Context
The Union government has decided to cap trade margins at 30% of the Maximum Retail Price (MRP) for non-scheduled Anti-Cancer Drugs to make cancer treatment more affordable. An expert committee under the Directorate General of Health Services (DGHS) will finalise the list of medicines covered.
Explanation
- Trade margin is the difference between the price at which a medicine is sold to a distributor or retailer and its final selling price.
- Maximum Retail Price (MRP) is the highest price at which a packaged medicine can be sold to consumers, inclusive of applicable taxes.
- Scheduled medicines are listed under the Drug Price Control Order (DPCO), 2013, and are subject to government-fixed ceiling prices.
- Non-scheduled medicines are not subject to these ceiling prices, but their annual MRP increase is generally limited to 10%.
- The National Pharmaceutical Pricing Authority (NPPA) regulates medicine prices under the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers.
- The National List of Essential Medicines (NLEM) guides the selection of medicines for scheduled price control.
- The proposed cap aims to reduce excessive mark-ups and patients’ out-of-pocket expenditure (OOPE).
- Under Paragraph 19 of DPCO, 2013, the government can intervene in medicine pricing in extraordinary circumstances and public interest.
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