New rules cut costs for 137 cancer drugs by up to 70%

Patients in India will pay less for 137 cancer medicines starting next month. The government extended a 30% cap on trade margins to these drugs, a change that is expected to lower prices by as much as 70%. The Department of Pharmaceuticals stated that this measure will help patients save 2.5 trillion rupees, or about 199 million pounds, in annual out-of-pocket expenses.

The policy stems from a legal challenge brought by Sarojam Radhakrishnan, a former bank clerk in Kerala. Diagnosed with breast cancer in 2021, Radhakrishnan faced monthly treatment costs exceeding 63,000 rupees. Her family could not afford the targeted therapies prescribed by her doctors. In 2022, she petitioned the Kerala High Court to compel the government to reduce these costs. Radhakrishnan died in September 2022 while her case was still pending.

When the case reached the Supreme Court, justices examined the pricing structure of these medicines. In a hearing on 29 September, Justices Vikram Nath and Sandeep Mehta cited a specific example where a drug supplied to hospitals for 2,700 rupees was sold for 27,000 rupees. The court described the wide margins enjoyed by hospitals, distributors, and chemists as "carnage" and "extortion." Analysis by the National Pharmaceutical Pricing Authority showed that trade markups on some cancer drugs averaged 170%, with some cases exceeding 700%.

The current pricing landscape leaves many patients struggling to access care. Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute, noted that few people attend free diagnosis camps because they fear they cannot afford treatment if cancer is found. Cancer drugs typically range from 38,000 to 380,000 rupees. Studies by the Public Health Foundation of India indicate that healthcare spending pushes approximately 55 million Indians below the poverty line each year.

Existing insurance coverage offers limited protection. The government's Ayushman Bharat scheme provides 500,000 rupees in annual coverage per family. This amount equals the cost of one dose of Kadcyla, a breast cancer drug for which patients may require up to 14 doses. Dr. Ravi Kannan, a surgical oncologist in Assam, called the new margin cap a "welcome step" that may help families sustain treatment longer.

The Supreme Court has also asked government lawyers to explain why the cap applies only to cancer drugs rather than all non-patented medicines. The government must respond by 27 October. Jyotsna Singh, co-convener of the Working Group on Access to Medicines, warned that hospitals might offset lower drug prices by raising other charges and called for a "total overhaul" of healthcare regulation.

India recorded about 1.56 million new cancer cases last year, an increase from 1.39 million in 2020. The new price caps take effect next month, expanding the list of drugs subject to margin controls from 42 to 179 total medicines.