India Just Slashed Prices for Nearly 400 Cancer Drugs

India has introduced strong caps on cancer drug prices, in many cases slashing the drugs’ cost by as much as 87 percent.

On March 8, India’s National Pharmaceutical Pricing Authority (NPPA) released a list of 390 medicines used in cancer treatment which the government is now bringing under a trade cap margin of 30 percent. This creates an equivalent price reduction of up to 87 percent for patients and brings 42 new unscheduled drugs under the government’s regulatory framework.

It’s important to note that many of the drugs do not hit the upper price reduction, with many falling in the 50 to 75 percent range. About a quarter see price reductions under 25 percent. Still, India’s government predicts that these price reductions will add up to meaningful savings for some 2.2 million patients and save the country an equivalent of $115 million per year. So far, about 1,000 drugs (not just cancer drugs) have had their prices capped in this way.

“Due to prevalent inequalities, out-of-pocket expenditure on is the single largest contributor to pushing families beyond the poverty threshold in the country,” the announcement said. The government said this self-regulatory system that does not dictate prices but rather prevents them from being set exorbitantly high will prevent “naked fleecing”.

The move has not been without its critics who say that the price slashing doesn’t go far or deep enough. They point out that few patented cancer drugs have made the list and where they have their prices have fallen only marginally. Speaking more broadly, critics charge that the government’s narrow definition of “essential” cancer fighting drugs doesn’t take into account innovative treatments for some of the most advanced cancers. Leaving those out of the price cap, they say, puts such treatments out of reach for many patients who cannot afford the out-of-pocket expense even when the bulk of the cost is covered through various schemes.

However, the Indian government has been keen to stress that this latest step is one of many. “The trade margin rationalization for 42 anti-cancer drugs was rolled out as proof of concept, stressing on the new paradigm of self-regulation by the industry,” it said in a release about the move. “The manufacturers of these 42 drugs have been directed not to reduce production volumes of brands under regulation.”

Yet critics point out that the government has shown indifference and outright defiance on curbing prices for newly-patented cancer drugs, and the government is not alone in this. Dr. Vinod K. Paul, member of the National Institute of Transforming India, tells ThePrint that such drug prices “cannot be curbed and should not be curbed”, because they represent a scientific breakthrough. Paul seems argue that medical innovation is expensive and that drug prices are a way of recouping that investment and putting that money back into further innovations. Cap that and, the argument goes, we stem the flow of innovation.

This speaks to the difficult position that markets create around drug pricing. On the one hand it seems self-evident that drug prices must be affordable. By the same token though, drug development is an involved and lengthy process.

It’s easy to see that price gouging on older, generic drugs is blatantly wrong because it often targets people with complex needs and overlapping health conditions for profit, not innovation. However, when it comes to frontline treatments for diseases like cancer, the situation becomes grayer. That’s because it is at once necessary that life saving treatments are affordable and yet, in order to research and manufacture better treatments, there has to be capital keeping the wheels turning.

Drug companies have often set prices on the basis of not just the investment but what they believe the drug is worth to the market. That is the disconnect: we’re not talking about markets. We’re talking about real people and what they can afford. We need a balance.

India’s government appears to be looking for a way to appease both needs. Cynics may say this approach is doomed to fail, and there are reasons to think that with way price capping is built into the current system, drug firms operating in India and beyond will continue to set prices for vital medicines however they see fit. Yet balanced price capping may be an answer to the issue of affordability. This takes some of the power away from pharmaceutical companies and gives it back to elected officials. At the very least, it creates a more transparent paper trail to justify why a drug is priced as it is.

Drug companies have long said they are not the bad guys in this scenario and that, ultimately, they care about patients as much as any other in the health care sector. Working with models like the India price capping framework would help demonstrate that, and other governments should look at more aggressive price caps like this to suitably curb the temptation to price gouge.

Photo credit: Getty Images.

60 comments

Chad A
Chad Anderson25 days ago

Thank you.

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Nancy BIELECKIE
Nancy BIELECKIEabout a month ago

I have always been amazed at the price of medication, considering what it is made of, mostly. I have also thought that pharmaceutical companies and corporations have their bottom line way above the worry of humans health and needs. More and more, we are living in an economic environment instead of caring for the living and breathing things of our planet.

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Elaine W
Elaine Wabout a month ago

A very progressive and civilized thing to do.

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Mark T
Mark Turnerabout a month ago

Ty.

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Janis K
Janis Kabout a month ago

Thanks for sharing.

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tammy C
tammy Cabout a month ago

right to live shouldn't be just for the rich

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Leo C
Leo Cabout a month ago

Thank you for sharing!

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Kathleen E
Kathleen Englandabout a month ago

Well done India, pity the UK and others can't follow suit!

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Clare O'Beara
Clare O'Bearaabout a month ago

hope it helps

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Clare O'Beara
Clare O'Bearaabout a month ago

good for all

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