Who cares about high drug prices?

In September 2018, India’s leading expert on the impact of product patents on the pharma industry, Sudip Chaudhuri, published a fresh working paper revealing the high degree of monopolisation that is taking place in the drugs market in several therapeutic groups, including those for critical diseases such as cancer.

Although Chaudhuri noted that overall monopoly shares were low, manufacturers have started charging high prices at levels unheard of earlier. This was particularly disquieting in the case of drugs for treating cancer, currently the second most common cause of death in India. The proportion of monopoly molecules has shot up from 6.4 per cent during 2000-04 to 18.8 per cent during 2010-12 and 59.5 per cent during 2013-15.

Yet, almost perversely, the central government had issued a gazette notification within a few months to ensure there would be no price caps on patented drugs and orphan drugs for five years.

The unwarranted amendment to the Drug Price Control Order (DPCO), 2013 was made by the Department of Pharmaceuticals (DOP) even while a case on DPCO was pending in the court. And it was made without consulting either the industry or the civil society.

What has become clear to anyone following the BJP regime’s approach to pharma patents, and to questions of intellectual property rights (IPRs) in general since it first came to power in 2014, is a marked reluctance by the Narendra Modi government to take on the US Trade Representative or the many business lobbies that as a matter of course claim India does not protect IPRs.

At the same time, it has gone out of its way to facilitate patent monopolies on medicines by such measures as the DOP’s January suo moto gazette notification.

As if to counter the backlash, in March the government decided to cap the trade margins on 42 cancer drugs without consulting patient groups or the medical fraternity.

The decision was taken by a panel on affordable medicines of NITI Aayog, a body which has not shown itself to be conversant with the complexities of the pharma industry or public health priorities. Why trade margins were chosen to control the prices of life-saving drugs, and why the particular drugs were selected, was not made clear as criticism poured in against the faulty formula adopted by NITI Aayog.

The All India Drug Action Network, a national entity of several non-profits, said it was concerned that most anti-cancer medicines were unaffordable to most Indians because no attempt had been made to curb profiteering by drug manufacturers because of patent monopolies. It pointed out that even now there are wide variations in the prices of different brands of the same medicine.

Besides, “a massive escape hatch had been created by amendments to DPCO whereby any of the anti-cancer drugs can apply for an exemption from the DPCO on the basis of patents, even frivolous ones”.

NITI Aayog’s approach was revealed in the insouciant statement of its member, Vinod K Paul, who said “prices of patented drugs cannot be curbed and should not be curbed". So what if a 50 ml bottle of Cetuximab used to treat various cancers costs Rs 94,544? We have been given the official prescription on access to medicines.

(This article was first published in Down To Earth's print edition dated June 16-30, 2019)

Health India