India Caps Cancer Drug Margins After Court Calls Mark-Ups 'Extortion'

India will cut prices on 137 cancer drugs from next month after the supreme court condemned hospital mark-ups as "extortion" — a case triggered by a retired bank clerk named Sarojam Radhakrishnan.

The Department of Pharmaceuticals said: "The measure is expected to reduce medicine prices by up to 70% and help cancer patients save 2,500 crore rupees [£199m] annually, significantly reducing the amount they pay from their own pockets."

At a hearing on 29 September, justices Vikram Nath and Sandeep Mehta called the situation "carnage" and "extortion". They cited one life-saving cancer drug supplied to hospitals at 2,700 rupees and sold at 27,000 rupees — a tenfold jump before it reached a patient.

The numbers behind the ruling get worse. Analysis by the National Pharmaceutical Pricing Authority found trade mark-ups on some cancer drugs averaging 170%, with extreme cases above 700%. A 30% trade margin cap already covered 42 drugs. Now the government has extended it to 137 more.

Who forced the change?

Radhakrishnan, a former bank employee in Kerala, was diagnosed with breast cancer in 2021. Doctors prescribed targeted treatments. The monthly cost — more than 63,000 rupees (£500) — sat far beyond her family's means. In 2022, realizing thousands of families faced the same ruin, she filed a petition to the Kerala high court demanding government intervention. The case climbed to the supreme court. Radhakrishnan died in September 2022 while it was still pending.

The economics she challenged are stark. Cancer drug prices in India range from 38,000 to 380,000 rupees. Many families quietly walk out of the consulting room when they hear the estimated cost of treatment.

How big is the affordability crisis?

Studies by the Public Health Foundation of India show healthcare spending pushes about 55 million Indians below the poverty line each year. Few can afford comprehensive health insurance premiums. The government's Ayushman Bharat scheme covers some cancers but caps annual family cover at 500,000 rupees — the price of a single dose of Kadcyla (ado-trastuzumab emtansine), a breast cancer drug. Patients may need up to 14 doses.

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

Krishan Kalra, a former member of the council of the Rajiv Gandhi Cancer Institute and Research Centre, urges drivers, maids, cooks and tailors to attend free diagnosis camps run by the Indian Cancer Society in Gurgaon, where he lives. Very few come. "When I ask why, they say they're too scared – if something serious like cancer is detected, they haven't got the money to pay for the treatment so they prefer to remain in the dark," he said.

Dr Ravi Kannan, a surgical oncologist and director of the Cachar cancer hospital and research centre in Silchar, Assam, has watched patients abandon treatment across Indian hospitals. "Some families start the treatment, hoping against hope to manage the cost. They start but they don't come back for chemotherapy or radiation. They can't sustain the cost," he said. "The decision is a welcome step if the outcome is that more patients can access the drugs they need."

What happens next?

Jyotsna Singh, co-convener of the Working Group on Access to Medicines and Treatments, a civil society network, said companies and hospitals will likely hunt for legal loopholes around the 30% cap — for instance, hospitals offsetting cheaper drug prices by raising charges on other items. She argued a "total overhaul" of the healthcare system was needed. "Right from the cost of manufacturing a drug to the point of sale, we need to make the system transparent and regulate the entire supply chain. Only then will these drugs become available to those who need them," she said.

The supreme court has also pressed the government's lawyers on why the cap should apply only to cancer drugs and not the entire range of non-patented drugs. The government has until 27 October to answer — a deadline that could extend price controls well beyond oncology.