The Centre has capped trade margins at 30% of the maximum retail price for all non-scheduled anti-cancer drugs, following letters from Karnataka’s health department highlighting steep differences between procurement costs and prices charged to patients.
Karnataka’s health department welcomed the decision, describing it as a significant policy change after the state investigated the pricing of medicines, medical devices and consumables used by hospitals. The department said its inspection had found that some medicines and consumables were being sold at mark-ups ranging from around three times to more than 50 times their procurement cost.
The issue was raised by Karnataka health minister UT Khader in a letter to Union health minister JP Nadda in September. Khader sought national-level intervention to address what the state described as excessive patient billing for cancer drugs and for medical devices and consumables procured by hospitals at discounted institutional rates.
According to Karnataka health department officials, the new cap follows the state’s investigation. The officials said the Centre’s decision to limit trade margins to 30% of MRP would address a major concern in the pricing chain for non-scheduled anti-cancer medicines. The supplied report does not specify the date of the Centre’s notification or the enforcement mechanism for the cap.
Khader had also requested the formation of a central inter-ministerial expert group, a national study of high-value medicines and medical devices, tighter trade-margin controls, mandatory disclosure of procurement costs and patient billing prices, and expanded price regulation by the National Pharmaceutical Pricing Authority.
The state’s intervention followed communications from Food Safety and Drug Administration commissioner Srinivas K. Earlier in September, he wrote to the Centre on two occasions. One letter flagged the large gap between the landing cost and the MRP of medicines, while the other sought price regulation for essential medical devices to reduce patients’ out-of-pocket expenditure.
The distinction between scheduled and non-scheduled medicines is central to the policy change. The latest measure, as described by Karnataka’s health department, applies to non-scheduled anti-cancer drugs, which were not covered by the same pricing framework. Its effect on final patient bills will depend on how hospitals, distributors and retailers apply the margin cap across the supply chain.
Karnataka’s health department had sought a broader response than a single margin limit. Its proposals included greater disclosure of procurement and billing prices, along with a review of high-value medicines, devices and consumables. These demands point to the administrative challenge of tracking prices when medicines are purchased by hospitals at institutional rates but billed to individual patients.
The Centre’s next steps, including the formal implementation process and monitoring arrangements for the 30% cap, will determine how quickly the policy reaches hospital billing counters. Karnataka’s health department is expected to continue pressing for regulation of medical devices and consumables alongside cancer medicines.
