Representative image

NEW DELHI: In a move to curtail profiteering on crucial medicines, the Centre is set to cap trade margins charged by drug retailers and stockists at around 25-30% for over 50 non-schedule medicines for cancer and rare diseases, which are currently exempted from price regulation, official sources said.

The decision was taken at a high-level meeting with the Prime Minister’s Office earlier this month. The list of around 50 drugs, drawn by the Directorate General of Health Services (DGHS), includes 39 anti-cancer medicines and orphan drugs used in treatment of rare diseases. “The PMO had asked the health ministry to prepare a list of non-schedule anticancer and orphan drugs which are currently outside price control but require intervention to make them affordable.

The list has been submitted and order in this regard will be issued very soon,” an official told TOI, adding that the government will use Para 19 of the Drugs Price Control Order (DPCO) to fix the trade margin under “extraordinary circumstances” in public interest. The move assumes significance as many new cancer medicines, mostly patented drugs, and orphan drugs are exorbitantly priced but remain outside the purview of price regulation.

By capping trade margin of such medicines, the government aims to make them affordable while limiting excessive gains made by wholesalers, distributors and chemists. At present, the government caps the trade margin on schedule or price-controlled medicines at 8% and 16%, respectively, for wholesalers and retailers. However, in case of non-schedule medicines, firms are free to negotiate with traders on margins.

Experts say trade margins form a major portion of MRP of a medicine and firms often pay exorbitant margins to the trade chain to push their drugs through retailers. The proposed move will also override the department of pharma’s previous order exempting orphan and patented drugs from price control. Niti Aayog had earlier suggested trimming trade margins to bring down prices of key medicines which still remain outside price control.



In Video: Delhi HC bans on sale of online medicines