A Parliamentary Standing Committee has urged the Centre to urgently introduce a permanent mechanism to regulate trade margins on life-saving anti-cancer medicines and other drugs, saying prolonged delays in reforming the drug pricing framework have kept essential treatments expensive for patients.In its Action Taken Report tabled in Parliament on Monday, the Standing Committee on Chemicals and Fertilizers also made it clear that it was not satisfied with most of the government’s response to its earlier recommendations. Of the 11 recommendations made in its original report on medicine prices, the Committee said only four had been accepted by the government, while replies to seven recommendations, including those relating to regulation of non-scheduled medicines, trade margin rationalisation, excessive mark-ups by drug companies and price regulation of anti-cancer medicines, were not accepted and required reiteration.The committee said the Department of Pharmaceuticals should accord the “highest priority” to amending the Drugs (Prices Control) Order (DPCO), 2013 to provide a permanent legal basis for Trade Margin Rationalisation (TMR) for life-saving drugs such as anti-cancer medicines. The panel said relying on extraordinary powers under the existing law for temporary interventions was insufficient to ensure long-term transparency and affordability.The committee noted that the Department had informed it that extensive consultations had been held with pharmaceutical companies, industry associations and consumer groups on introducing a permanent TMR framework, but the proposal was still under examination after stakeholders raised concerns over the extent of trade margin caps, exemptions for low-priced medicines, implementation methodology and the impact on MSMEs.The Centre also pointed out that it had capped trade margins at 30 per cent for 42 selected non-scheduled anti-cancer medicines in 2019, reducing prices of 526 brands by an average of around 50 per cent and resulting in estimated annual savings of ₹984 crore for patients.However, the committee said the issue had remained under consideration since the Covid-19 period and criticised the “inordinate delay” in institutionalising the framework. It said that while the concerns of manufacturers should be addressed, ensuring affordable medicines for patients must remain paramount, and called on the Department to expedite implementation of a permanent TMR mechanism.The report also reiterates several broader recommendations on medicine pricing after finding the government’s replies unsatisfactory. The committee said the existing framework should be reviewed as nearly 82 per cent of the pharmaceutical market comprises non-scheduled medicines that remain outside direct price control. It recommended revisiting the current mechanism, under which manufacturers can set the initial price of non-scheduled medicines while being restricted only from increasing the MRP by more than 10 per cent annually thereafter. It also sought details of medicines where trade margins exceed 100% over the distributor price.The panel further recommended empowering the National Pharmaceutical Pricing Authority (NPPA) to better regulate excessive pricing of non-scheduled medicines and sought specific responses from the Department on concerns it had raised over regulatory gaps, transparency in Price to Stockist (PTS) data and pricing of non-scheduled fixed-dose combinations.Another recommendation relates to “trade generics”—medicines largely sold through rural and remote distribution channels. Rejecting the Department’s justification that higher logistics and inventory costs explain the large gap between distributor prices and MRPs, the committee recommended urgent price regulation of trade generics to protect patients in rural areas.The committee also asked the Department to disclose details of stakeholder consultations held over the past three years, including recommendations made by industry associations, NGOs, health experts and medical practitioners on pricing of non-scheduled medicines, and explain how those suggestions had been addressed.Meanwhile, the government defended the current framework under the National Pharmaceutical Pricing Policy (NPPP), 2012, saying it balances affordability with industry growth. It said analysis of around 98,000 stock keeping units (SKUs) showed that about 87 per cent of the non-scheduled market had weighted average trade margins of up to 45 per cent, while only around 4 per cent had margins exceeding 100 per cent, indicating that very high mark-ups were confined to a small segment of the market.Published on July 28, 2026