India extends 30% margin cap to 137 cancer drugs, promising up to 70% price cuts

The Indian government will reduce the cost of 137 cancer medicines starting in November. This action extends an existing 30% cap on trade margins to a wider list of drugs. Officials project the change will lower prices by as much as 70% and save patients 2,500 crore rupees, or approximately 199 million pounds, each year.

The policy shift follows a legal battle initiated by Sarojam Radhakrishnan, a retired bank clerk in Kerala. Diagnosed with breast cancer in 2021, she faced monthly treatment costs exceeding 63,000 rupees. In 2022, she petitioned the Kerala High Court to intervene, arguing the costs were unaffordable for her family. The case eventually reached the Supreme Court.

At a hearing on 29 September, Justices Vikram Nath and Sandeep Mehta reviewed the pricing structures of hospitals and retailers. They described the current system as causing 'carnage' and 'extortion'. The judges cited a specific example where a drug supplied to hospitals for 2,700 rupees was sold for 27,000 rupees. This disparity highlighted the large margins retained by distributors and chemists.

Data from the National Pharmaceutical Pricing Authority indicated that trade mark-ups on certain cancer drugs averaged 170%, with some instances exceeding 700%. While a 30% margin cap had applied to 42 drugs for several years, many other essential medications remained excluded from that restriction. The new directive adds the remaining 137 drugs to the regulated list.

The Department of Pharmaceuticals stated that the measure is designed to cut out-of-pocket expenses for patients. Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute and Research Centre, noted that fear of cost often deters people from attending free diagnosis camps. He observed that families frequently abandon consultations when hearing drug prices that range from 38,000 to 380,000 rupees.

Current insurance coverage provides limited protection. The Ayushman Bharat scheme offers 500,000 rupees in annual coverage per family. This amount equals the cost of a single dose of Kadcyla, a breast cancer medication that patients may require up to 14 doses of. Dr. Ravi Kannan, director of Cachar Cancer Hospital in Assam, described the ruling as a welcome step that may help patients sustain their treatment regimens.

India records approximately 1.56 million new cancer cases annually, an increase from 1.39 million in 2020. Jyotsna Singh, co-convener of the Working Group on Access to Medicines, argued that a total overhaul of the healthcare system is necessary. She warned that hospitals might offset lower drug costs by increasing charges in other areas. The Supreme Court has asked the government to explain why the cap applies only to cancer drugs rather than all non-patented medicines, with a response due by 27 October.

The ruling arrived after Sarojam Radhakrishnan passed away in September 2022, while her legal case remained pending in Kerala. Her death underscored the urgency of the pricing issue for patients across the country.