India's NPPA proposing caps on pharma trade margins

29 May 2019

A bigger dose of price control is on the cards with India’s drug price regulator, the National Pharmaceutical Pricing Authority (NPPA), considering a proposal to cap trade margins of all medicines at 30% in a bid to curb profiteering.

The proposal was recently mooted at a closed door meeting between officials of the Prime Minister’s Office and the Department of Pharmaceuticals (DoP), and is said to be among the forerunners to be put in action with the newly elected government assuming office end-May.

A DoP official said: "One major factor that contributes to high drug prices is the unreasonable trade margins." Noting that the matter has been under discussion for a long time, the official said it was included in the interim report of the Sandhu Committee constituted by the Department of Chemical and Petrochemicals in 2004, and subsequently in another report on 'High Trade Margin in the sale of drugs' in 2015.

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