- Why in news
- On 6 November 2026, PIB explained the NPPA order of 17 October 2026 capping trade margin at 30% of MRP on 137 non-scheduled anti-cancer drugs. The revised prices take effect on 9 November 2026.
- What it is
- The National Pharmaceutical Pricing Authority (NPPA) sits under the Department of Pharmaceuticals. It fixes and revises drug prices and enforces the Drugs (Prices Control) Order (DPCO), 2013, issued under the Essential Commodities Act. Trade Margin Rationalisation limits the markup between the manufacturer's distributor price and the MRP for drugs outside the scheduled list.
- The cap
- The trade margin on 137 non-scheduled anti-cancer drugs, including patented ones, is capped at 30% of MRP.
- Legal power used
- The Government used its extraordinary public-interest powers under Paragraph 19 of DPCO, 2013, on the recommendation of an Expert Committee under the DGHS.
- Non-scheduled price control
- Under Paragraph 20, a manufacturer of a non-scheduled drug may raise the MRP by no more than 10% in twelve months.
- Earlier pilot
- A Trade Margin Rationalisation pilot in 2019 covered 42 non-scheduled anti-cancer drugs.
- NLEM history
- NLEM was first created in 1996 and revised in 2003, 2011, 2015 and 2022. The Standing National Committee on Medicines drew it up.
- Cap and legal basis
- Trade margin is capped at 30% of MRP under Paragraph 19 of DPCO 2013.
- Enforcement
- State Drug Controllers ensure compliance by manufacturers, dealers, retailers and hospitals.
- Parent ministry
- NPPA works under the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers.
Don’t confuse with Paragraph 19 vs Paragraph 20 of DPCO: Paragraph 19 is the extraordinary power to set a price for any drug in the public interest. Paragraph 20 is monitoring of non-scheduled drugs, with a 10% annual rise limit.
Don’t confuse with Ceiling price vs trade margin cap: A ceiling price fixes the maximum price of a scheduled drug. A trade margin cap limits the markup within the MRP of a non-scheduled drug.
Don’t confuse with Scheduled vs non-scheduled drugs: Scheduled drugs are in the NLEM and have ceiling prices fixed by NPPA. Non-scheduled drugs have no ceiling but face a 10% annual price rise limit; TMR caps only the trade margin.
Don’t confuse with Trade margin vs MRP cap: A trade margin cap limits the distribution and retail markup. It does not fix the manufacturer's price.
Laws, judgments and statutory bodies: 30 Prelims questions since 2013 (what the law says, who chairs, legal basis). In Mains, 44 news-triggered questions, most in GS2, asking for provisions and challenges.
Why it matters
- Cuts out-of-pocket spending on costly cancer drugs, with reported MRP cuts averaging 20% to 70%.
- Extends price regulation to patented and non-scheduled drugs outside the NLEM.
- Reduces out-of-pocket spending, a major cause of health-related impoverishment, on cancer care.
- Extends price regulation beyond the NLEM list to high-cost non-scheduled drugs.
Problems
- Companies may cut supply or stop making low-margin drugs; the order requires permission to cut output and 6 months' notice before discontinuation.
- Compliance and checking of revised MRPs across retailers and hospitals is hard.
- Companies may cut supply or shift to unregulated products, causing shortages.
- Compliance across many retailers and hospitals depends on State Drug Controllers' capacity.
- A margin cap does not address high manufacturer prices or patented drug costs.
Way forward
- Keep monitoring prices through the NPPA website and Pharma Sahi Daam app, and enforce deposit of overcharged amounts.
- Extend margin rationalisation to other high-cost drug groups using data on markups.
- Monitor supply and prices and update the drug list periodically.
- Strengthen State enforcement and use the Pharma Sahi Daam app for public awareness.
- Pair with wider measures such as generics, bulk procurement and insurance coverage.
Put in your answer
Enforcement: Any company that does not lower its prices must deposit the overcharged amount with interest.
Supply safeguard: Firms must maintain current production and supply of the notified formulations.
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UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Statements
Ours, not from a UPSC paper
Consider the following statements:
- 1.The trade margin on the 137 anti-cancer drugs has been capped at 30% of the Maximum Retail Price, under Paragraph 19 of the Drugs (Prices Control) Order, 2013.
- 2.The list of the 137 drugs was recommended by an Expert Committee under the Directorate General of Health Services.
- 3.The National Pharmaceutical Pricing Authority functions under the Ministry of Health and Family Welfare.
Which of the statements given above is/are correct?
True or false?
1 of 5
Statements the way Prelims prints them. Say first, then see the fact.
1.The margin cap has been imposed under Paragraph 19 of the Drugs (Prices Control) Order, 2013.
True. Paragraph 19 of DPCO 2013 is the basis.
2.The drugs covered are scheduled drugs under the National List of Essential Medicines.
False. They are non-scheduled anti-cancer drugs, outside the scheduled list.
3.The list of drugs was recommended by an Expert Committee under the Directorate General of Health Services.
True. The DGHS Expert Committee recommended the 137 drugs.
4.NPPA functions under the Ministry of Health and Family Welfare.
False. NPPA is under the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers.
5.Manufacturers must display revised price lists on their websites and circulate them to retailers and hospitals.
True. Manufacturers must display price lists online and disseminate them widely.
Written by us from the release, not by UPSC; checked by a second model.
Mains practice
15 marks · 250 words
The National Pharmaceutical Pricing Authority has capped trade margins at 30% of MRP on 137 non-scheduled anti-cancer drugs under the Drugs (Prices Control) Order, 2013. Examine the provisions of the DPCO 2013 for regulating drug prices and discuss the challenges in making essential medicines, including cancer drugs, affordable in India.
Worth revising until Prelims 2028: most news questions come within two years of the event.