The drug price regulator, NPPA, has brought as many as 42 anti-cancer drugs under price control by restricting trade margins on these medicines to a maximum of 30 per cent.

The prices will be controlled by restricting trade margin on the selling price or Maximum Retail Price (MRP), according to a notification issued by the National Pharmaceutical Pricing Authority (NPPA).

Manufacturers will now be required to disclose to NPPA by March 6 their Price to Stockists (PTS), which is the price at which they supply to retailers, hospitals or dealers and also the Maximum Retail Price (MRP) printed on drug packs. The NPPA notification says that the manufacturers have been given seven days to recalculate the prices and inform the NPPA, State Drug Controllers, stockists and retailers. The revised prices will come into effect from March 8.

PTS regulation

While NPPA has notified that the retailer or hospitals cannot charge the patient more than 30 per cent margin on the price at which they buy the medicines from manufacturer which is PTS, the Central government has not talked about regulating the PTS.

Instead, according to the notification, the expert committee has recommended that intra trade margins could be decided by the industry subject to a cap to be notified by the government from time to time. It has not mentioned how much the cap will be though. So, in case PTS is already high, those drugs will continue to remain expensive.

Price control scheme

However, NPPA says that according to data available with it, the MRP for 105 brands will be reduced up to 25 per cent in case of 45 brands; 25-50 per cent for 43; 50-70 per cent in the case of 12, and 70-85 per cent for five brands.

“More data is being collected from hospitals and manufacturers to finalise the list,” a statement issued by Department of Pharmaceuticals says.

So far, 57 anti-cancer drugs are already under price control as scheduled formulations.

NPPA invoked Para 19 of the Drugs (Prices Control) Order, 2013 to bring these drugs under price control, through Trade Margin Rationalisation the notification stated.

Critics argue that capping 42 anti-cancer medicine prices is not enough and that the government should do more in the case of multi-national pharmaceutical corporations which hold monopoly over certain key drugs to price them reasonably in India. It is yet unclear how or if this notification will apply to MNC manufacturers, in case, a drug is being imported.

“The mechanism being suggested to bring down their prices is faulty and inadequate. This is because the prices of some of these medicines which are being imported are so high that trade margin capping would have negligible impact on making them more affordable,” said a statement issued by All India Drug Action Network (AIDAN).

One of the drugs, Crizotinib which is in the list of 42 anti-cancer medicines is used to treat a rare form of advanced lung cancer.

AIDAN noted, “There is a monopoly situation for Crizotinib and it is extremely expensive currently. The drug’s month’s supply costs ₹1,06,690 as per MRP and ₹85,000 after discounts offered by chemists at the moment.”

AIDAN further stated that any of these drugs can slip outside price control including trade margin capping if they were to qualify under exemptions of para 32 in amended Drug Price Control Order (DPCO).

Also, in the NPPA notification, instructions have been issued that any company selling at a lower price than the capped prices shall not increase prices based on formula given by NPPA to regulate prices. It said that the revised price list will have to be displayed in a conspicuous manner by retailers, dealers, hospitals and institutions. Prices will be fixed for one year after notification and no manufacturer will reduce production without six-month prior permission to NPPA.

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