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Table of Contents
MUSINGS
Year : 2021  |  Volume : 4  |  Issue : 2  |  Page : 195-197

Drug pricing: A major barrier to access to cancer care in India


Department of Medical and Pediatric Oncology, Cancer Institute (WIA), Chennai, Tamil Nadu, India

Date of Submission01-Apr-2021
Date of Decision05-Apr-2021
Date of Acceptance06-Apr-2021
Date of Web Publication30-Jun-2021

Correspondence Address:
Venkatraman Radhakrishnan
Department of Medical and Pediatric Oncology, Cancer Institute (WIA), Adyar, Chennai, Tamil Nadu
India
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Source of Support: None, Conflict of Interest: None


DOI: 10.4103/crst.crst_66_21

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How to cite this article:
Radhakrishnan V. Drug pricing: A major barrier to access to cancer care in India. Cancer Res Stat Treat 2021;4:195-7

How to cite this URL:
Radhakrishnan V. Drug pricing: A major barrier to access to cancer care in India. Cancer Res Stat Treat [serial online] 2021 [cited 2021 Aug 5];4:195-7. Available from: https://www.crstonline.com/text.asp?2021/4/2/195/320118



It is estimated that patients bear almost 68% of their health-care expenditure in India, and this is in steep contrast to the world average of 18%.[1] The purchase of medicines accounts for 70% of the out-of-pocket expenditure on health care by individuals/families in India.[2],[3] This acts as a major barrier to health-care access, including cancer treatment, especially for individuals with a lower socioeconomic status.[4] Up to 80% of the health-care services in India are provided by the private sector, which operates on the free-market economic theory, causing huge variations in the prices and quality of services. Medicines, like other commodities, have a maximum retail price (MRP); however, the MRP is fixed by the manufacturer and not the government. It is illegal to sell a drug or a product at a price higher than the MRP. Companies that have a monopoly over a patented drug, especially the newer anticancer medicines, set a very high MRP for their innovator drug. Usually, the availability of generic drugs reduces the MRP. However, it has been observed that pharmaceutical companies form cartels to ensure that the MRP remains inflated. As a result, the cost of many chemotherapeutic drugs, including the monoclonal antibodies, has not come down, even though multiple companies are manufacturing these drugs.

The Government of India issued the drug control pricing order (DPCO) to set a ceiling price for essential and life-saving drugs, thereby making them accessible to the general public at reasonable prices.[5] The drugs whose prices are regulated by DPCO are called scheduled drugs or formulations. Since 2013, the prices of all medicines, including anticancer drugs, on the National List of Essential Medicines (NLEM) of India are regulated by DPCO. However, medicines under DPCO need not be included in the NLEM. The National Pharmaceutical Pricing Policy is the policy governing the price control, and the DPCO is the order by which this price control is enforced.[5] Drug prices are monitored and controlled by the National Pharmaceutical Pricing Authority. After the enforcement of DPCO in 2013, the drug prices for 127 drugs have reduced by 40%, and 509 medicines became more affordable.[5]

However, the problem with the DPCO is that the ceiling price is worked out based on the average price of all brands that have at least 1% of the market share of the total market turnover of the drug.[6] Therefore, if companies form cartels to keep the MRP high, the DPCO ceiling price will also remain high. A cost-based pricing system would help in reducing the prices of medicines further, as it is based on the cost of manufacturing the medicine and a reasonable profit margin. Such a system has been implemented for cardiac stents and knee implants and has reduced their prices by 65%–80%.[6] In February 2019, the Government of India brought 42 nonscheduled cancer drugs under the price capping of 30% of the current MRP; this was in addition to the 57 anticancer drugs whose prices were already being regulated by the DPCO.[7]

A big setback for reducing the prices of anticancer drugs was faced in January 2019, when the DPCO was amended, leading to an exemption of drugs under patent and orphan drugs from price regulation for a period of 5 years.[8] Although this order is beneficial to the pharmaceutical companies, it makes most of the innovator anticancer drugs inaccessible to the patients in India. The government's rationale for this amendment was that international companies were reluctant to bring new drugs to India because of the fear of price ceiling, as was evident from the fact that only 7 out of 50 global anticancer drugs were marketed in India in the past 5 years. Generic drug companies have started using this amendment as a loophole by making minor changes in the manufacturing process or formulations of their existing drugs to escape price control.[9] The counterargument is that India is the third-largest manufacturer of drugs in the world, and the cost of drugs in India is among the cheapest in the world. The DPCO makes it unviable for manufacturers to produce certain low-cost but essential drugs such as vincristine, 6-mercaptopurine, and aspirin. Therefore, there could be a shortage of drugs for treating common cancers, and ultimately, the patients would suffer.[10] India needs to follow the lead of many established health-care markets in striking an optimum balance between public need and a business sense.[11]

It is difficult or perhaps even impossible to have a national procurement or reimbursement system in a country like India with a population of 1.3 billion. This is complicated by the fact that in India, as per the constitution, health is a state subject with very little involvement of the central government. India has 29 states, and each of these states has established its health-care policy based on the local needs. As mentioned above, the public health-care system accounts for only about 20% of the patient care in India. The focus of the public health-care system is primary health care with few secondary or regional centers of excellence. There are only one or two regional cancer care centers in a state serving millions of people. In the public health-care system, medicines are procured by tenders, which usually go to the lowest bidder. Therefore, the quality is mostly substandard. Very few states have laboratories to test the quality of the medicines that are procured. There are periods when medicines might not be available due to the administrative red tape necessary to procure drugs. There is also alleged corruption in the procurement of drugs. Most newer expensive anticancer drugs are not procured through the public health-care system in India.

The introduction of the Universal Health Care scheme called the Ayushman Bharat in 2018 by the Government of India has been an important step to address the health disparity prevalent in the country.[12] This program covers 40% of India's population and provides health-care cover up to $6700 (₹500,000) per family every year. The scheme can be availed throughout India in public health-care facilities and empaneled private hospitals. This scheme integrates with the existing state government schemes and has been a big boon for patients with cancer, as many generic drugs such as trastuzumab, dasatinib, and imatinib have become accessible through this scheme. The Ayushman Bharat fixes package rates for various cancer treatments, thereby indirectly reducing the prices of many anticancer drugs.

The National Cancer Grid (NCG) is an initiative of the Government of India to link cancer centers across the country, including the public and private hospitals.[13] The NCG includes 224 cancer hospitals. Recently, it has set up a drug purchase committee for the bulk purchase of drugs for all the NCG cancer centers in India through a rigorous selection and quality control process. It is expected that the NCG will have a significant leverage on the pharmaceutical companies to reduce the prices due to the high purchase volumes. This will be similar to the purchase of anticancer drugs by the National Health Service in the United Kingdom at a lower market price.

The Government of India has also started the Jan Aushadhi Scheme to provide quality generic medicines at affordable prices through government-run pharmacies.[14] Patients can purchase anticancer medicines at cheaper prices from these pharmacies compared to the retail outlets and are assured of good quality.

There are other resources for reimbursing patients with cancer and these include support from charitable hospitals and organizations, the Prime Minister's relief fund, and privately paid insurance. However, these account for a small proportion of anticancer medicines purchased in India.

A pan-India drug procurement agency for public health hospitals and pharmacies with robust quality control and surveillance will be the best possible measure to make drugs more affordable to the population. Investing in drug research will also reduce the dependence on western countries for the import of novel drugs.

Financial support and sponsorship

Nil.

Conflicts of interest

There are no conflicts of interest.



 
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Government Brings 42 Non-Scheduled Cancer Drugs Under Price Control. Available from: https://health.economictimes.indiatimes.com/news/pharma/government-brings-42-non-scheduled-cancer-drugs-under-price-control/68192825. [Last accessed on 2021 Apr 01].  Back to cited text no. 7
    
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Jan Aushadhi Scheme, Government of India. Available from: http:/janaushadhi.gov.in/index.aspx. [Last accessed on 2021 Apr 01].  Back to cited text no. 14
    




 

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