Price controls ahead for patented drugs

The government is planning to rein in prices of expensive patented drugs to make medicines affordable to the poor.

“A committee has already finalised a proposal and we will put it out in the public domain in a month or so,” Dilsher Singh Kalha, secretary of the Department of Pharmaceuticals at the Ministry of Chemicals and Fertilisers, told reporters on the sidelines of an industry conference.

“There could be reference pricing system (for patented drugs) or maybe fixed-pricing, but a final decision has not been taken,” said Kalha.

The move is almost certain to draw the ire of global drugmakers like Pfizer, GlaxoSmithKline and Merck, which spend billions of dollars researching new treatments and are hoping for huge growth for branded medicines in emerging economies such as India.

The step would be the latest by India to make medicines more affordable after it announced earlier this month it would implement a Rs30,000 crore plan to provide free generic medicines to its people.

Currently, patented drugs are free of price controls, though there are restrictions on the prices of 348 so-called ‘essential’ drugs.
Patented drugs are mostly imported by multinational drugmakers and used to treat diseases like cancer and heart ailments.

The medicines are beyond the reach of most of India’s 1.2 billion people, 40% of whom live below the poverty line of Rs75 a day.
For example, Nexavar, a cancer drug developed by Germany’s Bayer, costs Rs2.8 lakh per monthly dose.

But last year, Hyderabad-based Natco filed an application with the patent office last year, seeking approval to market a generic version of the kidney and liver cancer drug on account of its high pricing.

In March this year, Natco got a compulsory licence from the patent controller, following which it launched its generic version for Rs8,800 for a month’s course.

Cipla undercut even that price in May. The company, which was already selling generic Nexavar at Rs28,000 for a month’s course, despite a patent infringement case pending against it, cut the price drastically to Rs6,840.

The drug still remains unaffordable for millions. But clearly, the reductions would not have come about had the compulsory licence not been granted to Natco in the first place.

“Compulsory licence in this case has attained its objective of bringing down prices drastically by encouraging generic competition,” Leena Menghaney from international humanitarian organisation Medecins Sans Frontieres had told this paper in May.
Experts stress the scope and need for further cuts.

“Even after a CL is granted to one player, other interested firms can also apply for compulsory licence. The idea is to allow generic competition and not restrict the field to create monopolies,” Amit Sengupta from the People’s Health Movement, a pro-patient lobby, had said in May.

Even internationally, a system of reference pricing for medicines exists across developed markets such as the United States and Europe as well as in various emerging markets. Reuters

(With Bureau inputs)