Explained: 137 cancer drugs are cheaper today, but how is the price of a drug decided?
The NPPA has stated that 10 to 15 of these 137 drugs have not yet been launched in the Indian market. However, the government maintains that the 30% margin cap will remain in effect whenever these drugs are launched.
What is the math behind determining the price of medicines?
There's significant relief for cancer patients and their families today, November 9, 2026. The prices of 137 essential anti-cancer drugs have been reduced. Pharmaceutical companies have released new prices for 1,364 formulations of 121 drugs. It's estimated that this will save patients approximately ₹3,540 crore annually. Some drugs have seen price reductions of up to 96.45%.
After all, how is the price of any medicine decided, and does the government itself decide the prices?
Drug prices in India are determined in two basic ways. To understand this, you need to look at India's Drugs (Prices Control) Order, 2013 (DPCO). This is the legal framework for determining drug prices in the country. There are two methods:
Method 1: Scheduled drugs, i.e., straight-up ceiling price
The country has a National List of Essential Medicines (NLEM), which is prepared by the Ministry of Health. Medicines included in this list are considered "scheduled" under the DPCO. These include 63 cancer drugs. The National Pharmaceutical Pricing Authority (NPPA) sets a "ceiling price" (maximum retail price) for these medicines, above which no company or retailer can sell them.
Method 2: Controlling 'trade margins' on 'non-scheduled' drugs
Under normal circumstances, the prices of these drugs are left to market forces. The only condition is that companies cannot increase prices by more than 10% annually. This is where Paragraph 19 of the DPCO comes into play.
Paragraph 19 gives the NPPA special powers to fix or revise the price of any drug in "extraordinary circumstances and in the public interest." When the Supreme Court condemned excessive profiteering on cancer drugs, the government took a major step, invoking this very Paragraph 19.
The government adopted the "Trade Margin Rationalization" (TMR) approach. This meant that a large portion of a drug's maximum retail price (MRP) was going to wholesalers and retailers as profits. An NPPA investigation found that non-scheduled cancer drugs had an average trade markup of 170%, reaching as high as 700% in some cases.
The NPPA limited the trade margin on 137 drugs to 30% of the MRP. No more than 30% of the drug's price can now be used as profit margins for middlemen, leading to significant price reductions.
Which medicines have become cheaper?
The Directorate General of Health Services (DGHS) expert panel recommended 137 drugs. This included several important immunotherapy drugs, including denosumab, pegfilgrastim, bevacizumab, pembrolizumab, durvalumab, and osimertinib. The government clarified that this list will be updated periodically.
The impact of this decision was significant. According to the PIB:
- A total of 1,364 formulations, covering 121 drugs, saw their prices reduced and 85 companies reported their new prices.
- Prices of 679 brands were reduced by more than 50%.
This reduction applies to drugs that previously had an average trade markup of 170%, reaching 700% in some cases. The NPPA's 30% cap curbs these uncontrolled profits. In 2019, similar trade margin caps were imposed on 42 cancer drugs, resulting in a 90% reduction in prices for 526 brands.
Currently, this applies only to 137 drugs selected by an expert panel. Many expensive drugs remain expensive.
For example, ultra-modern immunotherapy drugs like pembrolizumab, used in chemotherapy, have rarely seen a price reduction because they are priced differently or are still under patent. Yet, approximately 24.7% of cancer drugs experienced no price reduction.
Supreme Court's 'genocide' remark
It began on September 22, 2026, when the Supreme Court expressed strong displeasure over the prices of cancer drugs. A case came before the court where a drug purchased for ₹2,700 was being sold to a patient for ₹27,000. The court described this not just as profiteering, but as "broad daylight robbery" and "genocide." This comment was the spark that shook the entire system.
The central government has stated that no chemist or hospital pharmacy can charge more than the revised MRP. Patients can check the new drug prices through the "Pharma Sahi Daam" mobile app or the NPPA website. If anyone demands more, they can file a complaint through the "Pharma Jan Samadhan" portal or the NPPA helpline at 1800-111-255.