NPPA caps trade margins on 137 cancer drugs at 30%, new prices from November 9

What was notified

The National Pharmaceutical Pricing Authority (NPPA) has capped trade margins on 137 non-scheduled anti-cancer drugs at 30%, according to an official statement reported by ThePrint in a PTI report dated October 17. Business Today reports that the Gazette notification was issued on October 17. The revised prices take effect on November 9.

The cap is set at 30% of the maximum retail price (MRP), excluding GST, under Paragraph 19 of the Drugs (Prices Control) Order (DPCO), 2013, according to Mathrubhumi. PTI reports that the Ministry of Chemicals and Fertilisers said retail prices of these medicines could fall by up to 70%, depending on their current price structures. Mathrubhumi notes that 70% is a ceiling on the possible reduction, not a uniform discount.

"Non-scheduled" drugs are those outside Schedule-I of the DPCO. In an affidavit described by Kashmir Observer, the Centre said manufacturers set the launch price of such drugs and the NPPA monitors that the MRP does not rise by more than 10% in any twelve-month period.

Which drugs are covered

The list follows recommendations from an expert committee under the Directorate General of Health Services (DGHS), which includes oncologists, medical specialists, hospital experts and government officials, according to the Business Today and PTI reports. The list will be updated periodically.

Reports name pembrolizumab, durvalumab, osimertinib, bevacizumab, denosumab and pegfilgrastim among the covered drugs. Telangana Today says the list includes more than 35 patented formulations and 75 other non-scheduled oncology drugs.

What manufacturers, hospitals and retailers must do

• Manufacturers must report revised prices to the NPPA within seven days of the Gazette notification, publish updated price lists on their websites and circulate them to retailers and hospitals.
• From November 9, retailers and hospitals must charge the reduced prices and display them. Hospitals must also show them on their websites.
• State drug controllers have been directed to enforce compliance, according to PTI.
• PTI reports that manufacturers have been directed to maintain current production and supply of the notified formulations. Mathrubhumi says manufacturers wishing to cut monthly production need permission, to guard against shortages.
• Patients can check revised prices on the NPPA website and the Pharma Sahi Daam mobile app.

Background and what the reports leave open

The NPPA ran a pilot in 2019 that capped trade margins at 30% on 42 anti-cancer drugs. The government says this reduced the MRP of 526 brands by up to 90%; Mathrubhumi notes that this is the government's figure and that its article gives no independent verification.

Telangana Today reports that the NPPA estimates patients will save about Rs 2,500 crore a year. The same figure was given to the Supreme Court on October 12, as reported by Kashmir Observer; see the related report on that hearing.

Mathrubhumi points out that the order covers trade margins only, so hospital charges, diagnostics, consultations and other costs may remain high, and that the effect depends on manufacturers, distributors, pharmacies and hospitals applying the revised prices on time.