India caps drug margins, cutting prices for 137 cancer treatments

Indian authorities will reduce the cost of 137 cancer medicines by up to 70% starting next month. The government announced this move after the country's highest court described existing price mark-ups as "carnage" and "extortion." The new pricing rules aim to lower out-of-pocket expenses for patients who often face financial ruin during treatment.

The National Pharmaceutical Pricing Authority analyzed trade mark-ups on these medications and found averages of 170% in some cases. In extreme instances, mark-ups exceeded 700%. For example, justices Vikram Nath and Sandeep Mehta noted that a specific drug supplied to hospitals for 2,700 rupees was sold for 27,000 rupees. A 30% cap on trade margins had previously applied to only 42 drugs. The government has now extended this cap to the additional 137 items.

The Department of Pharmaceuticals stated that the measure is expected to help cancer patients save 2,500 crore rupees, or 199 million pounds, annually. This reduction targets the portion of medical bills that families must pay directly. The change follows a legal challenge initiated by Sarojam Radhakrishnan, a former bank clerk in Kerala.

Radhakrishnan was diagnosed with breast cancer in 2021. Her doctors prescribed targeted treatments that cost more than 63,000 rupees, or 500 pounds, per month. Her family could not afford this amount, so she petitioned the Kerala high court in 2022 to intervene. The case eventually reached the Supreme Court, where judges examined the profit margins taken by hospitals, distributors, and chemists.

The financial pressure on Indian families is substantial. Cancer drug prices currently range from 38,000 to 380,000 rupees. Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute and Research Centre, observed 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 subsequent treatment. Many families leave consulting rooms after hearing cost estimates.

Research by the Public Health Foundation of India indicates that healthcare spending pushes approximately 55 million Indians below the poverty line each year. Insurance provides limited protection in this context. The government's Ayushman Bharat scheme offers 500,000 rupees in annual coverage per family. This amount equals the cost of one dose of Kadcyla, a breast cancer drug that patients may require up to 14 times.

Dr. Ravi Kannan, a surgical oncologist at Cachar cancer hospital and research centre in Silchar, Assam, described the decision as a welcome step. He noted that some families begin treatment but cannot sustain it over time. Jyotsna Singh, co-convener of the Working Group on Access to Medicines and Treatments, argued that a total overhaul of healthcare is needed. She called for transparency and regulation across the entire supply chain.

Singh warned that hospitals might offset lower drug prices by raising charges in other areas. She also suggested that companies may seek legal loopholes to maintain profits. India records about 1.56 million new cancer cases annually, a figure that has risen from 1.39 million in 2020. The Supreme Court has asked government lawyers to explain why the price cap applies only to cancer drugs and not to all non-patented medicines.

The government must respond to this query by 27 October. The original petition was filed by Radhakrishnan, who died in September 2022 while her case was still pending in Kerala. Her legal team continued the proceedings, leading to the current pricing directive.