Significant Reduction in Cancer Drug Prices due to Trade Margin Capping

  • Posted on: 1 March 2019
  • By: Shalini.Sharma

 

Cancer is one of the leading causes of adult illness and death due to chronic non-communicable diseases in India.   India is witnessing a steady rise in cancer incidence.  The number of incident-cases has risen from 8 lakh in 2004 to an estimated 15 lakh (annually) by 2018.  Even with nearly two third of patients eventually dying of this disease, an estimated 22.5 lakh patients are currently living with cancer in India.

Cancer was reported to account for the highest out of pocket expenditure among all diseases in 2014, a substantial portion of which is spent on drugs.  It has also emerged as the major cause of distress financing among affected families leading to their impoverishment.  In fact, some studies on India suggest that about 60 and 32 percent households resort to borrowing and contributions (from friends and relatives) respectively for cancer hospitalisation. Affordability of cancer medicines is therefore the most important determinant for equitable cancer care in the country.

The National Pharmaceutical Pricing Authority (NPPA), in its Meeting dated 26thFebruary, 2019, invoked extraordinary powers in public interest, under Para 19 of the Drugs (Prices Control) Order, 2013 to bring 42 non-scheduled anti-cancer drugs under price control, through Trade Margin Rationalisation.

So far, 57 anti-cancer drugs are already under price control as scheduled formulations.  42 non-scheduled anti-cancer medicines have now been selected for price regulation by restricting trade margin on the selling price (MRP) up to 30%.  These would cover 72 formulations and 355 brands as per data available with NPPA.  More data is being collected from hospitals and manufacturers to finalise the list.

The manufacturers have been given seven days to recalculate the prices and inform the NPPA, State Drug Controllers, stockists and retailers.  The revised prices shall come into effect from 8thMarch, 2019.

As per data available with NPPA, the MRP for 105 brands will be reduced up to 85%.  Percentage wise reduction in prices of brands is as follows: -
Slab-percentage reduction in prices & No. of Brands
70% and above : 5
50% to 70% : 12
25% to 50% : 43
Up to 25% : 45
Total - 105

An approximate estimate is that after taking into account the combination drugs too, there will be a minimum saving of Rs. 200 crore per annum to cancer patients on account of this intervention.

The NPPA currently fixes prices of drugs placed in the National List of Essential Medicines under Schedule-I of the DPCO.  So far, around 1000 drugs have been price capped through this modality. The current intervention is being undertaken as Pilot for ‘Proof of Concept’ for Trade Margin Rationalisation.

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