"Trade Margin Rationalisation is a more market-friendly tool than ceiling-price fixing for ensuring drug affordability." Critically examine with reference to anti-cancer medicines.

Ceiling-price fixing caps the final price of scheduled drugs, which are the National List of Essential Medicines (NLEM) drugs in Schedule-I of DPCO 2013 [1]. Trade Margin Rationalisation (TMR) caps only the gap between the distributor price and the MRP. In 2026, the National Pharmaceutical Pricing Authority (NPPA) used Paragraph 19 to cap this margin at 30% of MRP on 137 non-scheduled anti-cancer drugs [2]. The order shows that TMR is lighter-touch, but it does not ensure affordability on its own.

Why TMR is more market-friendly

• Leaves the manufacturer's price untouched: TMR targets supply-chain markups, not the producer's price. This poses less risk to investment, and it allows even patented drugs to be covered [2].
• Targets proven profiteering: The Health Committee found an average markup of about 43% on common dosage forms. Retail margins on anti-cancer drugs were still 50–60% [3].
• Delivers large savings: The 2019 pilot on 42 drugs cut MRPs by up to 90% [4]. Patient savings from the 2026 order are estimated at Rs 3,357.49 crore [5].
• Built-in safeguards: Drugs already priced below the new level cannot be made costlier. Companies must give 6 months' notice before stopping a drug. Patients can check prices on the Pharma Sahi Daam app [5].

Where the claim falls short

• Not cost-based: A 30% margin on a very high patented base price still gives a high MRP. The Chemicals and Fertilizers Committee sought cost-based pricing where markups are abnormal [6].
• Ad hoc legal basis: Paragraph 19 is an extraordinary power used one drug at a time. Two committees have urged a permanent statutory TMR framework within a fixed timeline [3][6].
• Partial coverage: Cancer drugs outside the 137 and outside NLEM can still raise their MRP by 10% a year under Paragraph 20 [5]. The Health Committee wanted this cut to 5% [7].
• Weak enforcement: About 85% of overcharging dues (Rs 8,526 crore) had not been recovered as of 2025, and about 70% of that is stuck in court cases [6].
• Medicines are only part of the bill: AB-PMJAY does not fully cover diagnostics or newer therapies [7].

TMR complements ceiling prices rather than replacing them: it is easier on the market, but it reaches only part of the bill. The way forward is to write TMR into the law for all anti-cancer molecules, and to speed up recovery of overcharged amounts through an NPPA legal cell [6]. Two further steps are scaling up National Cancer Grid pooled procurement and widening PMJAY coverage [7]. Together, these steps would turn a market-friendly tool into real affordability, in line with the right to health under Article 21 and SDG 3.8 (universal health coverage).