India caps cancer drug margins at 30 percent to cut patient costs
The extension of the price cap to 137 additional medicines follows a Supreme Court ruling that described hospital markups as extortion.
By Jason Kovalenko ·
India will extend a 30 percent cap on trade margins to 137 additional cancer medicines starting next month. The Department of Pharmaceuticals announced the move after the Supreme Court ruled that excessive markups by hospitals and retailers constituted extortion. The change is expected to lower the price of these specific drugs by up to 70 percent.
The National Pharmaceutical Pricing Authority analyzed trade markups on cancer drugs and found an average increase of 170 percent. In extreme cases, markups exceeded 700 percent. A 30 percent cap had previously applied to only 42 drugs. The government has now included 137 more drugs on the regulated list to address the high out-of-pocket costs for patients.
The legal battle began with Sarojam Radhakrishnan, a retired bank clerk in Kerala. She was diagnosed with breast cancer in 2021. Her doctors prescribed targeted treatments that cost more than 63,000 rupees per month. Her family could not afford the bill, so she petitioned the Kerala high court in 2022 to force the government to lower costs.
When the case reached the Supreme Court, Justices Vikram Nath and Sandeep Mehta reviewed the pricing structures. On 29 September, they cited one drug supplied to hospitals for 2,700 rupees but sold at 27,000 rupees. The justices described the situation as carnage and extortion. They found that hospitals, distributors, and chemists were earning large margins on these essential medicines.
The Department of Pharmaceuticals stated that the new measure will help cancer patients save 2,500 crore rupees annually. This amount equals roughly 199 million pounds. The goal is to reduce the financial burden on families who often skip treatment or sell assets to pay for care. Cancer drugs in India range in price from 38,000 to 380,000 rupees.
Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute and Research Centre, noted that many people avoid free diagnosis camps in Gurgaon. He said patients are often too scared to attend because they lack the money for treatment if a diagnosis is confirmed. Studies by the Public Health Foundation of India indicate that healthcare spending pushes about 55 million Indians below the poverty line each year.
Dr Ravi Kannan, a surgical oncologist in Silchar, Assam, called the decision a welcome step. He noted that some families start treatment but cannot sustain it due to cost. The government's Ayushman Bharat insurance scheme provides only 500,000 rupees of annual cover per family. This amount equals the cost of one dose of Kadcyla, a breast cancer drug for which patients may need up to 14 doses.
India records about 1.56 million new cancer cases annually, up from 1.39 million in 2020. The Supreme Court has asked the government why the cap applies only to cancer drugs and not to all non-patented medicines. The government must respond by 27 October. Radhakrishnan died in September 2022 while her case was still pending.
