Government's Strict Decision to Reduce Maximum Retail Prices of Non-Scheduled Cancer Drugs

According to a News18 report, medicines for cancer patients across the country have been made more affordable as the revised prices of non-scheduled anti-cancer drugs have come into effect from today. This price reduction follows the decision taken by the National Pharmaceutical Pricing Authority (NPPA) on October 17, in which trade margins on 137 non-scheduled cancer drugs have been capped at 30 percent of the Maximum Retail Price (MRP).

Trade margin is the difference between the price at which a pharmaceutical company sells the drug to a distributor and the maximum retail price paid by the patient. The NPPA has stated that this cap is expected to lead to a reduction of up to 70 percent in maximum retail prices. Manoj Joshi, Secretary of the Department of Pharmaceuticals (DoP), said in an exclusive interview with CNN-News18 that the government had analyzed the market to see what interventions could be made, keeping in mind the high prices of cancer drugs.

He added that data showed that very high margins were being charged, mainly because hospitals or pharmacies were buying drugs from companies that were offering higher margins. Usually, when many companies sell the same drug, competition brings prices down, but in the case of cancer drugs, it has driven prices up. Manoj Joshi further stated that an unusual type of incentive was working in this sector where higher competition led to higher margins and higher prices.

In cases where there are only one or two suppliers, margins are much lower, and the government felt this was a malpractice that needed to be addressed. The objective of trade margin rationalization is to control volatile margins without interfering with the prices of companies manufacturing cancer drugs. The list of 137 drugs was prepared by an expert committee of the Director General of Health Services (DGHS) of the Ministry of Health.

This committee included many oncologists who collected all possible drugs, and by now, all cancer drugs have been covered. Approximately 10 to 15 drugs identified by the panel have not yet been launched in India. However, not every cancer drug will be available at a lower price from today because this cap only brings down the MRP where the trade margin was previously above 30 percent.

Anil Matai, Director General of the Organisation of Pharmaceutical Producers of India (OPPI), which represents research-based or foreign pharmaceutical companies, stated in the report that no change in price does not mean that a company is violating the rules. He clarified that this formula reduces the MRP only where the current margin is above 30 percent and maintains the same MRP where the margin is already within the limit.

Anil Matai said that this is the case for innovative oncology drugs provided by OPPI member companies, whose trade margins are not more than 30 percent and therefore their MRP has not changed. Old stock will retain its previous prices, while new batches will reflect this reduction.