137 Indian Cancer Drugs Face 30% Margin Cap
A Supreme Court order forces a reduction in trade markups, with officials projecting savings of up to 2,500 crore rupees for patients each year.
By Carmen Wojcik ·
Effective next month, 137 cancer medicines in India will be subject to a strict 30% cap on trade margins. This regulatory move follows a Supreme Court ruling that labeled previous hospital and retailer markups as extortion.
The legal action originated from a 2022 petition filed by 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. When the case reached the nation's highest court, justices Vikram Nath and Sandeep Mehta reviewed the supply chain economics. They cited specific examples where a drug costing 2,700 rupees at the hospital level was sold for 27,000 rupees to patients.
Data from the National Pharmaceutical Pricing Authority revealed that average trade markups on certain cancer drugs reached 170%, with some instances exceeding 700%. While a 30% margin cap had already applied to 42 specific drugs for several years, the government has now extended this limit to 137 additional medications.
The Department of Pharmaceuticals stated that the new cap is expected to lower medicine prices by as much as 70%. The department projects this change will help cancer patients save approximately 2,500 crore rupees, or 199 million pounds, annually by reducing out-of-pocket expenses.
Healthcare costs remain a primary driver of poverty in India. Studies indicate that medical spending pushes about 55 million people below the poverty line every year. Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute, noted that many patients avoid free diagnosis camps because they lack funds for subsequent treatment. Current cancer drug prices range from 38,000 to 380,000 rupees per dose.
Existing insurance coverage offers limited protection. The Ayushman Bharat scheme provides 500,000 rupees in annual coverage per family, which equals the cost of just one dose of Kadcyla, a breast cancer medication. Patients requiring up to 14 doses of such drugs often exhaust this limit quickly. Dr. Ravi Kannan, a surgical oncologist in Assam, described the court's decision as a welcome step for patient access.
The Supreme Court has asked government lawyers why the margin cap should not apply to all non-patented medicines. The government must respond to this query by 27 October. Radhakrishnan died in September 2022 while her case was still pending in the Kerala high court, but her petition triggered the national review of drug pricing structures.
