Seven years after the government first stepped in to curb excessive trade margins on cancer medicines, it is attempting another intervention. The latest move follows a push by the Supreme Court for the government to examine ways to rein in the cost of cancer treatment, including the margins charged across the drug supply chain.
But the numbers behind the latest exercise raise an uncomfortable question: why have margins climbed so sharply despite the 2019 intervention, and will another round of price cuts offer patients lasting relief?
On October 17, the National Pharmaceutical Pricing Authority (NPPA) notified a second round of trade margin rationalisation (TMR), covering 137 non-scheduled anti-cancer drugs.
The revised prices, which take effect on November 9, cover 643 brand-strength-pack entries, including 34 drugs that were part of the 2019 exercise.
An analysis of the revised list by the Third World Network (TWN), which works on access to affordable medicines in developing countries, shows that nearly three-fourths of the listed entries will see price reductions.
The average cut across the list is about 38%, while 124 entries will become more than 70% cheaper.
The steepest reduction is for Samtepa, a 100 mg thiotepa injection, whose price falls from Rs 80,072 to about Rs 7,150 per vial.
The scale of these reductions, however, also exposes how much room there was for prices and margins to rise after the previous intervention.
India’s growing cancer burden makes the issue particularly urgent. The country recorded around 1.5 million new cancer cases in 2022. An Indian Council of Medical Research (ICMR) study published in The Lancet Regional Health – Southeast Asia projects that annual cases could approach 2.7 million by 2050. Cancer deaths are also projected to rise substantially, from around 990,000 to 1.83 million.
With treatment often involving prolonged chemotherapy, targeted therapies and expensive immunotherapy, the price of medicines can determine whether patients can continue treatment or are forced to interrupt it.
THE 2019 PROMISE In 2019, the government introduced TMR as a pilot covering 42 anti-cancer drugs. The NPPA limited trade margins to 30%, effectively allowing a maximum markup of 42.8% over the price to the stockist. The exercise brought down the maximum retail prices of 526 brands, with some reductions reaching 90%.
The intervention was intended to address the large difference between the price at which medicines entered the distribution chain and what patients eventually paid.
But an assessment by the All India Drug Action Network (AIDAN), a patient advocacy group, suggests that the intervention did not create a lasting check on margins.
Comparing 50 cancer drugs covered in both rounds, AIDAN found that the prices of 38 had risen after the 2019 exercise. Some of the increases were substantial. Pegex, a pegfilgrastim brand, became 81% more expensive, while prices of brands containing epirubicin, everolimus and mitomycin also climbed sharply.
More tellingly, before the latest intervention, 45 of these 50 medicines had markups exceeding the 42.8% threshold used in 2019. In 41 cases, the markup was above 100%, while 38 had markups ranging from over 100% to as high as 700%.
Cizumab, a 400 mg bevacizumab injection, was estimated to carry a markup of about 709%. Its price has now been reduced by more than 82%, from Rs 57,816 to Rs 10,211.
For AIDAN, these figures point to a fundamental weakness in the government’s approach.
The network argues that describing the exercise as a price cap
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