The government capped trade margins on non-scheduled anti-cancer drugs at 30% of the maximum retail price. The cap covers branded and generic, domestic and imported, patented and off-patent medicines - about 110 drugs including 35 patented ones. A health ministry committee is finalising the list. In a Supreme Court hearing, a drug with an MRP of Rs 27,000 was said to reach retailers at Rs 2,700.
Why it matters for listed companies
A margin cap cuts the gap between the price a drugmaker sells at and the MRP, so the trade margin earned by distributors, pharmacies and hospital pharmacies shrinks most. Drugmakers with oncology portfolios may have to lower MRPs on products where the current trade margin is above the cap. Pharmacy chains and hospitals that earn on cancer-drug dispensing are directly exposed.
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