The Medical Council of India (MCI) – the highest body that regulates medical education and ethics among doctors – made an announcement that all doctors should write their prescription of medicines in generic name only. This attracted much media attention in spite of the fact that this statement by the MCI has absolutely no practical application because medicines are not sold in the market under the generic name!
But what did not catch the media and public attention was a small news item, that the Central government has a set of plans that wants to take away price control on several important medicines. Will prices of medicines increase by this? What impact does it have on the common man?
According to the 71st National Sample Survey report of 2014, out of the total healthcare expenditure, 70% is just on the purchase of medicines. Therefore, it is obvious and important that drug prices are regulated so that the drug companies do not make unnecessarily huge profits at the cost of the health of people. Even developed countries that believe in free market have in place a policy for regulating drug prices.
Drug prices are regulated by National Pharmaceutical Pricing Authority (NPPA) through Drug Price Control Ordinance (DPCO) – both under the Ministry of Chemicals and Fertilisers (sorry, the Health Ministry has nothing to do with drug pricing!). The number of drugs under the price control order is around 900 essential drugs (based on WHO guidelines) in addition to 467 medicines. On October 19, the Niti Aayog suggested that DPCO and NPPA should either be dismantled or totally diluted. Interestingly, just four days prior to this, the Supreme Court directed the NPPA to create a ceiling for drug prices so as to keep drugs at an affordable price.
During the hearing, Justice G S Singhvi made it clear that “drugs prescribed by doctors, eminent and not so eminent, is going beyond the reach of the common man. People have to go hungry to pay medicine bills. The government can have concern for drug manufacturers but it must have substantial concern for the common man.”
It suggested that essential drugs should be delinked from price control, justifying that it is price control that is hindering their manufacture. Why did the Niti Aayog suggest an action that would amount to disobeying the highest court? Let us look at the background. India has a huge private healthcare sector which is not accessible to the vast majority because the poor just cannot afford it. And it is exactly this private sector that gives a call for most policy decisions made by the government. The Indian drug industry has been crying hoarse for long that drug prices should be decontrolled so that it can further its profits and has sought relief from courts.
Two judgmentsHowever, in the last three weeks, two judgments have hit the drug industry (both Indian and multinational) very hard. One is the Bombay High Court order of September 26 and the other is that of the Supreme Court on October 22. Both the courts together have held that the drug manufacturing companies are liable for overcharging recovery to the tune of Rs 6,000 crore, as directed by the NPPA.
The drug industry has always played its dirty games to overcome drug price regulations. For example, tablet Paracetamol 500 mg is under price control and the industry would just overcome this by manufacturing tablet Paracetamol 650 mg!
All such and many more such unscientific gimmicks to hoodwink the policy makers and people have made the drug companies achieve significantly huge profits. Perhaps no other sector has such a huge profit margin as the drug industry.
In spite of DPCO 2013, the Indian drug industry grew from Rs 70,000 crore to more than Rs 1 lakh crore and an equivalent amount for exports. But the industry is just not happy and wants much more profits. It fears that drug manufacturers will have to pay a penalty of Rs 6,000 crore as directed by the court which has propelled and pushed the drug industry to dismantle the entire drug regulation mechanisms. It is to be noted that only 12% of the market is under price control. So, 88% is non-price controlled drug market. Even the 12% of drug price regulation has not been effectively implemented.
Civil society members of All India Drug Action Network (AIDAN), way back in 2003, filed a PIL in the Supreme Court seeking its intervention in the policy of the government, with a prayer to regulate drug prices and to overcome loopholes in existing policies. It is 13 years since the case filed by AIDAN has been pending. And the point to ponder is, was not the Niti Aayog aware of this? They have absolutely no justification to claim ignorance of this case. Also, was not Niti Aayog’s October 19 suggestions sub-judice? But who cares for the court or the common man on the street? Definitely not the government or the policy makers.
(The writer is President, Drug Action Forum – Karnataka)