India’s drug pricing regulator Wednesday capped at 30 per cent the maximum trade margins for 42 life-saving cancer medicines, in a move it expects will make these drugs affordable. However, some patient groups claim the regulator’s latest order not only lacks transparency, but will also not have a major impact in reducing prices of these medicines for several patients already purchasing them at discounts from traders.
The National Pharmaceutical Pricing Authority (NPPA) in a notification stated that it was invoking extraordinary powers under drug pricing regulations “in public interest” to cap the trade margins of these medicines. This includes breast cancer injection bevacizumab, marketed by companies like Roche under the brand Avastin, Biocon as Krabeva, Mylan as Abevmy and Hetero Drugs as Cizumab. According to online pharmacy app 1mg, the maximum retail prices (MRPs) of a 100 mg vial of this injection would vary from Rs 21,000 to Rs 29,423.
Another drug in this list includes crizotinib, sold by Pfizer under the brand Crizalk at an MRP of Rs l.07 lakh for 60 capsules of 250 mg and Rs 97,884 for 60 capsules of 200 mg, according to 1mg. These drugs had so far not been under price control, but now their MRPs cannot be marked up more than 42 per cent from the price at which the stockist has purchased them from the manufacturer or marketing firm, a government official told The Indian Express on condition of anonymity.
According to the Ministry of Chemicals and Fertilizers, the MRPs of 105 brands are expected to drop up to 85 per cent. “This would provide a saving of minimum Rs 105 crore to consumers,” the ministry stated in a release.
However, around 45 of these brands — over 40 per cent — will see MRPs reducing only up to 25 per cent. Five brands are expected to see a price reduction of 70 per cent and above. Around 12 brands will see prices dropping 50-70 per cent, while 43 brands will a 25-50 per cent drop, according to the ministry.
“The issue of trade margins is not subject to a few drugs and India needs to cap trade margins at the distributor, hospital and retail level. Trade margins of 30 per cent are too high, because, if you look at the trade margins that South Africa has fixed under its legislation across the board for all medicines, it does not exceed 10 per cent,” said Leena Meghaney, South Asia Head-Access Campaign, Medecins Sans Frontieres.
“In capping these margins, the government has not considered the cost of production at all, there has been no consultation process so that patients can bring data to them and there is no transparency on how this 30 per cent was arrived at,” she told The Indian Express.
May not help those buying at discounts
The move may help bring down prices of the medicines, especially for patients buying these at hospitals. But it may not have much impact for those who have already been buying at discounts from wholesalers. NPPA also needs to properly enforce this to ensure the caps are not circumvented, as patients will not be able to catch violations because there is no transparency in the prices charged across the supply chain.
According to Malini Aisola of patient activist group All India Drug Action Network (AIDAN), NPPA’s latest move may be effective in bringing down prices for patients buying them at hospitals, which generally bill them at MRP. However, it may not be as effective for patients buying the drugs through wholesalers or stockists that already give them large discounts, she said.
“There are big discounts in the retail chain, so almost nobody ever pays MRP. This (discounts) is a common part of sales strategies for these prohibitively priced drugs, so retail prices are not likely to be significantly reduced by these trade margin caps,” she told The Indian Express.
“However, patients will benefit in hospitals which were undoubtedly indulging in profiteering by taking massive cuts,” she added.