The holiday season approaches, so here’s a quick look at the year that was for Indian Pharma, before we disappear into a haze of year-end festivities. It’s a mixed bag (what year isn’t?) including stuff that could influence the way things work in the years ahead. For convenience, I’ve divided up what I think are key developments into posts rather than stick to any specific chronology of events. The first post was on the regulation of Indian manufacturing and the second on clinical trials and pharmacovigilance. This one is about drug pricing. Continue reading
Just when I thought things were getting a bit dull, they go and do this.
The latest round of price interventions imposed on the drug industry by India’s National Pharmaceutical Pricing Authority (NPPA) has the industry fulminating. Just when it was recovering from being all but snubbed in the Union Budget, it finds that the NPPA has quietly pulled the rug from under its feet leaving it sprawled on the floor.
After the initial shock, industry captains have probably dusted themselves off and regrouped to figure out if they can sue the NPPA to oblivion. In their position, I would. Continue reading
My latest column in The Indian Express addresses the question of drug affordability. In this column, I have argued that the new Drug Price Control Order (DPCO), soon to complete a year in existence, while a major preoccupation with mandarins and managers alike in the last few months, is not a panacea for affordability. I have used the Campaign for Affordable Trastuzumab to illustrate my point. For the article click here.
In continuation of the challenges arising from the roll-out of India’s new drug pricing policy, a question has now been raised on the current National List of Essential Medicines (NLEM) that specifies the universe of drugs under price control.
“Some may argue that the NLEM is not appropriately designed,” said Dilsher Singh Kalha, Secretary, Department of Pharmaceuticals (DoP) which administers the policy, addressing CEOs and senior executives at the annual general meeting of industry body OPPI three weeks ago. Continue reading
On December 7, India’s National Pharmaceutical Pricing Policy 2012 was finally tabled in Parliament. Assuming that this policy does get rolled out irrespective of a Supreme Court hearing on drug pricing playing out in parallel, the cornerstone of the policy i.e.data may create some vexing issues. Continue reading
The issue of controlling foreign direct investment (FDI) in the Indian pharmaceutical sector continues to make headlines with various arms of the government putting forth their own formulas to tame the grasping foreign hand.
The Indian Express reports that the ministry of commerce under Anand Sharma would like all FDI proposals – including where foreign ownership is limited to 49 per cent – to be routed through the Foreign Investment Promotion Board (FIPB). This is at odds with Continue reading
I’d like to introduce a guest column by Salil Kallianpur, a healthcare marketing professional with experience in the pharmaceutical and medical devices industries. Salil is an avid reader and follower of healthcare current affairs, its politics, and strategies. He comments on the intersection of healthcare and life on his blog My Pharma Reviews. He is based in Mumbai. The views in this article are his own and not those of his employer, a pharmaceutical organisation.
The price of medicines has always been a matter of animated, even acrimonious, debate. Most of the time, activists assume that the only way to solve social challenges is through government and charity and that the only purpose of business and investing is to make money. Responsible sections of the pharmaceutical industry reject that worldview. Consider this.
Swiss drug maker Roche reduced the price of its blood cancer drug Mabthera by 50% in South Africa. Sanofi slashed prices on its diabetes drug Lantus and its cancer treatment Taxotere in the Asia-Pacific region. Eisai cut prices of its Alzheimer’s drug Aricept in 6 Asian countries and GSK cut prices on “essential” drugs by 40% to 50% in Kenya.
These recent Big Pharma attempts at tiered pricing in the developing world signal a deviation from the age-old strategy of recovering research costs through high prices.
What’s changed? Continue reading
Bloomberg reports that Germany will soon levy over $2bn worth of price cuts on drug makers launching new products. Germany is the world’s third biggest pharma market after the US and Japan, it points out. “The law, backed by the lower house today, gives companies a one-year window to negotiate prices with insurers after introducing new drugs…If no agreement is reached, the Health Ministry would set a maximum price, and the drugs would undergo a cost-benefit analysis by a semi-state agency,” it says. You can read the story here.
Germany’s move is just the latest attempt by governments in Europe to control spiralling drug costs. UK is attempting a new ‘value-based pricing’ system “in which fees are negotiated with companies on the basis of a scientific assessment of the drug’s clinical value”, reports Nature. Italy recently cut prices of generic drugs.
In India, price control has been a fact of life for the pharma industry. Over time the number of drugs under control has been pared. As a result only 74 drugs are under control and the rest are free. However, the government has the right to intervene and fix prices of ‘out-of-control’ products if they escalate beyond a point (more than 10 per cent a year).
The drug industry has from time to time proposed a move towards price monitoring rather than controls but that has not gained traction yet. It also believes that the ‘cost-plus ‘ mechanism that is used to control prices (where government fixes a margin over the costs incurred to produce a drug) is flawed.
However, over time the industry has learned to live with the system, even beat it. Some companies have circumvented drug price rules within the limits of the law and sometimes outside it spawing a spate of lawsuits between the government and companies that have dragged on for years. In the meantime, the government’s price control system has worked inconsistently – medicines for cancer and rare diseases are still prohibitively expensive. And since most are imported, it is difficult to ascertain their production costs and fix prices. In recent months, there has been talk of the government regulating prices of cancer drugs.
Germany’s move to control drug prices weakens the industry’s case against controls further. It is also a move that should be watched carefully by the Indian government which is now trying to figure out how to negotiate the prices of patented products that will have no generic competition; a 2005 law allows patents on drug products instead of just the process of making them. As European countries experiment with different methods, there’s lots for India to learn and choose from.