Strict monitoring of drug prices crucial

Last Updated 10 August 2015, 19:12 IST

Access to basic healthcare services is the legitimate right of every Indian citizen and the government is mandated to protect this sovereign right. Nearly 80 per cent of the payment for healthcare expenditure comes out of pockets of patients.

Further, nearly 40-70 per cent of these expenses are used for purchasing medicines. Therefore, reduction in the price of the medicines is critical to assure people’s health, and governments have the primary and critical responsibility of achieving this.
However, the pricing and mechanism of using drugs in India is enigmatic. A patients does not have the fortune of choosing either the medicines or their price. He/she ends up paying for whatever drug is prescribed by the clinician. Although clinicians have no role in deciding the price of the medicines, they do have the professional freedom to choose from among the many brands of medicines, and this they do despite the implications of the high cost on patients.

Most drug companies decide the price and rely on the distribution network to sell these medicines. More often than not, pharmacies procure branded, more expensive medicines thereby giving limited options for the patients. Thus, a vicious cycle ensues where shopkeepers stores only the frequently prescribed brand names and clinicians prescribe those medicines frequently advocated by medical representatives to them.

As a result, we see enormous price variation between the procurement price and the retail price. Sometimes, the price varies between 10-30 per cent on frequently prescribed medicines to 1,000-4,000 per cent on some rarely prescribed medicines. This is a serious dereliction and violation of human rights and eventually leads to misery for many.

Given such complexity on the supply side, the blind trust of patients on the system of distribution results in disproportionate use, hitting the vulnerable section of the society worst. In order to address this, the government brought nearly 348 medicines under price control. Unfortunately and surprisingly, the current administration excluded many essential medicines from the price control without taking serious note of such an unscrupulous exclusion.

As a result, the All India Drug Action Network petitioned the Supreme Court to intervene and order strict implementation of drug price control on essential/ lifesaving medicines. However, the Supreme Court directed the petitioner to make a representation before the Ministry of Health, Department of Pharmaceuticals, and Ministry of Chemicals and Fertilisers.

There is a pressing need to create awareness among various stakeholders such as clinicians, patients, civil society members and the media about drug prices. Generally, the cost of distribution of branded drugs is greater than 100 per cent of the manufacturing cost. But medicines that are sold without the glamour of brands and at the price of manufacturing are known as generic medicines.

Promote generic medicine
Hence, if governments strive to promote generic medicines, the cost of any medicine we buy would drop significantly. Each of the stakeholders must mount pressure on the government to ensure that doctors prescribe only generic medicines and only these are available in market. There is a need for continuous monitoring of drug price in each state and wider publicising of drug price information at regular intervals.
It is also important to let people know about the list of medicines that are under price control and their availability at government regulated prices. Policy makers should assess existing situation in each state so that spending on medicines can potentially be reduced.

It is definitely possible for the government to regulate the medicine costs while maintaining the profitability of the pharma industry. More importantly, the strict implementation and monitoring of price control of medicines could address the problems faced by millions, especially over life saving drugs.

The erstwhile Planning Commission of India had constituted a high level expert group on universal health coverage to recommend a plan for protecting and promoting accessible healthcare services to all the citizens. Based on its recommendations, the Central government initiated a National Pharmaceutical Pricing Policy.

Unfortunately, there has been a serious delay in its implementation. Putting to action the recommendations of the expert panel will go a long way in protecting the health of Indians. The government should, at the earliest, address the laxity in regulating the prices of medicines, which can be implemented well within the ambit of the pharmaceutical policy of 2012.

(The writer is Associate Professor with Indian Institute of Public Health, Bengaluru)

(Published 10 August 2015, 19:12 IST)

Follow us on