NICE, Nexavar, and why it matters

25 Nov

There has been some strong media and patient outrage in the UK over a decision to not make available Bayer’s Nexavar, a drug for terminally-ill liver cancer patients, through the National Health Service.  UK’s National Institute for Health and Clinical Excellence – referred to as the NHS’ drug rationing body by the UK media – says the drug’s price does not justify the benefits that it provides.  Nexavar costs 36,000 pounds a year (Rs 27 lakh). It extends survival by an average of about 3 months, and is the first to do so for liver cancer.

NHS could end up paying as much 9 million pounds on treating 600-700 patients a year who qualify.  Bayer has offered to give every fourth packet of the drug free but that would reduce the cost to 7.7mn pounds which is still pricey the NHS feels.

Bayer plans to appeal the decision.

The decision has health activists and patients up in arms. (See here and here). NICE has been roundly-roasted for putting a value on human life, so to speak. Note that neither of the articles that’s linked to above has a single talking head asking Bayer to bring down the price of the product.

Now consider what happens in India.  First of all, none  except those whom the government employs expect it to pay for drugs – whether for common cold or cancer.  80 per cent of our healthcare spend is out-of-pocket, among the highest rates in the world.

However, companies receive plenty of flak from the media for price increases (not that it stops many of them).

Indeed,  over the decades the government has conveniently shifted the onus of providing affordable drugs onto the drug industry.  How has it done this?  One, in the early seventies it liberalised the patents regime so that generics of globally under-patent drugs could be freely launched in India.  Two, it did little to raise the bar on quality. Indeed, once a drug was on the market for five years a new manufacturer did not even have to approach the central regulator for a quality approval – it simply got a manufacturing licence from the state.

As a result,  India has multitudinous copycats of a good number of drugs giving it the distinction of having among the lowest drug prices in the world. But quality is still a problem especially outside the metros. In fact, it is this inability of the government to guarantee quality that has allowed companies to charge an artificial premium for ‘brands’ – even though in a patents-free market there were hundreds of copycats of each drug. Brands are after all associated with quality.

So a strange duality exists in the country. Yes, it has some of the lowest drug prices in the world but to be sure of what they are getting, especially in life-and-death situations, consumers – rich or poor – still pay a fat premium.  Besides, when the markets are not large enough – such as for rare diseases – generics will not be found.

In recent months, a small attempt is being made in government to make amends.  The ministry of chemicals and fertilizers’ Jan Aushadhi pharmacy outlets provide unbranded medicines at far lower prices by using bulk sourcing.  Last heard, this was making slow progress for want of real estate and suppliers. The government also wants to pay for cancer drugs (currently a few hospitals like Tata Memorial funded by the Department of Atomic Energy subsidise medicines) but hasn’t yet begun.

As an aside, Nexavar – which is patented in this counry to Bayer under India’s tightened patent rules of 2005 –  is currently the subject of a lawsuit here.  Bayer has sued the Indian drugs regulator to prevent it from approving a Cipla generic which will probably be cheaper. And surprisingly, senior government counsel seems to be missing in action from the court proceedings.

True, it’s not all hunky-dory in the west as the Nexavar debate shows. Governments and insurers flush with funds to pay for healthcare have pushed prices to record highs to the point where countries are now feeling the pinch.  But India can learn from those mistakes and start forgeing its own system tailored to meet its needs.

And not sometime in the future. Today, right now, this minute.

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