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Price war in cancer care

Cipla says that its decision to slash prices of cancer drugs is purely a humanitarian gesture. In cancer treatment, it is planning to do what it did in anti-AIDS drugs many years ago by launching them at low prices.

twitter-logoE Kumar Sharma | May 4, 2012 | Updated 21:25 IST

E Kumar Sharma
E Kumar Sharma
Indian pharma major Cipla's announcement that it has decided to slash the price of generic version of Bayer's cancer drug Nexavar to treat certain types of kidney and liver cancers from around Rs 28,000 to Rs 6,840 for a monthly dose is seen as a price war in the cancer treatment.

Cipla Chairman and Managing Director Dr YK Hamied however does not see this as any attempt at triggering a price war. "Price of drugs is like water. Water finds its own level. To each his own for every company does what it thinks is best.'' Hamied tells BT. He does not see any link in this price reduction to the Natco pricing of the drug at Rs 8,880, following the compulsory licence it was granted in March this year to sell the generic version of the innovator company Bayer's drug Nexavar, which is priced at around Rs 2,80,000 for a monthly dose.
 
As for Cipla, Hamied argues, the price reduction is purely a humanitarian gesture on the part of company as it is planning to do in cancer what it did in anti-AIDS drugs many years ago by launching them at low prices. Apart from price reduction of Soranib (Cipla's brand for Sorafenib) in this case, it has also reduced the prices for its other drugs for brain cancer and lung cancer too. But why now? Why could the company not have launched the drug at this low price of Rs 6,840 instead of around Rs 28,000 that it has been maintaining so far for the generic version of the Bayer drug? "We could not have done this earlier. We have improved our technology now and have also gone for basic manufacturing and can afford to do this now. Plus, with the court giving the Natco pricing, there is now a new benchmark,'' says Hamied.
 
Those at Natco Pharma however do not think the sharp reduction in the drug price by Cipla will impact the company as they argue that people will be able to understand that the Natco pricing is reasonable considering that it needs to pay a 6 per cent royalty to the innovator company - Bayer. Plus, each year, it needs to provide the drug free of cost to 600 patients and Cipla has no such compulsions. Plus, because Cipla's drug is launched "at risk", there is a danger that its supplies could get affected in case of any adverse court ruling.

Cipla is fighting a patent infringement suit by Bayer over generic version of its drug Nexavar in the Indian courts. Also, according to a senior official of Natco, who did not wish to be identified, the patients have been able to get the benefit of a lower price from Natco, which launched the drug immediately after it got the compulsory licence and at a time when the Cipla drug was still priced at around Rs 28,000 for a monthly dose.

Besides Soranib, Cipla has also announced price reductions brain cancer drug (molecule -  temozolamide 250 mg) from Rs 20,250 to Rs 5,000 for a pack of five capsules and lung cancer drug (molecule - gefitinib 250 mg) from Rs 10,200 to Rs 4,250 for a pack of 30 tablets.

Whatever the prices now, for the cancer patient, the drug pricing direction, may only signal new relief!

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