India caps trade margins on 137 cancer drugs to cut costs by 70%

The Indian government will cap trade margins on 137 cancer medicines starting next month, a move expected to lower patient costs by up to 70%. The Department of Pharmaceuticals announced the extension on 23 October, expanding a 30% margin limit that has previously applied to only 42 drugs. Officials estimate the change will save patients 2,500 crore rupees, or roughly $199 million, in annual out-of-pocket expenses.

The policy follows a ruling by the Supreme Court of India that labeled the pricing structure of the pharmaceutical supply chain as "carnage" and "extortion." The case was initiated by Sarojam Radhakrishnan, a retired bank clerk from Kerala who was diagnosed with breast cancer in 2021. Her doctors prescribed targeted treatments with a monthly cost exceeding 63,000 rupees, a sum that overwhelmed her family's finances. Radhakrishnan filed a petition with the Kerala High Court in 2022, seeking government intervention to reduce these costs.

During a hearing on 29 September, Justices Vikram Nath and Sandeep Mehta reviewed evidence of extreme markups by hospitals, distributors, and retail chemists. The justices cited one specific cancer drug supplied to hospitals for 2,700 rupees but sold at 27,000 rupees. Analysis by the National Pharmaceutical Pricing Authority found that trade markups on certain cancer drugs averaged 170%, with some cases exceeding 700%. The new cap extends the existing 30% limit to 137 additional medicines that were previously unregulated.

The financial strain of cancer treatment in India remains a major barrier to care. Cancer drug prices range from 38,000 to 380,000 rupees, leading many families to delay treatment or sell assets. Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute and Research Centre, noted that patients often avoid free diagnostic camps because they fear the cost of subsequent treatment. Studies by the Public Health Foundation of India indicate that healthcare spending pushes approximately 55 million Indians below the poverty line annually.

Existing insurance coverage offers limited protection for many patients. The government's Ayushman Bharat scheme provides 500,000 rupees in annual coverage per family for certain cancers. However, this amount equals the cost of a single dose of Kadcyla, a breast cancer drug that may require up to 14 doses. Dr. Ravi Kannan, a surgical oncologist in Assam, stated that some families begin treatment but struggle to maintain it over time. He described the new margin cap as a "welcome step" that could improve access to necessary medications.

India records approximately 1.56 million new cancer cases each year, a rise from 1.39 million in 2020. Jyotsna Singh, co-convener of the Working Group on Access to Medicines and Treatments, called for a "total overhaul" of healthcare with greater transparency across the supply chain. She warned that hospitals might offset lower drug prices by increasing other service charges. The Supreme Court has also asked government lawyers to explain why the cap applies only to cancer drugs and not to all non-patented medicines, with a response due by 27 October.

Sarojam Radhakrishnan died in September 2022 while her case was still pending in the lower courts. Her petition brought the issue of drug affordability to the attention of the nation's highest court, leading to the current pricing reforms. The government's Department of Pharmaceuticals confirmed the new measures in a statement, emphasizing the goal of reducing the burden on cancer patients.