India Widens Drug Margin Cap After Court Rulings
137 additional cancer medicines will face a 30% trade margin cap starting next month, expanding an existing limit that had covered only 42 drugs.
By Lina Lewis ·
India's Department of Pharmaceuticals is extending a 30% ceiling on trade margins to 137 cancer drugs beginning next month, a move that builds on a cap already applied to 42 medicines. The decision follows a Supreme Court examination of mark-ups charged by hospitals, distributors and chemists.
The case traces to Sarojam Radhakrishnan, a retired bank employee in Kerala who was diagnosed with breast cancer in 2021. Her prescribed targeted treatments cost more than 63,000 rupees (£500) a month, a figure her family could not sustain. She petitioned the Kerala High Court in 2022 seeking government intervention on pricing. Radhakrishnan died in September 2022 while the matter was still pending.
At a hearing on 29 September, justices Vikram Nath and Sandeep Mehta reviewed mark-up data and called the situation "carnage" and "extortion." They cited one cancer drug supplied to hospitals at 2,700 rupees that carried a retail price of 27,000 rupees. Analysis from the National Pharmaceutical Pricing Authority found average trade mark-ups of 170% on some cancer drugs, with individual cases exceeding 700%.
The Department of Pharmaceuticals said the expanded cap "is expected to reduce medicine prices by up to 70% and help cancer patients save 2,500 crore rupees [£199m] annually," lowering out-of-pocket spending for patients. Studies by the Public Health Foundation of India show that healthcare costs push roughly 55 million Indians below the poverty line each year.
Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute and Research Centre, said turnout at free diagnosis camps run by the Indian Cancer Society in Gurgaon is low. "They're too scared," he said, because a diagnosis would arrive without any money to pay for treatment. Cancer drugs run from 38,000 to 380,000 rupees, and many families leave the consulting room after hearing the estimate. Insurance coverage is limited: the Ayushman Bharat scheme provides 500,000 rupees of annual cover per family, which equals the price of one dose of Kadcyla, a breast cancer drug for which patients may need up to 14 doses.
Dr. Ravi Kannan, a surgical oncologist who directs the Cachar Cancer Hospital and Research Centre in Silchar, Assam, said some families begin treatment but cannot keep paying for it. He called the decision "a welcome step" if it lets more patients get the drugs they need. Jyotsna Singh, co-convener of the Working Group on Access to Medicines and Treatments, said a "total overhaul" of healthcare is required, with transparency and regulation across the supply chain. She added that hospitals might offset lower drug prices by raising charges elsewhere.
The Supreme Court has also directed government lawyers to explain why the margin cap should apply only to cancer drugs rather than all non-patented medicines, with a response due 27 October. India records about 1.56 million new cancer cases a year, compared with 1.39 million in 2020.
