The Mechanics of the Price Cut
The NPPA’s order, effective November 9, 2026, targets the gap between the price at which a drug company sells a product and the maximum retail price (MRP) paid by a patient. A trade margin is the difference between these two figures, excluding GST. The new rule sets a firm ceiling: the margin cannot exceed 30% of the MRP. The mechanics here are straightforward. Companies must calculate a new MRP based on their average distributor price from March 2026. For example, a drug sold to a distributor at ₹70 can now have an MRP of no more than ₹100 before tax is added. This process has led to an average price drop of 20–70% across 1,366 formulations, with the steepest cut—a 96.45% reduction—applied to the Samtepa (thiotepa) injection. The impact is most acute in hospital pharmacies, where patients often have no choice but to buy expensive injections at markups that no longer apply.
The government’s stated goal is to ensure no Indian family must choose between a loved one’s life and their financial stability. The problem the policy addresses is a supply chain where each link added its own markup. By capping the total margin, the NPPA aims to make the patient’s bill reflect the real cost of the medicine, not the profits stacked along the chain. The rule is broad, covering every dose and form, from tablets to advanced immunotherapies like pembrolizumab and nivolumab, as well as targeted therapies like osimertinib. These are among the newest weapons against cancer, and the cap brings them closer to the patients who need them most.
The Savings and the Catch
Official estimates put the annual savings for patients at ₹3,357–3,557 crore. For a family fighting cancer, these are not abstract numbers; they determine whether treatment continues or stops halfway. The financial burden is immense. Cancer cases in India rose from 1.43 million in 2021 to 1.57 million in 2025, straining households that often take loans or sell assets to cover costs. The catch is that the savings are not distributed evenly. While 679 of the 1,364 brands saw price drops over 50%, 201 brands—including 159 patented drugs—remain unchanged. The real problem, however, lies with the most expensive treatments. Patented drugs like Keytruda (pembrolizumab) and Imjudo (tremelimumab) remain priced at ₹2.16 lakh and ₹4.17 lakh per dose, respectively. Public health advocates argue that controlling distribution markups does not address the underlying pricing power of manufacturers. The mechanics here show a clear structural limitation: the policy targets the trade margin, not the ex-factory price set by the patent holder.
Consider the case of widely used drugs like Bevacizumab injections. The price of Bryxta, manufactured by Zydus Lifesciences, fell from ₹25,995 to ₹3,318. Similarly, Reliance Life Sciences’ Bevacirel dropped from ₹24,079 to ₹3,985. These sharp declines provide immediate relief for patients requiring repeated doses for lung, ovarian, and colorectal cancers. Yet, the exact financial relief for an individual still depends on the prescribed dosage, the chosen brand, and the total duration of treatment. Even with reduced drug prices, the total cost of cancer care—which includes diagnostics, surgery, radiation, and follow-up visits—remains a major challenge for many households.
The Supreme Court’s Role and Industry Pushback
The NPPA’s crackdown did not happen in a vacuum. It follows a series of Supreme Court hearings where judges described drug pricing as “loot and carnage” and reserved judgment on a petition against exorbitant trade margins charged by private hospitals. The government’s representatives argued for a balancing of equities in regulating medicine prices. The court’s scathing observations created the political will for the NPPA to act. State authorities, patients, and civil society had long flagged the wide gap between procurement and retail prices. Market data confirmed high markups, and the court’s intervention pushed the government to respond.
Follow the money, and you see why some drugs remain untouched. Single-supplier drugs, whether from multinational companies or Indian firms that in-license products, dominate pricing. These companies have significant leverage. If they resist further cuts, the NPPA’s power is limited. KM Gopakumar, co-convenor of a patient advocacy group, pointed out that 56 molecules are enjoying monopoly due to patent protection. He argued the government needs to consider using Section 93 or Section 100 of the Patents Act to issue a compulsory license, allowing generic production to facilitate affordable access. The catch is that pharma companies could challenge the 30% margin cap in court, setting up a potential battle over regulatory power and intellectual property.
What Comes Next
The NPPA has directed hospitals, retailers, and dealers to display revised prices online, but enforcement depends on compliance. On closer reading, the policy’s success will be measured by how effectively it penetrates the market and whether the promised savings reach patients as intended. The government’s action balances equity with industry concerns, but the long-term pricing power remains a question. Will the NPPA expand controls to scheduled drugs, or will it face legal challenges from pharma giants that see their profits threatened?
That ruling will likely define the legal boundaries of the government’s pricing power for years to come.
Sources
- Prices of cancer drug slashed by NPPA:137 medicines get cheaper
- Over 1,300 Anti-cancer Drugs to Get Cheaper
- Over 1,300 anti-cancer drugs to get cheaper
- Centre Slashes Prices of 137 Cancer Medicines to Save Patients Over Rs 3,540 Crore Annually – The 420.in
- Govt Slashes Prices Of 137 Cancer Drugs By Up To 96%: What Patients Need To Know?
Photo: BuhaM (CC BY-SA 4.0)
