India Expands Price Caps: 137 Cancer Medicines Face 30% Margin Limit

The Indian government has extended a 30% cap on trade margins to 137 cancer medicines, effective starting next month. This regulatory action follows a directive from the Supreme Court, which ordered the expansion after examining how hospitals and retailers inflate drug costs. The move aims to lower out-of-pocket expenses for patients who often delay treatment due to high prices.

The legal action originated from the case of Sarojam Radhakrishnan, a retired bank clerk in Kerala. Diagnosed with breast cancer in 2021, she faced monthly treatment costs exceeding 63,000 rupees, a sum her family could not sustain. In 2022, she petitioned the Kerala high court to intervene, arguing that the state needed to manage the cost burden on low-income families.

Justices Vikram Nath and Sandeep Mehta reviewed the pricing structure during a hearing on September 29. They identified specific instances where hospitals purchased drugs for 2,700 rupees but sold them to patients for 27,000 rupees. The court labeled these inflated margins as carnage and extortion, noting that distributors and chemists captured large portions of the final price.

Data from the National Pharmaceutical Pricing Authority indicated that trade markups on certain cancer drugs averaged 170%, with some cases exceeding 700%. A 30% margin cap had previously applied to 42 drugs, leaving many others without such restrictions. The government has now added 137 additional medicines to the regulated list to close this gap.

The Department of Pharmaceuticals stated that the new measures are expected to reduce medicine prices by up to 70%. The department projected that cancer patients would save 2,500 crore rupees annually, a figure equivalent to approximately £199 million. This reduction targets the direct costs paid by families, aiming to make essential treatments more accessible.

Financial constraints remain a primary barrier to care in India. Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute and Research Centre, noted that many patients avoid free diagnosis camps in Gurgaon due to fear of the subsequent costs. Cancer drug prices currently range from 38,000 to 380,000 rupees, a figure that causes many families to leave consultations without starting treatment.

The Public Health Foundation of India reports that healthcare spending pushes approximately 55 million Indians below the poverty line every year. While the Ayushman Bharat insurance scheme covers some cancers, it provides only 500,000 rupees in annual coverage per family. This amount equals the cost of a single dose of Kadcyla, a breast cancer drug that may require up to 14 doses per patient.

Dr. Ravi Kannan, a surgical oncologist in Assam, described the decision as a welcome step for patients who struggle to sustain long-term treatment. However, Jyotsna Singh, co-convener of the Working Group on Access to Medicines and Treatments, argued that the change requires a total overhaul of the healthcare system. She warned that hospitals might offset lower drug prices by increasing other service charges.

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 to explain why the margin cap applies only to cancer drugs and not to all non-patented medicines. The government has until October 27 to provide a response to this query. Radhakrishnan, whose case triggered the review, died in September 2022 while her legal petition was still pending.