Hospitals broadly welcome the prospect of cheaper oncology medicines, but HCG warns that tighter margins could deter manufacturers from bringing patented and newer treatments to India.
The Indian government’s move to cap trade margins at 30% on non-scheduled anti-cancer drugs has drawn a cautious welcome from cancer-care providers even as it raises broader questions about pricing, access and innovation. Ajai Kumar, chairman and managing director of HCG Group of Hospitals, said the measure should not materially damage the hospital chain, but warned it could discourage the introduction of newer and patented oncology medicines into India.
According to reporting by NDTV Profit, Kumar said most cancer medicines used by hospitals are already subject to some form of price control, limiting the likely financial impact on HCG. Analysts cited in market commentary expect the effect on hospital earnings before interest, tax, depreciation and amortisation to be modest, while the move was also seen as less aggressive than investors had feared. Shares of multispeciality hospital operators rose after the announcement, with HCG viewed as more exposed than larger diversified groups because oncology accounts for the vast bulk of its revenue.
The policy, which the government has approved for anti-cancer medicines outside the price-controlled schedule under the Drugs Prices Control Order, is expected to reduce prices sharply for patients. Reuters-style reporting across Indian business publications has put the potential savings at up to 70% on some medicines and annual patient savings at around ₹2,500 crore. The cap is understood to cover branded and generic drugs, as well as domestic and imported products, including patented and non-patented medicines. Government officials have said the aim is to curb excessive trade mark-ups while preserving access to life-saving treatment.
Kumar, however, said his deeper concern was not hospital profitability but supply and innovation. He argued that very low prices can make it uneconomic for manufacturers to bring certain medicines to India, pointing to long-standing shortages of some established oncology drugs. He also questioned whether tighter pricing would discourage investment in new cancer therapies, saying India must balance affordability with the need to attract research, development and innovation.
The debate comes as policy makers and industry continue to wrestle with how cancer drugs are sold through hospital pharmacies. Legal and competition experts cited in related coverage have pointed to cases in which patients are said to pay far more than manufacturing costs once drugs move through the distribution chain, particularly when medicines are bought only from a hospital’s own pharmacy. Kumar rejected the suggestion that HCG was seeing such mark-ups, and said patients treated under Ayushman Bharat receive packaged care rather than having to purchase medicines separately. Even so, he said HCG and the wider industry would study the final terms closely and make their case to officials on the long-term consequences.
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