Are lower MRPs on cancer drugs translating into affordable care?, Pg11

Key Highlights:

• The National Pharmaceutical Pricing Authority (NPPA) capped trade margins at 30% for 137 non-scheduled anti-cancer drugs.
• This measure led to price reductions of up to 70%-93% for nearly 900 cancer medicine brands.
• One drug's price reportedly fell from ₹40,000 to ₹2,720, highlighting previous inflated pricing.
• Despite reductions, only 16.5% of brands saw price cuts exceeding ₹10,000 in absolute value.
• Around 194 brands, including patented drugs like Ribociclib and Pembrolizumab, recorded no price reduction.

Detailed Insights:

• The NPPA's move aims to make cancer treatment more affordable by addressing excessive margins in the supply chain.
• While significant percentage reductions were announced, many cheaper alternatives for drugs like Palbociclib and Enzalutamide already existed in the market.
• Hospitals often benefit from high Maximum Retail Prices (MRPs) due to bulk purchases, rather than negotiating lower procurement costs.
• The current intervention primarily focuses on trade margin rationalisation and does not fully address the high cost of patented drugs and immunotherapies.
• There is a concern that uniform trade margins might disincentivize hospitals from stocking cheaper generic brands, as the absolute profit margin would be lower.
• Cancer treatment involves substantial out-of-pocket expenditure, with a median cost of approximately ₹4.1 lakh, of which 80% is borne by patients.
• Existing health insurance schemes like Ayushman Bharat, with ₹5 lakh coverage, may not be sufficient for all cancer patients.
• India's 5-year survival rate for breast cancer (65.5%) is significantly lower than in high-income countries (90%), partly due to affordability issues.
• Proposed solutions include a dedicated national mission for cancer, strengthening public healthcare facilities, and strategic pooled procurement by government institutions.
• The government can utilize powers under the Essential Commodities Act to regulate margins and mandate price disclosure across the supply chain.

Key Concepts Involved:

• National Pharmaceutical Pricing Authority (NPPA): A government regulatory body that fixes and revises the prices of scheduled and non-scheduled drugs in India.
• Trade Margin Rationalisation: The process of capping the profit margin allowed for distributors, wholesalers, and retailers on the selling price of a drug.
• Essential Commodities Act: An Indian parliamentary act that provides for the control of production, supply, and distribution of certain commodities deemed essential.
• Ayushman Bharat: A flagship national health protection scheme in India that provides health coverage to vulnerable families.