Special Report: Killing costs

By: Rohan Gupta in New Delhi

Published on 04 February, 2019

On 11 May, 2018, Mumbai Police lost one of its most decorated officers, Himanshu Roy who was a former chief of Anti-terrorism squad. He was battling cancer and finally committed suicide. A one-page suicide note was recovered from his residence, it said he had taken this step because he had been suffering from cancer and couldn’t take it anymore. 

He is not the only victim of cancer.

India estimated 39 lakh cancer cases, according to India’s National Cancer Registry Programme in 2018. The disease claimed 7,32,921 lives in 2016; only heart disease caused more deaths. In the same year, an estimated 14 lakh were diagnosed with the disease. Breast cancer is the most common cancer among females, while among men, it is lung cancer. Worse, according to the World Health Organisation (WHO), nearly 10 lakh new cases are reported in India every year.

The numbers are stark, yet they do not capture the whole story.

We explain through statistics, how it is not just the high incidence of cancer, but also issues of affordability and access to treatment, which are responsible for cancer deaths in India.

Economic burden comes hand-in-hand for families fighting cancer. Both, the diagnostics, as well as treatment costs, are expensive. Thus, cancer treatment in India is not just about access to treatment, but also the affordability of it. The treatment of the commonest form of cancer in India – head and neck cancer – usually costs between Rs. 15,000-20,000 (US$210 to US$280) a month, in government hospitals. The cost of treatment in private hospitals is "forbiddingly high", according to a research article published in Asian Pacific Journal of Cancer Prevention. The average monthly income of a person in India is close to Rs 10,000 (US$139), according to the World Bank. The affordability gap, is huge.

India is the pharmacy to the world, yet more than 60 per cent of total healthcare spending is out-of-pocket expenditure, according to National Health Account Estimates data. As a result, people end up getting pushed into poverty because of healthcare costs, and one of the reasons for this is that India’s cost regulation of drugs is faulty.

We analysed how pricing of medicines function and what are the loopholes.

The National Pharmaceutical Pricing Authority (NPPA) is responsible for regulating drug prices in India. It periodically caps the prices of some drugs, which it deems as essential, by bringing them under the National List of Essential Medicines (NLEM). In 2017, the NPPA capped the price of Trastuzumab at Rs 55,812.29/ 440 mg (US$784). But the same drug was actually available in the market at half the cost. Officials at the NPPA say that the whole exercise of cost regulation is faulty.

“The price ceiling is decided by taking a simple average of the MRP of all medicines in a particular segment with sales of more than one per cent,” said an NPPA official. “It does not take into account the huge discounts being offered by companies on their drugs”.

Eventually, when the drug reaches the market, it is sold at different rates. Even though cancer drug prices are still much lower in India than in most developed economies, common people find it hard to purchase drugs.

“Uncontrolled trade margins in the retail market and unscrupulous profiteering by hospitals and pharma companies is the major reason for inflated cancer drug prices [in India],'' says Leena Menghaney, a lawyer with Medecins Sans Frontiers (MSF), a global humanitarian organisation that works towards making medical aid accessible.

A 2017 study in the medical journal, Oncotarget, compared the pattern of affordability of cancer drugs in seven countries – Australia, India, China, Israel, South Africa, UK and the US. Comparing the cost of a basket of cancer drugs and the purchasing power of the country’s residents, cancer drugs were found least affordable in India. India has lagged behind in the discovery of new oncology drugs, which is another contributing problem to high prices.

Lowering drug prices, or capping them, is one solution to the pervasive problem of cancer drug affordability.

Pharma companies are accused of making huge profit margins by selling medicines to distributors at prices much higher than the cost of production. Often, the companies cite back-end research costs which have gone into the production of these new drugs. The problem arises when most of the companies are unwilling to be transparent about the costs.

When Novartis introduced Glivec in the Indian market, it cost Rs 1,25,000 (US$1,756) per month. But after it lost the patent case, generics entered the market, which were priced at just Rs 4,000 - 9,000 ($56 to $126). According to Yogendra Sapru of NPAA, "a new version is available, which costs only Rs 1,000 ($14). It’s easy to see how low the cost of the production must be for these drugs".

During a legal battle over patent rights of its cancer drug Glivec, Novartis AG claimed that it has spent about 100 crores to introduce a new medicine in the market. But a closer look reveals that there are serious loopholes in the way the company claimed R&D costs of Glivec. The clinical trails were on a much smaller scale than claimed by the company, and the company had benefited from tax reprieve. Throughout the legal case, Novartis claimed it did not benefit from the tax credits.

India’s drug market has mushroomed in the last decade. There is stiff competition, and to beat competition, pharma companies woo doctors in different ways, not all of them above board. During series of interviews with doctors and pharmacologists, we found that domestic and multinational drug makers routinely shower Indian doctors with gifts, posh junkets abroad, and cash payments disguised as consultancy or other types of fees. Under Indian law, doctors are prohibited from accepting cash, gifts or travel from drug companies. Still, enforcement is rare.

“Somebody is doing something for you,” says a Delhi-based cardiologist who wish to remain anonymous. “Obviously, [if you take the gift] you will want to return the favour.”

Public health experts and Indian doctors say that as a result of the tactics of drug companies, drugs are dangerously over-prescribed and expensive brands are prescribed instead of cheaper brands. That can be devastating for patients — physically and financially — in a country where health care is mostly private and non-subsidised.

"Pharmaceutical drugs, which are available in retail markets, should be provided by the government for free as long as retail trade margins are uncontrolled,” says Menghaney. “So, the government can either bring in a mechanism to control trade margins or subsidise cancer medicines partly, if not fully."

The difference in cost between the various brands of the same drug varies and there are reasons for this price variation which include majority of them being under patent protection and also the present market for new chemical entities being monopolistic in nature.

The problem of huge margins is very much present in the retail markets. Retailers are generally reluctant to sell cancer drugs due to low frequency of sales, so the manufacturing companies offer huge commissions to these retailers. “The commissions are reflected in the inflated retail prices which makes the medicines unaffordable,” said social activist Arun Gadre. “The MRP in some cases can be Rs.900 while the cost to the retailers is just Rs.100, the profits in some cases being shared by the retailers and doctors who prescribe such medicines.” 

Even when the manufacturing cost of a particular anti-cancer drug is less, middlemen who are involved in distribution and retail sale of drugs are quite often responsible for high and indiscriminate variability of prices seen among various drugs.

The legal rules are lax even in the case of doctors accepting kickbacks from pharma companies to prescribe their drugs. In the 2014 amendment to Indian Medical Council (IMC) regulations, punishment was introduced for the first time for doctors who engage in bribery. According to the rules, the punishment varied from a warning to a 1 year suspension depending on the amount of bribe involved. This amendment, according to some doctors will not lead to any significant impact.

The burden of proof is on the prosecutor until the prosecutor can prove a mismatch between the assets and known sources of income of the accused. But Medical Council of India (MCI) is ridden with its own problems of corruption and inefficient policies.

According to Amit Sengupta in a Lancet report, MCI can function better in a more democratic environment, which has administrators and lawyers also on board. At present, the board comprises only doctors.

There are rampant cases of medical misdiagnosis also.

Syed Z. Imam, 66, a former Civil construction manager shared a painful story of his wife, Nasra Imam. She was diagnosed with ovarian cancer in 2011. She was taken to a gynaecologist when some health problems were discovered. Without fully diagnosing the disease, the doctor conducted a surgery even though she had suspected cancer. “She should've referred my wife to an oncologist,” said Syed Imam. "The doctor’s decision delayed the course of treatment.”

Nasra Imam is still undergoing treatment. “Now I help other patients to get information about the treatment,” said Syed Z. Imam. “It is important for cancer patients to have clear understanding of the disease and treatment so that they get due medical attention at the right time.”

This highlights the other aspect to the cancer cost economics which is the shortage of oncologists in India and this is a huge problem.

In cases where Indians have resources for cancer treatment, they fail to have access to treatment. There are only 1,250 oncologists available for a population of 120 crore people in the country. The shortage of oncologists means that 60% of all cancer patients are being treated by non-oncologists. The lack of access to resources to diagnose and treat cancer is a major hindrance to the equitable delivery of cancer care which is a result of poor diagnostics by non-oncologists and lack of diagnostic equipment. Another aspect to the problem is the concentration of oncologists in India. Almost 40-60% of the facilities and oncologists are concentrated in the top 7-8 metropolitan cities of India hampering equitable access to treatment.

According to Dr. Sajjan Purohit , a medical oncologist with Rajiv Gandhi Cancer Institute and Research, Delhi, the issue becomes more pertinent when we consider that about 80% of the oncologists are radiation oncologists. "There is a major dearth of medical and surgical oncologists, who are super-specialists,” said Dr Purohit. 

To standardise treatment and to ensure that non-oncologists are aware of the latest developments in cancer treatment, a memorandum was sent by Indian Cooperative Oncology Network to the Union Health Ministry to include oncology training in courses of 336 medical colleges. This will help familiarising them with the existing guidelines and procedures for cancer treatment. Such efforts are much needed to ensure early daignosis. Almost, 60% to 70% cancer cases can be prevented if diagnosed early claims a study by All India Medical Institute.