India Caps Cancer Drug Markups to Slash Patient Costs

Indian patients will pay less for 137 cancer medicines starting next month. The government extended a 30 percent cap on trade margins to these drugs, a move that is expected to cut prices by as much as 70 percent. This change follows a Supreme Court ruling that described current hospital and retail markups as 'extortion' and 'carnage.'

The legal challenge originated with Sarojam Radhakrishnan, a former bank clerk from Kerala. She was diagnosed with breast cancer in 2021 and prescribed targeted treatments that cost more than 63,000 rupees, or approximately 500 pounds, per month. Her family could not afford that expense, so she petitioned the Kerala high court in 2022 for government intervention to lower costs.

Justices Vikram Nath and Sandeep Mehta of the Supreme Court reviewed the pricing structure during a hearing on 29 September. They cited an example where a cancer drug supplied to hospitals for 2,700 rupees was sold to patients for 27,000 rupees. The court found that distributors, chemists, and hospitals were retaining large portions of the final price.

Data from the National Pharmaceutical Pricing Authority indicated that trade markups on some cancer drugs averaged 170 percent, with some instances exceeding 700 percent. A 30 percent margin cap had already applied to 42 drugs for several years. The new directive expands this protection to an additional 137 medications.

The Department of Pharmaceuticals stated that the measure will help cancer patients save 2,500 crore rupees, or about 199 million pounds, annually. This reduction targets the out-of-pocket costs that force many poor families to skip treatment, sell land, or accumulate debt.

Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute, noted that few people attend free diagnosis camps in Gurgaon. He explained that patients are often too scared to be tested because they lack funds for treatment. Cancer drug prices currently range from 38,000 to 380,000 rupees, a figure that often stops families from proceeding with care.

Studies by the Public Health Foundation of India show that healthcare spending pushes roughly 55 million Indians below the poverty line each year. The government's Ayushman Bharat insurance scheme covers some cancers but limits annual benefits to 500,000 rupees per family. This amount equals the cost of one dose of Kadcyla, a breast cancer drug for which patients may require up to 14 doses.

Dr. Ravi Kannan, a surgical oncologist in Assam, called the decision a welcome step for patient access. However, Jyotsna Singh, co-convener of the Working Group on Access to Medicines, warned that hospitals might raise other charges to offset lower drug costs. She also suggested that companies may seek legal loopholes in the new regulations.

India records approximately 1.56 million new cancer cases annually, an increase from 1.39 million in 2020. The Supreme Court has asked government lawyers why the margin cap should not apply to all non-patented medicines. The government has until 27 October to respond to this query.

The ruling arrived after Sarojam Radhakrishnan died in September 2022. Her case remained pending in Kerala at the time of her death, but her petition ultimately drove the national policy change now taking effect.