For years I have written about fees and charges in loans, and the lesson is always the same i.e. the sticker price you pay is rarely the cost of the product. It is the cost of the product plus everything added along the way. I then read something interesting. A decision this month by India’s drug pricing regulator is a good example of the same idea in medicine. I am a writer, not a medicine expert, so this post is about the pricing and policy side. It is general information, so please do not consider this to be medical advice.
On 17 October 2026, the National Pharmaceutical Pricing Authority (NPPA) capped trade margins at 30% of the maximum retail price (MRP) for not one, two, but 137 anti-cancer drugs. The revised prices will take effect on 9th November 2026. Here is what that means in plain language.
What happened:
At a meeting on 8th October, the NPPA concluded that extraordinary circumstances justified stepping in on non-scheduled anti-cancer medicines. After that, on 17th October it issued the order naming 137 drugs. The government expects some prices to fall by up to 70%, and the cap stays in force until further orders.
The order covers every non-scheduled formulation containing any of the 137 drugs, whether sold alone or in combination, and regardless of strength, dosage form or route of administration. The NPPA said it includes patented drugs and medicines supplied directly to hospitals, and that the list can be updated as conditions change.
Before we continue more about this, it is essential for you to understand about what a trade margin is in medicine.
What a trade margin is
Medicines reach patients through a chain. A manufacturer sells to a distributor or stockist at the price to stockist, often written PTS. The stockist sells to a retailer, and the retailer sells to the patient at or below the MRP printed on the pack. Trade margin is the difference between what the manufacturer charges at the start of that chain and what the patient pays at the end. It covers the earnings of distributors and retailers.
Some medicines are scheduled, meaning they sit on the National List of Essential Medicines and have government-set ceiling prices. The 137 drugs here are non-scheduled, which means their prices were not directly capped before. That is why this intervention matters.
How the new price is worked out
The NPPA devised a formula. The new MRP starts from each manufacturer’s price to stockist for March 2026, based on its net sales realisation and quantity sold that month, excluding sales to government buyers. If a formulation had no sales that month, the NPPA will use data from April 2025 to March 2026. For formulations launched after 31 March 2026, it will use the prevailing price to the retailer or stockist with the same formula.
Two more rules are worth knowing. If an existing MRP is already lower than the formula result, the lower price stays. And manufacturers can still take the annual price increases allowed under the Drugs (Prices Control) Order, 2013, as long as they comply with the trade margin cap.
The cap is 30% of the MRP excluding GST. NewsBytes notes that this works out to a markup of 42.86% on the price to stockist. I know this is a lot of data and information to take up. So let’s see an illustration with made-up numbers:
If a manufacturer sells a drug to stockists at ₹100, the highest MRP before GST would be ₹100 divided by 0.7, or about ₹142.86. If that same drug had been printed at an MRP of ₹400, the price would fall by about 64%. These numbers are my own example and not any real drug.
Who gains and who is affected
Patients. Cancer treatment is expensive and long. A lower MRP on commonly used drugs can ease the burden, especially for families paying out of pocket. The Economic Times reported that the move could save about ₹2,500 crore a year, and the government says some prices could drop by up to 70%. The actual fall will vary drug by drug.
Distributors and retailers. Their margins on these drugs shrink. Whether they continue to stock every product at the lower margin is something to watch.
Pharma companies. The formula starts from what the manufacturer charged stockists, so the cap is aimed at the distribution markup and not at the manufacturer’s own price. Companies still need to relabel and reprice products by 9th November, and those that sell patented or hospital-supplied versions are covered as well.
Not the first time
India has tried this before. In 2019, the NPPA capped trade margins at 30% on 42 anti-cancer drugs, describing it as a proof of concept for trade margin rationalization. Reports at the time said the maximum retail price of 105 brands would fall by up to 85%. The 2026 order is much bigger, covering 137 drugs, and it uses a clear formula.
My honest take:
I like that this measure targets a part of the chain patients rarely see. Most people compare the price of the medicine and never ask how much of it is a markup. I also think it is worth being honest about what a price cap cannot do. It lowers what a patient pays for a drug. It does not guarantee the drug is always in stock, and it does not change the cost of diagnosis, hospital stays or the rest of cancer care.
Three things I will be watching are:
How quickly revised MRPs reach pharmacy shelves after 9th November
Whether any drug supply problems appear and
Which drugs the NPPA adds when it updates its list.
Lance Quadras is a Mumbai-based content writer and blogger with over 13 years of experience writing about AI and technology, travel, lifestyle, and health and wellness. He started writing on Blogger in 2014 and has since published over 640 articles across lancequadras.com. Lance writes for readers first — with an honest voice, real research, and zero fluff. He is available for freelance content writing, blog management, and long-form article work. Work with Lance → https://lancequadras.com/freelance-content-writer/