In October 2026, the Government of India, via a Press Information Bureau (PIB) announcement, approved a landmark regulatory decision capping trade margins at 30% for non-scheduled anti-cancer drugs. To understand this policy legally, it helps to know how medicines are regulated in India. Under the Drugs (Prices Control) Order (DPCO), "scheduled drugs" are essential medicines with strict ceiling prices set directly by the government. "Non-scheduled drugs," on the other hand, do not have direct statutory price caps; instead, distributors and retailers were previously permitted to add commercial profit markups—known as "trade margins"—between the manufacturer’s cost and the final Maximum Retail Price (MRP). Official market analyses revealed that trade margins on non-scheduled cancer drugs had ballooned to an average of 170%, and in extreme cases over 700%, creating severe financial strain for patients requiring extended oncology care.
To curb these exorbitant markups, the National Pharmaceutical Pricing Authority (NPPA) utilized its extraordinary statutory powers under Paragraph 19 of the DPCO, 2013. This legal mechanism empowers the government to intervene in pricing under "extraordinary circumstances" to protect the public interest. Through a strategy called Trade Margin Rationalization (TMR), the regulation legally limits the cumulative profit margin shared by wholesalers, distributors, and retailers to a maximum of 30% of the MRP. Rather than arbitrarily fixing the base manufacturing cost, the legal framework targets inflated supply-chain markups. By strictly enforcing this 30% ceiling, the law is projected to slash the retail prices of several crucial anti-cancer formulations by 20% to 70%, delivering estimated annual savings of ₹2,500 crore to patients across the country.
From an enforcement and compliance perspective, this directive enforces broad legal uniformities across the pharmaceutical sector. The cap applies universally to all non-scheduled anti-cancer therapies—including branded, generic, domestically produced, imported, patented, and non-patented medicines. Crucially, the statutory order includes mandatory compliance safeguards requiring drug manufacturers to maintain their pre-existing production and supply volumes. This prevents companies from reducing output or creating artificial market shortages in response to lower profit margins. Ultimately, by deploying existing drug pricing laws, the Indian government has created a balanced legal precedent that curbs commercial profiteering while upholding the constitutional objective of ensuring affordable, life-saving healthcare for all.
Source: Drugs (Prices Control) Order (DPCO), 2013,
PIB Release ID: 2321092 (Published on October 8, 2026)