The article examines the drug pricing policy and cost containment measures in India by drawing on the data of spending on and price variations of cancer drugs. Results show that medicines held the highest share in the out-of-pocket (OOP) cancer medical expenditure in private and public sectors, and it was more pronounced for private sector and in outpatient care. Medicine expenditure has a positive and significant causal association to OOP medical expenditure of cancer patients even when other medical costs, type of care and socio-economic backgrounds are controlled for. Further, there were significant price variations for recently approved anticancer medicines across brands, which are under and outside price control. The results confirm the ineffectiveness of price control measures for cancer drugs under market-based pricing policy and the inadequacy of existing risk protection measures in India. This calls for the adoption of appropriate cost containment measures, which include expanding the scope of all forms, types and severities of cancer and anticancer medications under health insurance and adoption of a uniform treatment protocol across private and public sectors.
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