India: NPPA expands cost controls for cancer drugs, cutting prices by up to 87%

12-03-2019

India: NPPA expands cost controls for cancer drugs, cutting prices by up to 87%

(Source: RAPS 2019-03-13)

India’s National Pharmaceutical Pricing Authority (NPPA) has brought 390 brands of non-scheduled cancer medicines under tougher price controls. The changes impose a 30% trade margin cap on the products, resulting in price cuts of up to 87% on certain products.

NPPA outlined plans to change the price caps on the cancer medicines late last month and brought the new rules into force this week. The action affects 390 brands featuring 42 active ingredients, including the molecules found in Novartis’ Afinitor, Pfizer’s Sutent and Roche’s Avastin. All the drugs now have lower maximum retail prices, although the impact of the NPPA action varies considerably from brand to brand.

The Novartis and Pfizer drugs affected by the action illustrate the range of price cuts enforced by the changes. NPPA is cutting the maximum price of a 10 mg tablet of Afinitor by 63%. In contrast, the price of Pfizer’s Sutent is falling by 3% to 4%, depending on the dose of the product. The differences in the price changes of some other drugs is even greater. While the price of a Tarceva generic is down 87%, Bayer and Zydus’ joint venture can sell Resihance for 0.45% less than before the NPPA action.

Most of the cuts fall into the 25% to 75% range. Less than one-tenth of the cuts are greater than 75%. Around one-quarter of the cuts are less than 25%.

The Indian government thinks the reductions will add up to significant savings. In a statement about the cuts, the government predicted the changes will benefit 2.2 million people and save consumers Rs 800 crores ($115 million) a year.

To achieve those savings, the government will need to stop manufacturers from taking actions that counter its cost-cutting efforts. The government preempted such actions by directing manufacturers affected by the cuts to continue producing the drugs at current volumes.

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