Price cap: Generic cancer drugs see sharp price cuts, no change for single-source medicines, Pg11

Key Highlights:

• The government capped trade margins for 137 cancer medicines, leading to revised Maximum Retail Prices (MRPs) effective from November 9.
• Out of 543 formulations, prices remained unchanged for 146, while 21 saw reductions of less than Rs 100.
• Patented cancer drugs, including Pembrolizumab (Keytruda) and Ribociclib (Kryxana/Kisqali), did not experience any price changes.
• Significant price reductions were observed for some generic drugs, with Thiotepa (Samtepa) seeing a 91% cut and Pertuzumab (Hertumab) a 68% reduction.
• The average price change across all formulations was just over Rs 5,000, despite some substantial individual price drops.

Detailed Insights:

• The National Pharmaceutical Pricing Authority (NPPA) had anticipated MRP reductions broadly in the range of 20% to 70% following the trade margin cap.
• Experts noted that trade margin rationalization is largely ineffective for patented drugs due to the absence of competition.
• A government pilot project initiated in 2019, which included 34 drugs, also failed to control the cost of some medicines, with Ribociclib's monthly cost increasing significantly.
• Critics suggest that capping margins over manufacturing or import costs, rather than the first point of sale, would prevent companies from manipulating prices.
• For patented medicines, existing provisions under the Indian Patents Act, 1970, such as compulsory licensing, need to be utilized to ensure affordability.

Key Concepts Involved:

• Trade Margin Rationalization (TMR): A drug-pricing method that caps the profit margin between the manufacturer's price to the trade and the consumer's Maximum Retail Price (MRP).
• Generic Drugs: Medications with the same active ingredients, safety, dosage, quality, and strength as their brand-name counterparts, available after the original drug's patent expires.
• Patented Drugs: New drugs protected by intellectual property rights (patents), granting exclusive manufacturing and selling rights to the innovator company for a period.
• National Pharmaceutical Pricing Authority (NPPA): A government regulatory agency in India responsible for controlling drug prices, enforcing the Drugs (Prices Control) Order (DPCO), and ensuring the availability and accessibility of medicines.