Maharashtra FDA Order Targets Hospital Captive Pharmacy Margins

The author warned that freeing choice alone will not cut drug prices. The real distortion lies in the opaque supply chain, with trade margins stacked from manufacturer to stockist to retailer. The National Pharmaceutical Pricing Authority understood this. In 2019, instead of only capping prices, it went after trade margins for 42 non-scheduled anti-cancer drugs, holding them at 30% of the retail price. The maximum retail price of hundreds of brands fell, in some cases by as much as 90%, the article said.

If the regulator pursues trade margin reform further, margins across hospital and retail pharmacies would face additional pressure. The author said the weakest margin is the one that survives only because customers have no alternative.

The author concluded that hospitals that earn trust through clinical outcomes, rather than captive pharmacies, will be relaxed about the order. Those institutions will endure, he said. The article calls for other states to adopt similar rules, and for wider trade margin reform and honest itemized billing.

A patient who walks out of the hospital gate may still face the same inflated maximum retail price at a pharmacy across the road, the author wrote. The economics behind the transaction point have not changed. The Maharashtra order, he said, should be a beginning, not a conclusion.