Government Caps Cancer Drug Margins Following Legal Challenge

NEW DELHI — The Indian government is moving to reduce the price of 137 cancer drugs by imposing a 30% trade margin cap, following legal proceedings initiated by a retired bank clerk who challenged high medical mark-ups.

The price controls, set to take effect next month, follow an analysis by the National Pharmaceutical Pricing Authority which revealed that trade mark-ups on certain cancer medications averaged 170%, with extreme instances exceeding 700%. According to the Department of Pharmaceuticals, the new measure is expected to lower medicine prices by up to 70% and save cancer patients 2,500 crore rupees annually.

The policy shift stems from a legal challenge brought by Sarojam Radhakrishnan, a former bank employee from Kerala who was diagnosed with breast cancer in 2021. Radhakrishnan filed a petition in the Kerala High Court in 2022 demanding government intervention to lower drug costs. Although she died in September 2022 while her case was still pending, the litigation ultimately reached the Supreme Court.

During court hearings, Supreme Court justices Vikram Nath and Sandeep Mehta criticized hospital and retailer mark-ups, characterizing the pricing practices as “carnage” and “extortion.” During a 29 September hearing, the bench noted an instance where a life-saving cancer drug supplied to hospitals at 2,700 rupees carried a marked-up retail price of 27,000 rupees. The judges also directed the government to explain by 27 October why price caps should not be expanded to cover the entire range of non-patented drugs.

High out-of-pocket medical expenses remain a major driver of financial distress in the country. Studies by the Public Health Foundation of India indicate that healthcare spending pushes approximately 55 million Indians below the poverty line each year. While India records roughly 1.56 million new cancer cases annually—up from 1.39 million in 2020—poorer patients frequently forgo treatment, sell land, or incur heavy debt to cover medication costs.

While the central government operates a nationwide insurance scheme, Ayushman Bharat, which provides annual coverage of up to 500,000 rupees per family for certain cancer treatments, affordability across the broader supply chain remains a critical public health challenge.