Supreme Court Orders 30 Percent Margin Cap on 137 Indian Cancer Drugs

The Indian government will lower the price of 137 cancer medicines starting next month. This action follows a Supreme Court decision that criticized the high mark-ups charged by hospitals and retailers. The new rules set a 30 percent cap on trade margins for these specific drugs.

The legal battle began with Sarojam Radhakrishnan, a retired bank clerk from Kerala. In 2021, she was diagnosed with breast cancer. Doctors prescribed targeted treatments that cost more than 63,000 rupees per month. Her family could not afford this expense, so she petitioned the Kerala high court in 2022 to intervene.

The case reached the Supreme Court, where judges examined the supply chain. Justices Vikram Nath and Sandeep Mehta noted that one drug supplied to hospitals for 2,700 rupees was sold to patients for 27,000 rupees. The court described the profit margins as carnage and extortion.

Data from the National Pharmaceutical Pricing Authority showed average trade mark-ups of 170 percent on some cancer drugs, with some exceeding 700 percent. A 30 percent margin cap had applied to 42 drugs for years, but the government has now extended this limit to 137 additional medicines.

The Department of Pharmaceuticals stated that the measure is expected to reduce medicine prices by up to 70 percent. This change should help patients save 2,500 crore rupees annually. The goal is to lower the out-of-pocket costs that force many families into debt.

Healthcare costs remain a barrier for many patients. Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute, noted that few people attend free diagnosis camps because they fear the cost of treatment. Cancer drugs currently range from 38,000 to 380,000 rupees. Studies indicate that healthcare spending pushes about 55 million Indians below the poverty line each year.

Insurance coverage is often insufficient. The Ayushman Bharat scheme provides 500,000 rupees of annual cover per family. This amount equals the cost of one dose of Kadcyla, a breast cancer drug for which patients may need up to 14 doses. Dr. Ravi Kannan, a surgical oncologist in Assam, called the new decision a welcome step for patient access.

India records about 1.56 million new cancer cases a year, up from 1.39 million in 2020. Jyotsna Singh, co-convener of the Working Group on Access to Medicines, said a total overhaul of healthcare is needed. She warned that hospitals might raise other charges to offset lower drug prices. The Supreme Court has asked the government to explain why the cap does not apply to all non-patented medicines, with a response due on October 27. Radhakrishnan died in September 2022 while her case was still pending.