"Trade Margin Rationalisation offers a middle path between price control and free markets in pharmaceuticals." Examine this with reference to the recent capping of anti-cancer drug margins.

On 17 October 2026, NPPA applied Trade Margin Rationalisation (TMR) to 137 non-scheduled anti-cancer drugs. As a result, revised MRPs for 543 brands take effect from 9 November 2026 [1]. TMR caps the markup added by the supply chain but leaves the factory price to the market. It therefore sits between ceiling-price control and free pricing, although it is not yet a lasting framework.

How TMR is a middle path

• Reaches beyond ceiling prices: Ceiling prices cover only Schedule-I (NLEM) drugs, about 18% of market value. The remaining 82% is non-scheduled and faces only a 10% annual cap on price increases [2].
• Keeps market pricing: TMR caps only the margin between the Price to Distributor (PTD) and the MRP. The manufacturer's price is untouched, which keeps the market-based principle of NPPP 2012 [2].
• Targeted, not blanket: Only about 4% of the non-scheduled market carries markups above 100% of PTD [2]. Costly cancer drugs fall in this group. For example, the price of Bevacizumab 100 mg falls from ₹21,767.70 to ₹5,930.13 [1].
• Tested approach: The 2019 pilot on 42 drugs cut some MRPs by up to 90% [3]. It saved patients about ₹984 crore a year [2].

Limits of the middle path

• Temporary legal basis: TMR rests on Para 19 of DPCO 2013, an emergency power for extraordinary situations. The Standing Committee's 33rd Report (2026) called the delay in making TMR permanent "inordinate" [2].
• Factory price not examined: NPPA has no power to audit costs. High prices set by a single seller of a patented biologic therefore escape scrutiny [2].
• Weak enforcement: Old stock is still sold at pre-revised MRPs. Overcharging demands of ₹10,013.30 crore are largely stuck in court, and 15 of NPPA's 48 sanctioned posts are vacant [2].
• Viability concerns: MSME firms warn that margin caps could reduce the supply of low-cost trade generics in rural areas [2].
• Headline savings overstated: Hospitals already give discounts of 20–60% on MRP, so many patients save less than the figures suggest [2].

Way forward

• Write TMR into DPCO with a fixed deadline, as the Committee recommends [2].
• Use price-sensitive margins: follow WHO's 2020 pricing guideline on regulating markups along the supply chain [4].
• Give NPPA a limited cost-audit power where markups are abnormally high [2].
• Recover dues faster through fast-track settlement outside court [2].

TMR reconciles affordability with market freedom for high-value cancer drugs. If it is put into law and properly enforced, it can make the right to health under Article 21 a practical reality and advance SDG 3.8 on affordable essential medicines.