India Caps Cancer Drug Markups After Court Cites Extortion

The Indian government will lower the cost of 137 cancer treatments starting next month. The action follows a Supreme Court ruling that described hospital and retailer markups as extortion. The new pricing structure extends an existing 30% cap on trade margins to these additional drugs. This measure aims to reduce out-of-pocket expenses for patients who often sell land or incur debt to afford treatment.

The legal challenge originated with Sarojam Radhakrishnan, a former bank clerk from Kerala. She was diagnosed with breast cancer in 2021. Her doctors prescribed targeted therapies that cost more than 63,000 rupees per month. Her family could not sustain that expense. In 2022, she petitioned the Kerala high court to compel the government to intervene. The case later reached the nation's highest court.

Justices Vikram Nath and Sandeep Mehta reviewed the supply chain costs during a hearing on September 29. They noted that one specific drug supplied to hospitals for 2,700 rupees was sold to patients for 27,000 rupees. The court termed this disparity a form of carnage. The National Pharmaceutical Pricing Authority found that trade markups on certain cancer drugs averaged 170%. In extreme cases, the markup exceeded 700%. The government had previously applied the 30% cap to 42 drugs. The current expansion brings the total number of covered medicines to 137.

The Department of Pharmaceuticals stated that the new cap is expected to reduce medicine prices by up to 70%. Officials estimate that cancer patients will save 2,500 crore rupees, or 199 million pounds, annually. This financial relief addresses a documented burden where healthcare spending pushes approximately 55 million Indians below the poverty line each year.

Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute and Research Centre, observed that many patients avoid free diagnosis camps in Gurgaon. He explained that families fear the diagnosis because they lack funds for treatment. Cancer drugs currently range from 38,000 to 380,000 rupees. Dr. Ravi Kannan, a surgical oncologist in Assam, described the decision as a welcome step for patients who often start treatment but cannot continue it due to cost.

Jyotsna Singh, co-convener of the Working Group on Access to Medicines and Treatments, argued that a total overhaul of healthcare is necessary. She called for transparency and regulation across the entire supply chain. Singh warned that hospitals might offset lower drug prices by increasing other charges. She also noted that companies may seek legal loopholes.

The Supreme Court asked government lawyers to explain why the cap applies only to cancer drugs and not to all non-patented medicines. The government must respond by October 27. Radhakrishnan died in September 2022 while her case was pending in Kerala.