A wide gulf between the procurement rates of crucial drugs and their retail prices may result in exploitation of patients and profiteering by hospitals and pharmacies, in the process nullifying the effects of government policy.

The government on Tuesday said the National Pharmaceutical Pricing Authority (NPPA), which is empowered to fix a ceiling on the rates of certain medicines, had notified the prices of 72 drugs. If a retailer charges more than the capped price, or wrongly labels the maximum retail price (MRP), she will be penalised for over-charging, says the NPPA circular.

Activists says the price-caps on the drugs are way higher than the rates for which they are procured.

For example, the price of a Trastuzumab 150 mg injection, which is used in the treatment of breast cancer, has been capped at ₹18,125. However, activists point out that the MRP of the drug is up to 51 per cent higher than the procurement rates for hospitals and chemists.

“The hospitals buy Trastuzumab 150 mg at ₹12,000 for each vial. The price cap on the drug is ₹18,125. This means that a retail chemist at the hospital can charge as much as ₹18,125 for a vial. This is a case of huge profiteering by the hospitals. Also, Trastuzumab 400 mg is capped at ₹50,000. However, distributors sell it at ₹23,000 apiece. The trade margins charged by pharmacies in hospitals are too high and put a heavy financial burden on women with breast cancer, who are already reeling under ahuge financial burden,” said Leena Menghaney, Head – South Asia, Access Campaign, Doctors Without Borders, adding that: “Pharmaceutical companies offer high trade margins to hospitals so that their brands are prescribed and action should be taken to curb this practice.”

Aju Mathew, Oncologist and Director, Non-profit Kerala Cancer Care, says the ceiling prices of Oxaliplatin 50 mg, a chemotherapy drug used in colorectal cancer, had an NPPA ceiling of ₹2,439.44 per pack, which is higher than the price of most available brands in the market.

“It is quite mystifying to see why NPPA has set a higher ceiling price than what is currently available in markets,” said Mathew.

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