Trade margins on 137 cancer drugs capped, but will bills get lower?

NEW DELHI: Govt’s move to cap trade margins at 30% of MRP on 137 cancer drugs, covering over 1,000 medicine brands, puts the focus on actual patient savings, with effective implementation and monitoring needed to ensure it translates into lower medical bills.The cap could narrow the gap between prices at which medicines are supplied to hospitals and their MRPs, but it may have a limited impact on overall cost of healthcare as hospitals may seek to offset lower margins by raising charges on consumables, diagnostics or procedures, public health and industry experts told TOI. A similar trend was seen after cardiac stent prices were capped in 2017, when several private hospital chains raised angioplasty package rates, they said.

Wider rationalisation of margins across products needed: ExpertsExperts said wider rationalisation of margins across medical products, alongside closer scrutiny of hospital charges, may be needed to substantially reduce medical bills. Hospital stocks were down on BSE on Monday, following the govt notification on Oct 17.The MRP of certain cancer drugs are up to Rs 5 lakh per vial or pack, including a combination of pertuzumab and trastuzumab, atezolizumab, teclistamab, inotuzumab ozogamicin and daratumumab.

“The success of this measure will, however, depend equally on timely implementation across manufacturers, distributors and hospitals. A trade margin of 30% should not be misconstrued as a 30% profit margin for hospitals. The defined trade margin applies across the distribution chain, and the basis of calculation and applicability of the prescribed margin at different stages of the supply chain, should be clearly communicated to avoid any misunderstanding,” Girdhar Gyani, director general at the Association of Healthcare Providers, which represents over 20,000 hospitals and healthcare providers, told TOI.Oncology is a significant revenue stream for hospitals, with expensive cancer drugs and cost of care contributing to high treatment costs. The margin cap could put pressure on hospital earnings, raising concerns over whether lower margins could affect the viability of such services. “Affordability must be viewed across the entire cancer-care pathway, from screening and diagnosis to treatment,” said Mayur Sirdesai, co-founding partner at Somerset Indus Capital.“The impact of TMR on affordability and patient access will need to be evaluated, said Sudarshan Jain, secretary-general of Indian Pharmaceutical Alliance.Public health experts said the margin rationalisation may not be enough to reduce costs for patients. “Prices of these medicines will still remain out of the reach for many patients. Also, hospitals may find ways to hike charges of other items and packages,” said KM Gopakumar of Third World Network, a civil society group.