Daybreak - Where are Indian patients getting their cancer drugs from?

Episode Date: January 23, 2023

Despite winning the 'pharmacy of the world,' two out of five cancer patients in India have to borrow money and sell their assets to get treatment. The price of many innovative patented oncology drugs in India are as high as in developed countries making them inaccessible for a large section of patients.Where are Indian cancer patients turning to for cheaper cancer medicines?Tune in to find out.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me. My interruptions, my analogies and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. During the pandemic, India lived up to its title of the pharmacy of the world. As of March 2021, we had exported COVID vaccines to 70 countries. But in the same India, two out of five cancer the patients have to borrow money and sell their assets to get treatment. This number is based on the results of a study that was conducted by the International Institute

of Population Sciences in 2018. And even if patients have insurance, the cover gets exhausted in surgery and chemotherapy, and patients are left to bear the cost of the drugs themselves. Last month, in December 2022, a parliamentary panel that studied the economic effect of cancer in India, asked the center to provide free cancer treatment to middle-class households through a government-funded health insurance scheme. They asked the government to cap cancer diagnostic and treatment services in government and private hospitals. But in November last year, the Union Health Ministry had released a new national list of essential medicines with more anti-cancer therapies in it. Medicines included in this list are under the ambit of the drugs

price control order, which basically caps the prices of these life-saving medicines. So that does sound like a relief, right? Well, it wasn't really, because the cancer drugs that were added to the list were generic drugs. The prices of newer and more innovative drugs that are protected by patents continue to remain out of reach for most cancer patients in the country. So where then are Indian cancer patients getting their medicines from? Welcome to Daybreak, a new podcast from the Ken.

I'm your host, Nickda Sharma, and I don't chase the new cycle. Instead, thrice a week on Mondays, Wednesdays and Fridays, I will come to you with one business story that is worth understanding and worth your time. Today is Monday, the 23rd of January. To understand why cancer therapy is so expensive in India, we need to understand how the Indian pharmaceutical market works. It is divided between generic and patent. drugs in a 60 is to 40 ratio.

Generic drugs are basically the ones whose patents have expired and any pharma company is allowed to manufacture them. In India, three-fourth of patients use generic drugs because they are comparatively cheaper. Patented drugs that are sold by MNCs on the other hand are more expensive. This is because they focus on newer therapies like immunotherapy, targeted therapy and biosimilars. Naturally, thanks to the constant research and innovation, patented drugs promise higher chances of survival than older drugs. But in India, there is practically no price control on patented cancer drugs. It is like sprinkling salt on the wounds of already suffering cancer patients.

A senior executive with the American farmer major Eli Lilly told my colleague Ruhi Kandahari who covered the story that 40% of the cancer, the drug's market in India is made of patented drugs. But they are rarely prescribed because most patients cannot afford them. Now, it is not like India does not have legislation for capping the prices of drugs, but patented drugs are outside of it. And despite amendments to the price control policy, it seems that reducing the prices of more effective cancer drugs is not really a priority for the Indian government right now.

Another challenge for a patient is that hospitals in India sell cancer drugs with profit margins. If the drug is patented, the margin goes up to 15%. And if it is generic, they mark up the price by 50%. And what makes matters worse is that most hospitals do not allow patients to source these drugs directly from the distributor. Patients are left struggling between high prices, higher margins, and the lack of cheap. alternatives. They are left utterly distraught. So now that we understand why cancer drugs are so expensive in India, let us look at how Indian patients are finding a way around this problem. According to a first of its kind WHO report from December 2018, the price of many cancer

drugs in India are as high as in developed countries. So Indians are turning to their neighbor. Bangladesh. Yes, you heard that. that right. The thing is, the international trade laws allow least developed countries or LDCs like Bangladesh and exemption from patent laws. So the country has been making the most of this opportunity. Dhaka-based pharma companies are not only producing cancer drugs, they are selling them at prices much lower than India. So how does this work? In 2019, the Ken was privy to an email exchange that laid it all out. A Dhaka-based pharma company called Inceptor Pharmaceuticals was offering lapotinib, which is a drug

used for breast cancer and other solid tumors for $196 per tablet. This was if the buyers picked up the drug from Dhaka on their own. In India, the same lapitinib was being sold for more than double the amount at $445 by GlaxoSmithKline. Enter S Distributors. It is an Indian company whose owner the Ken spoke to, but they did not want the company to be named. Now, S Distributors is among the many importers

who have made a business out of connecting Indian patients to Bangladeshi cancer drugs. It sells some of the latest drugs used in cancer. These medicines have fewer side effects. They reduce the chances of relapse and generally offer better probability of survival. A Mumbai-based farmer exporter told again that there is another route for getting these medicines from Bangladesh, via shipping.

He has often asked a former colleague who now works with one of the top Bangladeshi pharma companies to deliver cancer medicines via courier to India. According to his estimates, thousands of such inquiries are made from India every single day. And that seems like quite a believable estimation considering the number of reported cancer cases in India in 2022 was between 19 to 20 lakh. The real number is actually supposed to be 1.5 to 3 times higher. Dinesh Abrol, who is a professor at the National Institute of Science, Technology and Development Studies in Delhi, told again that patented drugs will stay outside the ambit of price control in India. And why did he say this?

Abruel became a part of the Committee on Compulsory Licenses or CLs in 2006. And he observed a trend in the Indian government stance when it comes to reducing the prices of patented drugs. CL is when the government intervenes to either produce a patented drug or to get domestic manufacturers to produce it for the domestic market. This is done to make a drug more accessible and affordable for. for the population. But according to Abrel, for a decade, the Department of Industrial Policy and Promotion

has argued that CLs have a negative impact on investments by multinational companies in India. The committee that Abrel was a part of wrote a report that recommended giving CLs or compulsory licenses to allow Indian companies to manufacture 19 patented drugs. Most of them were anti-cancer drugs. But the report was never made public and the government has not followed the advice.

Not all is lost though. There still might be some hope for those who are looking for newer therapies without burning a hole in their pockets. How? The answer is in the support programs that pharma multinationals run. They handpicked patients who either get the drugs for free or at heavily discounted prices. For example, the Swiss MNC Roche has seen. something called a blue tree program in India. Through it, the company gives discounts or bundles one dose of a drug with a few free doses.

This is only for cancer patients who cannot afford these medicines. But through these programs, MNCs also managed to continue selling drugs at international prices in India. Since India only contributes a small percentage in any MNC's global revenue for oncology, MNCs do not want to expose their new drug to a lower price in the country. The head of the oncology department at an MNC told again that none of the MNCs look at India as a low-income country despite the huge economically disadvantaged population. There is a big gap between patients who do not receive treatment and those who do.

He said that both hospitals and oncologists are limited in numbers, and this is why only about 5% of the population demand oncology drugs. And this 5% is usually the rich who can actually afford it. But for those who cannot afford the drugs being sold by MNCs, Bangladesh is still an option. As in LDC, Bangladesh's pharmaceutical industry has grown a thousand times since 1982 to $2 billion, making it the biggest white-collar employer in the country. Not only does it supply to the entire domestic market, but also to over 100 other countries, including the US.

Even though the exemption that Bangladesh enjoys from patent laws could end in the next couple of years, for now it is still one of the cheapest alternatives for most Indian cancer patients. Until then, hopefully, the Indian government will implement the advice of the Parliamentary panel and make cancer drugs more accessible through government-funded schemes. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters, subscriber-only apps and podcast extras. Head to the Ken.com and click on the red subscribe button on the top of the website.

I am Sniq Dha Sharma, your host, and today's episode was edited by my colleague Rajiv Sien.