A medicine’s price is shaped not by science but by how it travels from manufacturer to patient. That is the logic behind the National Pharmaceutical Pricing Authority’s (NPPA) decision to bring 137 non-scheduled anti-cancer drugs under Trade Margin Rationalisation (TMR), effective November 9. Trade margins are capped at 30 per cent of the maximum retail price (MRP), excluding GST, and MRPs are expected to fall by up to 70 per cent. NPPA found mark-ups of up to 700 per cent in some anti-cancer medicines. The list spans blood, lung, breast, prostate, gastrointestinal and ovarian cancers, besides some palliative agents. The reform should be judged by its consequences for patients, manufacturers, hospitals and innovation.

Does reducing prices adversely affect innovation?

New medicines need sustained investment, so the question is fair. But trimming distribution margins does not touch the manufacturer’s realisation.…