Sarojam Radhakrishnan's Cancer Case Leads to 30% Margin Cap on 137 Indian Drugs

The Indian government extended a 30 percent cap on trade margins to 137 cancer medicines following a ruling by the Supreme Court. The order responds to a petition filed by Sarojam Radhakrishnan, a retired bank clerk from Kerala who diagnosed breast cancer in 2021. The new pricing rules take effect next month.

Radhakrishnan’s doctors prescribed targeted treatments that cost more than 63,000 rupees per month. Her family could not afford the expense. In 2022, she petitioned the Kerala high court to force the government to lower costs. The case eventually reached the Supreme Court, where justices examined the pricing practices of hospitals and retailers.

Justices Vikram Nath and Sandeep Mehta described the current system as "carnage" and "extortion." During a hearing on 29 September, they cited a specific example of a cancer drug supplied to hospitals at 2,700 rupees but sold for 27,000 rupees. The court found that distributors and chemists were retaining large portions of the profit.

Data from the National Pharmaceutical Pricing Authority showed that trade markups on some cancer drugs averaged 170 percent. In extreme cases, markups exceeded 700 percent. A 30 percent margin cap had already applied to 42 drugs for several years, but the government has now expanded the list to include 137 additional medications.

The Department of Pharmaceuticals stated that the measure is expected to reduce medicine prices by up to 70 percent. The department estimated that cancer patients will save 2,500 crore rupees, or approximately 199 million pounds, annually. This reduction aims to lower the amount patients pay out of pocket.

The financial burden of cancer treatment in India is substantial. Cancer drugs 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 few people attend free diagnosis camps in Gurgaon. He said patients are too scared to be tested because they lack the funds for treatment if a diagnosis is confirmed.

Studies by the Public Health Foundation of India indicate that healthcare spending pushes about 55 million Indians below the poverty line each year. The government’s Ayushman Bharat insurance scheme provides limited relief, covering only 500,000 rupees per family annually. This amount equals the cost of one dose of Kadcyla, a breast cancer drug for which patients may need up to 14 doses.

Dr Ravi Kannan, a surgical oncologist in Assam, called the decision a welcome step. He noted that many families begin treatment but cannot sustain it over time. Jyotsna Singh, co-convener of the Working Group on Access to Medicines and Treatments, said a total overhaul of healthcare was needed to ensure transparency across the supply chain. She warned that hospitals might raise other charges to offset lower drug prices.

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