Indian govt plans to rationalize drug trade margins on 130 drugs, including patented ones

Several multinational pharmaceutical companies and some domestic firms, as well as the trade group the Organization of Pharmaceutical Producers of India (OPPI), have expressed their opposition to the Indian government's plan to rationalize trade margins on novel or patentable medications which many drug firms tend to offer free to patients.

Around 130 products, including patented drugs, have been identified by the Indian government for trade margin rationalization (TMR) implementation.

Multinationals like Roche (ROG: SIX), GSK (LSE: GSK), Novartis (NOVN: VX) and AstraZeneca (LSE: AZN) are among several leading global pharma companies that run a patient assistance program (PAP) in India, providing free access to patented medications that would otherwise be expensive.

Proposal would raise drug prices

Drug majors contend that the Indian government's proposal to impose TMR on PAP products would negatively affect reference pricing and raise prices for patients.

As an official put it, drug majors are not concerned about TMR per se, but the inclusion of PAP products under TMR. Since a number of these products are either free or available at reduced prices to patients, inclusion of TMR on them will negatively impact them instead of benefiting patients, with many having to shell out more for the medicines.

Moreover, since these products are also shipped to other countries by multinationals, affixing TMR on products that are not for sale could create a lot of confusion and the global pipeline could also get affected.

"The cost of treatments and procedures is a barrier for many patients and health outcomes can be improved through the provision of PAP," said an official from a multinational company.

The government looking to impose TMR on PAP products could, however, defeat the entire exercise, said the official.

Currently, the National Pharmaceutical Pricing Authority (NPPA) fixes the price of scheduled drugs. OPPI members and other domestic firms are to meet with the health minister and Department of Pharmaceuticals officials and the NPPA to voice their concerns.