A cheap medicine that isn't available doesn't help anyone. Neither does a well-stocked med that patients can't afford. Pricing policy must solve for both. GoI's move to cap trade margins on non-scheduled anti-cancer medicines at 30% has reopened an important debate.

India has one of the most comprehensive drug-pricing frameworks. The task now is to make it work harder. Drugs (Prices Control) Order (DPCO), 2013, provides multiple layers of oversight. Essential meds are subject to government-determined ceiling prices, while annual price increases for non-scheduled formulations are restricted. GoI also retains the power to intervene in exceptional circumstances when public interest demands it.

The scope of direct regulation has expanded considerably, from 74 bulk drugs under DPCO, 1995, to hundreds of essential medicines and over 1,000 specified formulations today. National List of Essential Medicines is reviewed periodically to reflect evolving treatment needs, disease burdens and clinical priorities.

Medicines outside direct price controls remain regulated through market monitoring and limits on annual price increases. A stable regulatory framework supports long-term investment in manufacturing, quality and research, while allowing government intervention where affordability concerns arise.

India's pharma success has been driven as much by competition as by regulation. Across numerous therapeutic categories, multiple manufacturers offer medicines containing the same molecule. Competition encourages manufacturing efficiency, price differentiation and wider availability. It has helped India build a globally competitive generic medicines industry. But pharma markets are not uniform. A widely prescribed generic with several competing brands operates differently from a specialised therapy with limited alternatives.

Applying identical regulatory measures across these categories may not produce identical outcomes. Where competition delivers affordable prices and reliable supply, it should be preserved. Where specific products or distribution practices create unreasonable prices, targeted intervention is justified. Competition and regulation should complement each other rather than be treated as competing approaches.

The current debate also requires clarity on how medicine prices are structured. Manufacturer's selling price, retailer's purchase price and printed MRP are different. The gap between these includes margins earned across the distribution chain and shouldn't automatically be treated as manufacturer's profit. The focus should be on identifying where excessive margins arise and how they affect patients.

Hospitals also incur costs in storing and handling medicines, including cold storage, staff training and ensuring safe administration. Medicine revenues can also help support subsidised treatment for government-referred and economically weaker patients. A uniform margin cap, without considering these costs, could affect hospitals' ability to provide affordable care, particularly as they expand into tier-2 and -3 cities.

The solution is in identifying excessive margins at specific points in the supply chain, while accounting for genuine hospital operating costs. Greater pricing transparency and targeted intervention under the existing regulatory framework can protect patients without affecting affordable treatment or healthcare expansion. Greater transparency across the supply chain would help regulators identify excessive margins and address them where they arise.

The existing framework has shown that focused intervention can address affordability concerns. In Feb 2019, National Pharmaceutical Pricing Authority (NPPA) capped trade margins at 30% for 42 non-scheduled anti-cancer medicines, resulting in reductions in MRPs across several brands. The experience provides a useful precedent. However, lower printed prices should not be the only measure of regulatory success.

Did patients pay less? Did medicine availability improve? Were treatment volumes sustained? Did the intervention affect new launches or supply over time? These outcomes should inform future decisions, particularly when considering whether similar measures should extend to other therapeutic categories. Evidence-based intervention is not weaker regulation, but more effective.

India's pharma industry is entering a phase where competitiveness will depend increasingly on complex generics, biologics, advanced manufacturing and innovative therapies. These capabilities require sustained investment in research, technology, quality systems and regulatory compliance.

A predictable pricing environment supports such investments. This does not mean protecting excessive profits. It means ensuring that affordability measures don't inadvertently weaken manufacturing capabilities and reliable supply that patients depend upon.

India must balance medicine affordability with a sustainable pharma industry by strengthening its existing regulatory framework through greater transparency and targeted, evidence-based intervention. Priority should be ensuring patients have access to quality medicines at reasonable prices, while supporting continued investment and innovation.