MNC drug cos mull differential pricing

MNC drug cos mull differential pricing
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First Published: Fri, Mar 28 2008. 01 07 AM IST
Updated: Fri, Mar 28 2008. 01 07 AM IST
Mumbai: Multinational drug companies in India, criticized for the high prices of their patented drugs, especially for AIDS and cancer, are mulling offering a formal differential pricing system.
This could help them battle generic companies and also try to reach a wider group of consumers with lower rates.
The foreign drug makers plan to offer these medicines at different tiers of prices for government supply, patient access programmes, hospitals in rural areas and non-profit organizations, said an official with the Organisation of Pharmaceutical Producers of India (OPPI), an industry body that chiefly represents foreign drug firms present in India. The discussions are at an early stage and the strategy may vary for individual companies, he said.
The multinational companies have maintained relatively high prices for their patented drugs, almost on a par with international prices. But many of them are realizing that India may not be as big a market as they had hoped and they are also not able to rule out competition from firms making generic versions of their drugs. For instance, the Delhi high court, in a recent interim ruling, has allowed India-based generic drug maker Cipla Ltd to sell a copy version of Roche Scientific India Ltd’s patented cancer drug, Tarceva, in the domestic market. Roche Scientific India is the Indian arm of Swiss drug maker F Hoffman La Roche Ltd.
“There is a clear understanding among the multinational companies now that they have to adopt a differential pricing strategy to sustain in the Indian market, which is highly price-sensitive and predominantly generic-driven,” said Sujay Shetty at consultant PricewaterhouseCoopers India. “This (differential pricing) is also going to be a strategy for the patent holders to avoid chances for compulsory licensing by the government.”
Compulsory licensing permits WTO member countries to allow cheaper versions of patented drugs in case of medical emergencies. With this, the government can allow generic companies to manufacture and market such drugs despite patent protection.
As Mint reported on 7 March, Hyderabad-based Natco Pharma Ltd has filed an application seeking compulsory licence to export Tarceva and Sutent, another cancer drug, to Nepal. While the application is awaiting the patent controller’s decision, Indian generic firms can also opt to sell the drugs in the domestic market after three years if they prove that the medicines are still not accessible to patients here.
Pfizer Ltd, the Indian arm of the world’s largest drug maker by sales Pfizer Inc., has already worked out a three-tier pricing system for Sutent, the first patent-protected product launched in India by the company. The drug, priced at about Rs1.96 lakh for a 45-day treatment, has been offered at three different prices through the company’s patient assistance programme launched in association with a non-profit organization.
Cipla offers its generic version of Roche’s cancer drug in the Indian market at one-third the original price tag of Rs4,700 a tablet.
Another high-value drug that is facing competition from generic versions in India is Glivec, a blood cancer drug launched by Novartis India Ltd, the Indian subsidiary of Swiss drug company Novartis AG. The drug costs around Rs1.2 lakh for a six-week treatment.
Novartis, which has a patient access programme for Glivec, currently offers the drug either at full price or free. A spokesperson for Novartis said she wouldn’t know if the company will have a differential pricing structure for this medicine.
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First Published: Fri, Mar 28 2008. 01 07 AM IST