India caps cancer drug margins to cut costs by up to 70%

Starting next month, prices for 137 cancer medications will drop in India as the government applies a 30% cap on trade margins. This move follows a Supreme Court ruling that labeled the previous pricing structure as carnage and extortion. The change aims to reduce out-of-pocket costs for patients who often face financial ruin during treatment.

The legal battle was initiated by Sarojam Radhakrishnan, a former bank clerk in Kerala diagnosed with breast cancer in 2021. Her monthly treatment cost exceeded 63,000 rupees, a sum her family could not cover. She petitioned the Kerala high court in 2022 for government intervention. When the case reached the supreme court, justices Vikram Nath and Sandeep Mehta examined the supply chain. They cited an example where a drug costing 2,700 rupees at the hospital level was sold for 27,000 rupees.

The National Pharmaceutical Pricing Authority analyzed trade mark-ups and found averages of 170% for some drugs, with extreme cases exceeding 700%. While a 30% margin cap already applied to 42 drugs, many others remained unregulated. The government has now extended this restriction to an additional 137 medicines. The Department of Pharmaceuticals stated the measure could lower prices by up to 70%. It also projected annual savings of 2,500 crore rupees for cancer patients.

The financial strain on Indian families is severe. 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 fear the diagnosis because they lack funds for treatment. Cancer drug prices range from 38,000 to 380,000 rupees. Studies by the Public Health Foundation of India indicate that healthcare spending pushes approximately 55 million Indians below the poverty line annually. The Ayushman Bharat insurance scheme provides 500,000 rupees in annual coverage per family. This amount equals the cost of one dose of Kadcyla, a breast cancer drug that may require up to 14 doses.

Dr. Ravi Kannan, a surgical oncologist in Assam, described the decision as a welcome step for access to necessary drugs. He noted that some families start treatment but cannot sustain it. Jyotsna Singh, co-convener of the Working Group on Access to Medicines, called for a total overhaul of healthcare with greater transparency. She warned that hospitals might raise other charges to offset lower drug prices. India records about 1.56 million new cancer cases a year, up from 1.39 million in 2020.

The supreme court has questioned why the cap applies only to cancer drugs and not all non-patented medicines. Government lawyers must respond by 27 October. Radhakrishnan, who died in September 2022 while her case was pending, did not live to see the price cuts she sought.