1,400, the company can retain that lower price.

For drugs launched after March 31, 2026, the current price to the stockist will be used. When manufacturers supply medicines directly to hospitals, the hospital will be treated as the stockist.

The cap will also cover patented medicines and non-scheduled drugs containing any of the listed medicines, whether sold individually or in combination with other drugs, and regardless of their strength or form.

Companies can exclude medicines supplied free to patients under their Patient Assistance Programmes from the calculation, provided they meet the NPPA’s conditions. These include submitting an undertaking and maintaining detailed records of patients, their diseases, prescribed doses and drug use. The authority can inspect these records and arrange independent verification. The exemption can be withdrawn if the conditions are not met.

Manufacturers will have seven days after the order is published in the Official Gazette to submit revised MRP details to the NPPA and State Drug Controllers, even if the price remains unchanged.

They must also issue an updated price list through the Integrated Pharmaceutical Database Management System (IPDMS) and share it with State Drug Controllers, dealers and other relevant parties. Retailers, distributors and hospitals will have to display the price list prominently.

Companies can continue to increase prices once a year, as permitted under Paragraph 20(1) of the Order, but must remain within the 30 per cent trade margin limit.

The NPPA has also directed manufacturers to maintain current production levels to prevent shortages. Companies seeking to reduce their average monthly production must first obtain the regulator’s permission. Those planning to stop manufacturing or importing a drug must inform the NPPA at least six months in advance.

Since many cancer medicines are supplied directly to hospitals, the authority has asked hospitals and medical institutions to monitor prices and report violations. State Drug Controllers will check compliance among manufacturers, distributors and hospitals. The NPPA can recover any excess amount charged in violation of the order.

Companies that fail to report their revised prices will be treated as having not reduced their prices, and the regulator can initiate action to recover overcharged amounts. Existing price orders for the covered drugs will be replaced once the new notification is published.

Published on October 17, 2026