India caps cancer drug mark-ups after supreme court calls pricing 'extortion'

India will cut the price of 137 cancer drugs from next month after the supreme court condemned the mark-ups charged by hospitals, distributors and chemists as "carnage" and "extortion". The government has extended its 30% cap on trade margins, previously applied to 42 medicines, to the additional cancer treatments.

The case began with Sarojam Radhakrishnan, a former bank employee in Kerala who was diagnosed with breast cancer in 2021. Doctors prescribed life-saving targeted treatments costing more than 63,000 rupees (£500) a month, far beyond what her family could afford. She petitioned the Kerala high court in 2022 for government action to bring prices down, and the case eventually reached the supreme court.

Mark-up of ten times

At a hearing on 29 September, justices Vikram Nath and Sandeep Mehta noted that a life-saving cancer drug supplied to hospitals at 2,700 rupees carried a marked-up price of 27,000 rupees. Analysis by the National Pharmaceutical Pricing Authority found trade mark-ups on some cancer drugs averaged 170%, with extreme examples exceeding 700%.

The Department of Pharmaceuticals said the measure was expected to reduce medicine prices by up to 70% and help cancer patients save 2,500 crore rupees (£199m) a year, significantly cutting what they pay from their own pockets.

Cancer drugs in India cost between 38,000 and 380,000 rupees, and studies by the Public Health Foundation of India show spending on healthcare pushes about 55 million Indians below the poverty line each year. Few can afford comprehensive health insurance. The government's Ayushman Bharat scheme provides 500,000 rupees of annual cover for a family, the price of a single dose of the breast cancer drug Kadcyla (ado-trastuzumab emtansine), of which patients may need up to 14.

Dr Ravi Kannan, a surgical oncologist and director of the Cachar cancer hospital and research centre in Silchar, Assam, said some families start treatment hoping to manage the cost but fail to return for chemotherapy or radiation. He called the decision a welcome step if it means more patients can access the drugs they need.

India records about 1.56m new cancer cases annually, up from 1.39m in 2020.

Jyotsna Singh, co-convener of the Working Group on Access to Medicines and Treatments, a civil society network, said a "total overhaul" of the healthcare system was needed, with regulation of the whole supply chain from manufacturing to the point of sale. She warned that companies and hospitals were likely to seek legal loopholes, and that hospitals might offset lower drug prices by raising charges for other items.

The judges also asked why the cap should apply only to cancer drugs and not to the entire range of non-patented medicines, giving the government until 27 October to respond. The ruling came too late for Radhakrishnan, who died in September 2022 while her case was still pending in Kerala.

Source: The Guardian.