Cancer Drug Costs: India Caps Margins at 30% for 137 Medicines

The Indian Supreme Court has condemned the pricing of cancer treatments as "carnage" and "extortion," prompting the government to cap trade margins on 137 specific medicines. The move, which takes effect next month, aims to reduce out-of-pocket expenses for patients who often face crippling debt. Justices Vikram Nath and Sandeep Mehta highlighted the disparity during a hearing on 29 September, citing a drug sold to hospitals for 2,700 rupees that was then sold for 27,000 rupees.

The legal action originated with Sarojam Radhakrishnan, a retired bank clerk from 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. Although she died in September 2022 while the case was pending, her petition reached the nation's highest court, where judges scrutinized the profit margins enjoyed by distributors and chemists.

Data from the National Pharmaceutical Pricing Authority revealed that trade markups on some cancer drugs averaged 170%, with extreme cases surpassing 700%. A 30% margin cap had previously applied to only 42 drugs, leaving many others unprotected. The Department of Pharmaceuticals stated that extending this cap to 137 additional drugs is expected to lower prices by up to 70%. The government projects that patients will save 2,500 crore rupees annually under the new rules.

The financial strain of cancer treatment in India is severe. Krishan Kalra, a former council member at the Rajiv Gandhi Cancer Institute, noted that few people attend free diagnosis camps in Gurgaon due to fear of the associated costs. Drug prices range from 38,000 to 380,000 rupees, often deterring families from seeking care. The Public Health Foundation of India reports that healthcare spending pushes approximately 55 million people below the poverty line each year.

Existing insurance schemes provide limited relief. The Ayushman Bharat program offers 500,000 rupees in annual coverage per family, which equals the cost of a single dose of Kadcyla, a breast cancer medication. Patients may require up to 14 doses of such treatments. Dr. Ravi Kannan, director of Cachar cancer hospital in Assam, described the new margin cap as a welcome step, though he noted that some families still struggle to sustain long-term treatment.

India records roughly 1.56 million new cancer cases annually, up from 1.39 million in 2020. Jyotsna Singh, co-convener of the Working Group on Access to Medicines, argued that the sector needs a total overhaul with greater transparency. She warned that hospitals might offset lower drug costs by raising other charges, and that companies could seek legal loopholes to avoid the new caps.

The Supreme Court has asked government lawyers to explain why the margin cap applies only to cancer drugs rather than all non-patented medicines. The government has until 27 October to respond to this query. The ruling marks a shift in how regulators view the supply chain, focusing on the profits extracted between the manufacturer and the final patient.