By Dr. Arun Mitra
Since the cost of drugs comes to about 70 percent of the out of pocket expenditure on health, this becomes a cause of major concern. Because 80 percent of medical care in our country is in private sector and advanced tertiary care is mainly coming up in corporate sector, the cost concerns are increasing. As per the National Health Policy document 2017, every year 6.3 crore people are pushed below poverty line due to out of pocket expenditure on health. It is, therefore, very important that prices of drugs are streamlined and made affordable. Unlike consumer products, where the buyer has a choice and can decide on what to buy, medicine is something over which the patient has no choice and is dependent on medical advice. The disease is not by choice. Therefore, it is all the more essential that the cost of drugs is within the reach of every citizen. The government owes a responsibility to bring down the cost of medicines.
There is a National List of Essential Medicines (NLEM), the cost of which is to be controlled on a priority basis. Essential medicines are those that satisfy the priority healthcare needs of a majority of the population. The primary purpose of NLEM is to promote rational use of medicines, considering the three important aspects i.e. cost, safety and efficacy. Because of their essential nature, the price of these drugs needs to be fixed. Many of these drugs have been manufactured in bulk by Indian drug companies mainly in the public sector and have been used in various national health programmes.
Drugs in our country are marketed in two forms: branded medicines and trade generics. The latter constitute about 15 percent of the whole pharmaceutical market. Cost of the generic ones is expected to be low so that the benefit goes to the patient. Branded drugs are expensive because their marketing involves many chains and promotional activities. On the other hand, approximately 50 percent of the trade generics are consumed by dispensing doctors. But the trade margin in several generic products is very high, thus belying the very purpose of cheap drugs to the patient.
Though the issue has been highlighted after discrepancies in prices of coronary stents came up in public knowledge, these have been discussed at various levels and different forums. Exorbitant maximum retail price (MRP) printed on the medicine causes distortion of price in the market. Trade margin allowed to the retailer in some cases is as high as 1,800 percent. In the hearing of a case in the Punjab and Haryana court, the Ranbaxy Laboratories Vs. State of Haryana and another, dated 19 March 2013, the court said: “Before parting with judgment , it has to be noted that although the petitioner is allegedly selling the drug in question to the consumers at about 900 percent of reasonable price of the drug, but there appears to be no legal provision in force to save the consumers from such naked fleecing by the petitioner or other drug manufacturers by overpricing the drug to such an extent. It is surprising that no remedial or ameliorating step has been taken either by the state or by the Union of India in this regard. The court hopes that now at least the concerned authorities shall wake up and also take some step to save the consumer from such fleecing”.
A committee was constituted by the Department of Pharmaceuticals in the Ministry of Chemicals and Fertilizers on 16 September 2015 under the chairmanship of Shudhansh Pant, joint secretary pharma, to compare the prices of trade generic and regular channels of marketing and give its recommendations. This committee suggested capping of the trade margin as per the per unit price. Fearing that if capping of prices was done in all segments, the manufacturers would shift to medicines with high cost for the purpose of more profit, the committee recommended putting of lesser cap on the low cost medicines. It opined that there should be no cap on drugs the retail price of which is up to Rs. 2 per unit, i.e., per tablet/capsule/vial/tube/bottle/injection etc. For products with per unit retail price from Rs. 2 to Rs. 20, the trade margin should be a maximum of 50 percent; and for those costing between Rs 40 and Rs 50, it should be up to 40 percent while for those costing above Rs.50, the trade margin recommended was a maximum of 35 percent.
Drug prices can be streamlined to a large extent if these recommendations are implemented. There is need for a one drug one price formula. In fact, any formulation, once it is labeled as medicine, becomes essential. So the price of all drugs should be under check. For this purpose, the National Pharmaceutical Pricing Authority (NPPA) should be strengthened. The Uniform Code of Pharmaceutical Marketing Practices (UCPMP) should be made mandatory. The PSUs, which have been rendering great service to the nation by supplying cheap bulk drugs at the time of national calamities and in the national health programmes, should be strengthened if the dream of affordable health care is to be met. (IPA Service)
The writer is senior vice President Indian Doctors for Peace and Development, Former Chairman Ethical Committee Punjab Medical Council & Member core committee ADEH (Alliance of Doctors on Ethical Healthcare).
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