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India plans to cut prices of cancer drugs

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Wednesday, May 20, 2009, 17:23 This news item was posted in Pharma category and has 2 Comments so far.

Most of the cancer drugs are too costly for the common man. So it’s essential to bring them under price control, feels the government.India is considering a plan to bring all cancer drugs under the price control net, as the government feels most of the medicines used to treat cancer are getting too expensive for the common man.

At present, India controls the prices of 74 medicines, which it considers as essential medicines, under check.

All the drug packs containing the listed 74 medicines are under surveillance by the National Pharmaceutical Pricing Authority (NPPA), India’s drug pricing watchdog.

NPPA checks all the formulations based on these essential drugs periodically for price revision and alerts the manufacturers on violations.

The drug regulator annually fixes the maximum retail price of medicines that contain any one of the 74 raw materials that are under the price control of the government, as per the Drugs Price Control Order.

The Drugs Price Control Order (DPCO) 1995 is an order issued by the Government of India under Section 3 of the Essential Commodities Act, 1955 to regulate the prices of drugs.

The Order provides the list of price controlled drugs, procedures for fixation of prices of drugs, method of implementation of prices fixed by government and penalties for contravention of provisions among other things.

NPPA is vested with the powers for implementing provisions of DPCO.

Only 74 out of 500 commonly used bulk drugs are kept under statutory price control. All formulations containing these bulk drugs either in a single or combination form fall under the price control category.

The price is fixed after considering all possible costs in packaging, conversion and material costs, as well as the excise duty, by the NPPA.Costs involving packaging and conversion contribute about one-third of the price that consumers pay for medicines.

NPPA carries out the price-fixing exercise as a step to bring in uniformity of cost among all the formulations containing price-controlled drugs across the country.

However, NPPA used to give a free reign for those drugs, which do not come under price-control, allowing them to increase the price by up to 10% annually.

Recently, Surinder Singh, the Drug Controller General of India (DCGI) has recommended that cancer drugs be brought under the National Pharmaceutical Pricing Authority (NPPA).

“As the DCGI, I have outlined the technical inputs and rationale behind the suggestion for the inclusion of new drugs. Cancer drugs, in particular, should be included, since they are expensive and beyond the means of the common man,” Mr Singh was quoted as saying.

Even though the DCGI has mooted the proposal, a final decision on this will have to be taken by the department of pharmaceuticals.

The proposal to bring the cancer drugs too under price control will affect not only the multinational companies but the domestic companies who are having a cencer drug franchise, as well.

Of late, several MNCs have been identified India as one of the emerging market to sell their top selling drugs.

Roche, GSK, Novartis, Merck, Pfizer, Eli Lilly, Sanofi-Aventis etc have already launched their new generation cancer drugs in India eyeing India’s fast growing oncology (cancer) segment.

Cancer accounts for 3.6% of the total deaths in India, the second-largest non-communicable disease. Oral and lung cancer in males and cervix and breast cancer in women account for over half of all cancer deaths in India.

market for breast cancer drugs alone is expected to double from $35 million in 2007 to $64 million by 2012.

Putting a price cap on their cancer drugs could force MNCs to take oncology drugs to other emerging markets depriving India of these valuable new generation treatments.

However, India, which is used to a generic-driven market for such a long time finds these new drugs as too costly for the commoner. It feels most of the new generation cancer drugs costs hundred to three hundred times the price of the similar therapies available in the Indian market.

Pfizer, for example, which was granted a patent for its kidney cancer drug Sutent (sunitinib) in India in 2007, launched the drug at a price of Rs 1.96 lakh for a 45-day treatment in the country.

Roche’s Tarceva is another case in point. Tarceva (erlotinib) is a novel therapy for patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) after failure of at least one prior chemotherapy regimen. Tarceva costs around Rs 3,30,000 for a 3-month treatment.

Indian drug makers also have several oncology drugs marketed in India. Dabur, Dr Reddy’s, Cipla, Natco are some of the prominent players in the oncology segment.

So, Indian companies, who have been crying foul over the price control regime for years, will also be against any sort of price control for cancer drugs.

It was only recently that the domestic companies were planning to approach the ministry seeking an upward revision of prices fixed by NPPA for the price-controlled drugs, arguing that the price-ceilings imposed several years ago would be totally unrealistic as production cost of the drugs have increased by at least 25% over the years.

The move could hurt the margins of multinational companies, such as Sanofi-Aventis, Pfizer, Roche, GlaxoSmithKline and Eli Lilly, who enjoy a near monopoly in the category, also populated by Indian drug-makers Dr Reddy’s, Natco and Dabur.

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2 Responses to “India plans to cut prices of cancer drugs”

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