"Trade margin rationalisation offers a targeted route to affordable medicines without direct price fixing." Critically examine with reference to anti-cancer drugs in India.

Trade margin rationalisation (TMR) limits the markup of wholesalers and retailers instead of fixing a formula-based price. NPPA's 30%-of-MRP cap on 137 non-scheduled anti-cancer drugs under Para 19, DPCO 2013 [1] is well targeted, but a partial route to affordability.

Why TMR is a targeted route

• Targets distribution excess: covers high-cost therapies such as immunotherapy and Bevacizumab [1]; the highest reported MRP cut of 96.45% [2] suggests very wide margins.
• Lighter than ceiling pricing: essential medicines face NPPA ceiling prices [3]; TMR reaches non-scheduled drugs without a ceiling-price formula, leaving the company's price untouched.
• Proven at scale: the 2019 pilot on 42 drugs cut about 500 brands' MRPs by roughly 50% on average, saving about ₹984 crore yearly [4]. By 8 November 2026, 1,364 formulations were reported, with expected savings of ₹3,540.38 crore a year [2].
• Reaches the insurance gap: PM-JAY covers only inpatient care, while out-of-pocket spending is mostly on outpatient care and medicines [5]; lower MRPs act directly there.

Where the claim falls short

• Company price untouched: illustratively, at a 30% cap, a ₹70,000 company price still supports a ₹1 lakh MRP. Reviews collated by WHO seek to correct the imbalance in negotiating power between payers and manufacturers [6]; six months of immunotherapy can cost more than several years' income [7].
• Still price control, and temporary: revised MRPs are mandatory outcomes. DPCO permits margin capping only for a limited period, and a parliamentary committee sought an amendment [8]; Report No. 33 (2026) flagged the absence of a permanent TMR framework [9].
• Flat-margin distortion: a percentage cap earns more on costlier brands. A WHO-SEARO review warns that mark-up rules may raise supplier demand for higher-margin medicines and notes WHO's preference for regressive mark-ups [10]. The risk remains unproven for Indian cancer drugs.
• Weak enforcement: compliance rests on State Drug Controllers [1], while large overcharging dues remain stuck in litigation [9].

TMR trims distribution excess but cannot discipline the company's price. A permanent DPCO margin rule with regressive slabs, tendering and biosimilar promotion [11], and outpatient cancer-medicine cover under PM-JAY would convert a partial tool into durable financial protection, advancing Article 21's right to health and SDG 3.8.