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The National Pharmaceutical Pricing Authority (NPPA) has approved in principle a proposal to cap trade margins

ICICIdirect Research 09 Oct 2026 DISCLAIMER

News: As per media sources, The National Pharmaceutical Pricing Authority (NPPA) has approved in principle a proposal to cap trade margins at 30% on identified non-scheduled anti-cancer medicines under Paragraph 19 of the Drug Price Control Order, 2013. The Directorate General of Health Services (DGHS) is expected to submit a list of medicines to be covered by October 14. NPPA estimates the move could reduce maximum retail prices by 20–70% and generate annual patient savings of around ₹2,500 crore. Non-scheduled anti-cancer medicines reportedly have average trade mark-ups of 170%, reaching up to 700% in some cases. The anti-cancer medicines market comprises around 225 drugs and 500 formulations, with an annual turnover of about Rs 12,500 crore. Scheduled cancer drugs account for around Rs 2,250 crore, while the balance comprises non-scheduled medicines. Non-scheduled formulations are monitored to ensure that their prices do not increase by more than 10% in a year.

View: We believe the effect of this regulation in a pharma/medicine supply chain would mostly effect the retailer margins. Hospital consumables constitute ~35% of the overall bill with an average EBITDA margin of ~30-35% and in the earlier hearing the capping was expected to be around 16% affecting the hospital stocks sentimentally negative. We expect an EBITDA margin impact of 2-4% on hospital EBITDA but we will need further clarity as the matter is subjudice and the list of the drugs will be released later on. As far as the impact on pharma margins are concerned we will need further details from the management interactions.

Impact: Neutral

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