Cancer drug prices fall by nearly Rs 6,000 after trade margin caps but patented drugs remain unchanged

There was no change in the prices of 201 of the 1,366 formulations, with the prices of another 255 formulations reducing by less than Rs100 — meaning, in total, 456 medicines saw negligible change in their prices. (File photo)

With the government’s move of capping trade margins on 137 cancer drugs coming into effect on Monday, an average reduction of almost Rs 6,000 was seen across the board. This reduction, however, was not evenly distributed, with the most expensive patented and single source drugs retaining their high prices, according to the analysis of the final list of revised drug prices released by the National Pharmaceutical Pricing Authority (NPPA).

This list is based on the revised prices of 1,366 formulations — doses, package sizes, and brands — that were submitted by the manufacturers.

How have the prices changed?

There was no change in the prices of 201 of the 1,366 formulations, with the prices of another 255 formulations reducing by less than Rs100 — meaning, in total, 456 medicines saw negligible change in their prices. The highest number of formulations, 401, saw their prices drop by Rs 1,000 to Rs 5,000. The reduction was between Rs 5,000 and Rs 10,000 for another 207 formulations and between Rs 10,000 and Rs 20,000 for another 144. There were eight medicines which saw a change of over Rs 50,000 per unit — this includes the prostate cancer drug enzalutamide manufactured by Astellas Pharma whose price dropped by around Rs 2 lakh.

Importantly, the most expensive drugs actually saw the lowest drop in prices. The prices for only four of the 57 formulations that cost more than Rs 1 lakh per unit actually went down.
This also translated into no change in prices of the patented and single source drugs — drugs marketed by only one manufacturer in India. As per the data, there were at least 62 formulations of 39 such drugs, the prices for which did not change at all.

This included drugs such as pembrolizumab — a drug that can be used for the treatment of around 18 cancers and has been included in the World Health Organisation’s list of essential medicines. An Indian Express investigation earlier had revealed that the drug remained out of reach for most Indians despite the company’s patient assistance programme. This also included breast cancer immunotherapy drugs such as ribociclib and abemaciclib for which patients have filed petitions in court to make them more accessible.

What does this mean for patients?

The move will bring some relief to patients on cancer drugs that are manufactured by several companies. “The reality is that the MRPs of cancer drugs are unreasonably high, sometimes a 100-fold higher than the actual drug cost. The trade margin rationalisation would not affect bigger pharmacy stores because they anyway sell the products at prices much lower than these inflated MRP,” said the owner of a big pharmacy store in central Delhi.

However, they added, “The revised MRP will force all stores, including the ones inside the hospitals, to also sell the drugs at lower costs. Once a patient is admitted to the hospital, they are usually asked to get the medicines from pharmacies in the premises which can charge them at MRP or prices close to it. The patients cannot object. The reduced MRP will help such patients,” they said.

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The exercise, however, would not provide much relief to patients on the newer targeted therapies, with patients lamenting that they would be paying the same amount for their treatment even now. “Trade margin rationalisation cannot make the patented drugs affordable. The government would have to use provisions in the patent law such as compulsory licensing or governmental use to bring down the prices,” said an expert on medicine patents.

What is trade margin rationalisation?

The trade margin of a medicine is essentially the difference in the price at which its is sold to the stockists — the first point of sale — and the maximum retail price listed on it. This gap is usually quite significant, sometimes going as high as 1,000% of the cost at the first point of sale. Under trade margin rationalisation (TMR), instead capping the price of each medicine — and its different formulations, doses, brands — the government caps the percentage markup at which the medicine can be sold to bring down the cost to consumer.