Less than a month after the Department of Pharmaceutical came out with a controversial decision to keep patented medicines out of price control for five years, a new report from the World Health Organisation has exposed the flaws in the decision.
The technical report on the pricing of cancer medicines and its impact makes it clear that pricing regulations are necessary for medicines remaining affordable because drug prices fixed by pharmaceutical companies are “excessive, unjustified and rising continuously with no correlation to R&D investments.”
Discussed at the WHO executive board meeting on January 26, the report is an exhaustive analysis of income generated from the sale of 99 cancer drugs approved by the US Food and Drug Administration between 1989 and 2017.
“The analysis suggests that the costs of R&D and production may bear little or no relationship to how pharmaceutical companies set prices of cancer medicines. Pharmaceutical companies set prices according to their commercial goals, with a focus on extracting the maximum amount that a buyer is willing to pay for medicine. This pricing approach often makes cancer medicines unaffordable, preventing the full benefit of the medicines from being realized,” says the report.
The analysis comes within three weeks of a contentious order from the Department of Pharmaceutical under the Union Ministry of Chemicals and Fertilizers to keep a whole bunch of patented drugs as well as medicines for rare diseases outside the purview of price control.
“The Drugs (Prices Control) Amendment Order, 2019, by the Ministry of Chemicals and Fertilisers exempts a manufacturer producing a new drug patented under the Indian Patent Act, 1970 for a period of five years from the date of commencement of its commercial marketing by the manufacturer in the country,” says the January 3 notification.
The provisions of DPCO shall not also apply to “drugs for treating orphan (rare) diseases,” it says. The DPCO fixes the prices of scheduled formulations and monitors maximum retail prices of all drugs, including the non-scheduled formulations.
“Exclusion of patented medicines is an unconstitutional and arbitrary decision that was taken without any public consultation that happens normally in the government,” Leena Menghaney, South Asia Head for MSF (Doctors Without Border) Access Campaign told DH.
One example of high treatment cost in India was flagged in the WHO report, which shows the standard treatment for breast cancer costs 10 years of average annual wage in India as the treatment cost is $18,500 or more than Rs 1,300,000.
The DPCO amendment might lead to some of the new cancer medicines becoming unaffordable for most of the Indian patients, sources said.