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How Effective Are Government Measures to Control Prices of Anticancer Medicines in India?
The government imposed a ceiling of 30% trade margins on selected anticancer medicines to make these more affordable. While putting a cap on what manufacturers charge, which has been under price control under the Drug (Price Control) Order, 2013 and also earlier, the government has kept traders’ margins untouched. Prices of the same products sold by different manufacturers vary widely and the overall consumer gain has not been significant. The government has not adequately used the policy options available or tried to control the prices of patented medicines. Compulsory licensing has also practically remained unexplored. The high prices of biologic products are highlighted and the importance of simplification of the regulatory barriers to make the market more competitive and price-sensitive is emphasised.
A preliminary draft of this paper was presented at the “National Consultation on Access to Medicines, Pricing and Transparency” organised by the Third World Network and MSF Access Campaign, 13–14 September 2019, New Delhi. It was also presented at a seminar at the Centre for Development Studies on 3 September 2019. The paper is a shorter and revised version of a working paper of CDS. The author thanks the participants for discussions.
Comments and suggestions from the anonymous reviewer are gratefully acknowledged.
The Government of India issued an “order” on 27 February 2019 to control the prices of 42 anticancer medicines by putting a cap of 30% on trade margins.1 As the order itself has documented and acknowledged, cancer is one of the leading causes of illness and death in India. Due to inadequate public health facilities and poor health financing mechanisms, cancer patients are forced to bear the treatment expenses themselves and “to resort to distressed means for treatment financing.” The order refers to some studies on India which “suggest that about 60% and 32% of households resort to borrowings and contributions (from friends and relatives) respectively for cancer hospitalisation.” The retail price that the patients pay is the sum total of the price that the manufacturers charge and the margins which traders get. For the 42 anticancer medicines, while the latter is being regulated, the former has been left untouched. But the manufacturers’ prices, including of anticancer medicines, have been under control since the Drug (Price Control) Order, 1970 (DPCO) was introduced. DPCOs have been revised several times in 1979, 1987, 1995 and 2013.2 In light of the policy to regulate trade margins, the objective of this paper is to evaluate how effective government measures have been to control the prices of anticancer medicines.
Price Structure of Anticancer Medicines
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