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House panel demands permanent cap on anti-cancer drug margins
A parliamentary panel rejected the government's response on drug pricing and demanded a permanent cap on trade margins for anti-cancer medicines, citing inordinate delay since Covid.
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A parliamentary committee has rejected the government's response on drug pricing and demanded an urgent permanent cap on trade margins for anti-cancer medicines, a move that could squeeze margins for Indian pharmaceutical companies that sell those drugs.
The Standing Committee on Chemicals and Fertilizers, in an action taken report tabled Monday, said it was not satisfied with most of the government's replies. Only four of 11 earlier recommendations were accepted, the panel said. Seven recommendations – including those on regulating non-scheduled medicines, capping trade margins and reining in excessive mark-ups on anti-cancer drugs – were rejected and needed to be reiterated.
The committee told the Department of Pharmaceuticals to give the "highest priority" to amending the Drugs (Prices Control) Order, 2013. It said the amendment should create a permanent legal basis for Trade Margin Rationalisation on life-saving drugs. Relying on temporary extraordinary powers under existing law was not enough to guarantee long-term affordability, the panel added.
The department told the committee it had held extensive consultations with drug makers and industry associations. The proposal was still under review after stakeholders raised concerns about the scope of margin caps, exemptions for low-priced medicines, implementation methodology and the impact on small and medium enterprises.
The government pointed to its 2019 decision to cap trade margins at 30% for 42 non-scheduled anti-cancer medicines. That move cut prices of 526 brands by an average of about 50% and saved patients an estimated ₹984 crore a year, the department said.
The committee was not impressed. It said the issue had been under consideration since the Covid-19 pandemic and criticised the "inordinate delay" in making the framework permanent. Addressing manufacturer concerns was fine, the panel said, patient affordability had to come first.