Tax cut won’t mitigate high prices for cancer, rare diseases medicines, say patient advocacy groups

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The recent Union Budget announcement provided custom duty waivers to 36 exorbitantly priced cancer and rare diseases drugs, but patient advocacy groups highlight that the tax cut doesn’t tackle the underlying problem of high prices due to patent monopolies that block local production and offer very little to ease the financial hardship faced by patients. 

Medicines imported into India generally attract basic customs duty of 10%, while some categories of drugs attract a concessional rate of 5% or nil. 

“The Union Budget move is like a band-aid. The drugs that are listed for custom duty waiver are generally those that are not in local production, are under a patent monopoly and block generic competition,” said Leena Menghaney, lawyer and consultant, specialising in public health.

One example is a rare disease drug Risdiplam — over which a major patent dispute is being fought in the Delhi High Court and a compulsory licensing petition is pending before the Kerela High Court. This medicine is under a patent monopoly till 2035, and Roche has not granted any voluntary licence for its local production and supply at an affordable price. 

“This results in a lack of competition and an exorbitant and unaffordable price for persons living with spinal muscular atrophy,” said Ms. Menghaney. 

The MRP of the drug Risdiplam is over ₹6 lakh per bottle and even with discounts from Roche the drug costs over ₹2 lakh per bottle.  So, for a patient weighing more than 20 kg, a bottle will last only for 12 days and over the course of the year he/she will require approximately 30 bottles per year, amounting to ₹1,80,00,000 and with a discount ₹61,15,200 per patient/ per year. 

The custom duty waiver will not be enough to make the drug affordable to patients as envisaged by the government’s Rare Diseases Policy. 

Demand for generic production

Patients are demanding that generic production by Indian pharmaceutical manufacturers, as this could bring the price down by over 99% as production cost studies by experts suggest the drug Risdiplam could be made available for as low as ₹3,024 annually.

In the past, such measures have slashed the prices by introducing local generic versions of cancer drugs — by an astounding 97%.

Other expensive drugs now included in the category are Risdiplam (approximate cost for a month — ₹6,20,000), Obinutuzumab (price for 1000 mg vial – approximate ₹3,99,305). 

K.M. Gopakumar, senior research and legal adviser, Third World Network (TWN) said the customs duty might be in the range of between 5 and 15%. And eliminating the customs duty would not make certain drugs affordable. In the larger public interest, the government should publish the current MRP and apply import duty on these 36 medicines. That would bring clarity on how far the import duty elimination would result in affordable prices, he pointed out.

Nilesh Patel, managing director, Kashmik Formulations, said the move would marginally ease the financial burden on cancer patients and their families.