Margin Cap Cuts 137 Cancer Drug Prices

A new government rule will lower the cost of 137 cancer medicines in India starting next month. The policy responds to a Supreme Court ruling that criticized high trade margins as a form of extortion.

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. In 2022, she petitioned the Kerala High Court to intervene and reduce these expenses.

Justices Vikram Nath and Sandeep Mehta reviewed the supply chain during a September 29 hearing. They noted that one drug supplied to hospitals at 2,700 rupees was sold to patients for 27,000 rupees. The court labeled the pricing structure as carnage and extortion, highlighting the large profits taken by hospitals, distributors, and chemists.

The National Pharmaceutical Pricing Authority found average trade markups of 170% on some drugs, with extreme cases exceeding 700%. The government extended an existing 30% margin cap, which previously covered 42 drugs, to these additional 137 items. The Department of Pharmaceuticals stated this move is expected to cut prices by up to 70% and save patients 250 billion rupees annually.

Financial barriers remain a primary cause of delayed treatment. Krishan Kalra, a former council member at the Rajiv Gandhi Cancer Institute, noted that fear of high costs prevents many from attending free diagnosis camps. Cancer drugs currently range from 38,000 to 380,000 rupees. The Ayushman Bharat insurance scheme provides only 500,000 rupees in annual coverage, which equals the cost of a single dose of the breast cancer drug Kadcyla.

India reported 1.56 million new cancer cases this year, an increase from 1.39 million in 2020. Jyotsna Singh, a co-convener of the Working Group on Access to Medicines, warned that hospitals might offset lower drug prices by raising other charges. The Supreme Court has also questioned why the cap does not apply to all non-patented medicines, giving the government until October 27 to respond.

The ruling arrived after Radhakrishnan died in September 2022 while her case remained pending. Dr. Ravi Kannan, a surgical oncologist in Assam, described the new rules as a welcome step that may help more patients sustain their treatment regimens.