Supreme Court Ruling Triggers Up to 70 Percent Price Drop for 137 Cancer Medicines

Starting next month, the cost of 137 cancer medicines in India will drop by as much as 70 percent. This price reduction follows a Supreme Court ruling that imposed a 30 percent cap on trade margins for these specific drugs. The Department of Pharmaceuticals stated that the move is designed to lower out-of-pocket expenses for patients, potentially saving them 2,500 crore rupees, or approximately 199 million pounds, every year.

The legal action originated from the case of Sarojam Radhakrishnan, a former bank clerk from Kerala. Diagnosed with breast cancer in 2021, she faced monthly treatment costs exceeding 63,000 rupees. Her family could not afford the prescribed targeted therapies, prompting her to petition the Kerala High Court in 2022 to intervene on pricing. The case eventually reached the nation's highest court, where the judges scrutinized the profit margins taken by hospitals, distributors, and retailers.

During a hearing on 29 September, Justices Vikram Nath and Sandeep Mehta criticized the current pricing structure. They described the situation as "carnage" and "extortion." The justices cited a specific example of a cancer drug supplied to hospitals for 2,700 rupees but sold for 27,000 rupees. This tenfold increase illustrated the large margins that the court found excessive in the supply chain.

Data from the National Pharmaceutical Pricing Authority revealed that trade mark-ups on certain cancer drugs averaged 170 percent, with some cases exceeding 700 percent. While a 30 percent margin cap had already applied to 42 drugs, the government has now extended that restriction to 137 additional medications. This expansion aims to cover a wider range of treatments that previously fell outside the regulatory limit.

The financial strain on Indian families is substantial. Cancer treatments currently range in price from 38,000 to 380,000 rupees. Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute and Research Centre, noted that many people avoid free diagnosis camps because they fear they cannot afford the treatment if cancer is detected. Studies by the Public Health Foundation of India indicate that healthcare costs push roughly 55 million Indians below the poverty line annually.

Insurance coverage remains limited for many patients. The government's Ayushman Bharat scheme provides 500,000 rupees in annual coverage per family. This amount equals the cost of a single dose of Kadcyla, a breast cancer drug that patients may require up to 14 times. Dr. Ravi Kannan, director of Cachar Cancer Hospital and Research Centre in Assam, called the new ruling "a welcome step" that may help more patients sustain their treatment.

India records approximately 1.56 million new cancer cases each year, an increase from 1.39 million in 2020. The Supreme Court has also directed government lawyers to explain why the margin cap should not apply to all non-patented medicines. The government must respond to this query by 27 October. The ruling came after Radhakrishnan died in September 2022 while her case was still pending in the Kerala courts.

Jyotsna Singh, co-convener of the Working Group on Access to Medicines and Treatments, said a "total overhaul" of healthcare is required. She warned that hospitals might offset lower drug prices by increasing charges in other areas. The court's intervention directly addresses the profit margins that kept essential medicines out of reach for many families.