Does anyone know what the actual pricing is in the Tarceva case? News reports such as the Hindu and the Mint state the price of Roche’s drug is Rs 4800 per tablet, while CIPLA sells at Rs 1600. I’ve heard however that Abhishek Singhvi argued that the price of the drug is only Rs 3200 and that of this amount, 30% is the customs duty (imposed for imported drugs). In other words, without such duty, the price of Roche’s drug is only Rs 2400 i.e. about Rs 800 more than CIPLA’s price of Rs 1600. If this is indeed the case, then it seems to me that the price differential between the innovator drug and the generic is unusually small here. Does anyone have accurate details on the pricing? Any doctors or pharmacists or patients visiting this blog?
Girish Malhotra of Epcot International who runs a popular blog dealing with pharmaceutical manufacturing has a great post on pricing issues. In response to my post dealing with the paradoxical issue of CIPLA facing allegations of overpricing Cipro (whilst at the same time attacking Roche over their excessive pricing), he writes:
“Ciprofloxacin in India (250 mg) sells for Rs. 5.00 per tablet compared to more than a dollar in US. Based on what I can estimate, selling price of 250 mg tablet out the Cipla or Ranbaxy or Matrix door should be about no more than Rs. 1.00 to 1.50 per tablet. I do not know what would be the distributor mark-up.
On the Roche case, pricing is very simple and influenced by two factors. 1) The process conversion efficiency is low and it adds to the manufacturing cost. 2) Since the drug is effective and no one wants to die on their will, they will pay whatever will extend the life. Using this as the basis, drug companies will charge whatever one can they can get. If people are willing to pay 2 lakhs, that would be the price. “
