The subject of the spiralling costs of cancer medicines and their implications that have frequently been highlighted the world over were dwelled on in a recent report (“Cancer Care Plan and Management”) by the Rajya Sabha’s Standing Committee on Health. Alluding to the implications of the high cost of cancer care, the Committee noted that “about 40% of cancer hospitalization cases are financed mainly through borrowings, sale of assets and contributions from friends and relatives”. This situation has arisen, according to the Committee, because “even average out-of-pocket spending on cancer care is too high” and “spending for cancer care in private facilities is about three times that of public facilities”. The Committee has, thus, highlighted the seriousness of problems concerning the treatment of cancer, the estimated incidence of which in India was nearly 1.4 million in 2020.
Impact on survival rates
The catastrophic treatment cost has seriously impacted survival rates in developing countries. In breast cancer, the five-year survival rates in India and South Africa are estimated to be 65% and 45%, respectively. In contrast, in high-income countries, it is nearly 90%. In its explanation of this dismal situation, a World Health Organization (WHO) report on the pricing of cancer medicines and its impacts had stated that the cost of a course of standard treatment for early-stage HER2 (human epidermal growth factor receptor) positive breast cancer would be equivalent to about 10 years of average annual wages in India and South Africa and 1.7 years in the United States.
According to WHO, the costs associated with other medical care and interventions (such as surgical interventions and radiotherapy) and supportive care would make overall care even more unaffordable.
In the treatment protocol for breast cancer, CDK (cyclin-dependent kinase) inhibitors constitute a major therapeutic tool, especially for metastatic breast cancer. Three drugs, Ribociclib, Palbociclib and Abemaciclib, belong to this therapeutic class, which help in slowing the spread of cancer cells in the body. A month’s treatment using these drugs could range between ₹48,000 and ₹95,000 and the patient is expected to take one of these medicines for the rest of her life.
If one can tabulate the use of cancer drugs and the approximate price for a month’s treatment one has: Ribociclib (Novartis) ₹64,455; Palbociclib (Pfizer) ₹87,000; Abemaciclib (Elli Lilly) between ₹47,752 and ₹95,000 (Sources: www.1mg.com; pharmeasy.in/).
The justifications by pharma companies
Excessive costs of breast cancer medicines can be explained by the interplay of two related factors. The first is the argument advanced by the large pharmaceutical companies — that they spend over $3 billion in bringing a new molecule to the market, which they must recoup in order to remain in the market for innovation. However, the WHO report mentioned above observed that spending on research and development may bear little or no relationship to how pharmaceutical companies set cancer medicine prices. Companies set prices with an eye to maximise profits, thus denying patients from taking advantage of medical breakthroughs.
A second factor that allows the companies to sustain their high profit margins is intellectual property protection. Over the past three decades, pharma companies in the developed world have successfully persuaded their governments to strengthen the rights that they derive from patents and other forms of intellectual property rights by which they can exercise monopoly control over their products. Moreover, the scope and the power of these monopolies can become nearly absolute due to several factors, of which two are as follows.
Ordinarily, patent rights over a medicine last until the expiry of its patent term, after which generic competition leads to a reduction in its price. However, in the case of several non-communicable diseases, including cancer, the situation could be quite different. Even before the generic producers enter the market, newer therapies could be introduced as standard care for treatment, replacing drugs of an earlier generation. Additionally, in the case of pharmaceutical patents, the leading firms in the industry often obtain patents on incremental innovations involving older medicines (“evergreening” of patents), thus extending their monopoly rights over the medicines.
The three breast cancer medicines mentioned above are currently under patent protection — implying that Indian companies cannot manufacture these medicines without the consent of the right holders. Pfizer’s patent rights on Palbociclib will expire in 2023, while Novartis’ rights on Ribociclib and Elly Lilly’s rights on Abemaciclib would expire between 2027 and 2029, respectively. Therefore, high prices on these medicines will continue at least until 2029, and possibly beyond, if these drugs are subjected to “evergreening”.
The lack of access to these critical medicines has not only pushed the life of patients and their families into deep financial stress but has also jeopardised their right to live with dignity, a fundamental right guaranteed under Article 21 of the Indian Constitution. The Supreme Court of India has interpreted the right to life as the most precious human right, which forms the “ark of all other rights and must therefore be interpreted in a broad and expansive spirit so as to invest it with significance and vitality which may endure for years to come and enhance the dignity of the individual and the worth of the human person”. In this spirit, the Court has, in several judgments interpreted the right to health as an extension of the right to life under Article 21. Further, it must be mentioned that according to the WHO Constitution, “enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being”.
A way out
Thus, when all aforementioned considerations demand that cancer medicines must be provided to the suffering at affordable prices, what are the options before the Government? The most obvious option is to authorise Indian companies to domestically produce high-priced cancer medicines, including those mentioned above, by granting compulsory licences (CLs) in keeping with Sections 84 and 92 of the Patents Act. The CLs override patent rights, enabling domestic companies to manufacture generic alternatives when prices of patented medicines are high. Alternatively, the Government can invoke provisions of Section 100, which empowers it to authorise any entity to use a patented invention without the authorisation of the patent holder. Section 100 can be useful if no domestic company shows interest in obtaining a CL for any of the cancer medicines mentioned above. In view of the concerns expressed by the Rajya Sabha’s Standing Committee on Health regarding the high prices of cancer medicines, invoking the provisions of Section 100 seems to be the best way forward.
In 2001, Trade Ministers of WTO member countries endorsed the Declaration on TRIPS Agreement and Public Health that recognised the right of every country to grant CLs. Even then, advanced countries opposed the use of this instrument. However, during the past two years, these countries have changed their stance. The United States did so in 2021, through its trade administration’s annual review of the state of intellectual property protection and enforcement by the U.S.’s trading partners, namely, the Special 301 Report. Almost simultaneously, the European Union backed the use of CLs for increasing domestic production of COVID-19 vaccines and medicines by developing countries, which was endorsed by WTO members earlier this year. When the present situation looks propitious for the granting of CLs, why is the Indian government stepping aside from using this instrument to promote the domestic production of cancer medicines, and making them affordable?
Biswajit Dhar is Professor of Economics, Jawaharlal Nehru University. Chetali Rao is Consultant, Third World Network