Events & Issues
New Delhi, 15 October 2012
Free Medicines
NEED FOR HOLISTIC APPROACH
By Dhurjati Mukherjee
It’s too
good to be true. Early this month, the Union Health Ministry reiterated its
decision to provide free medicines to all patients attending Government health
facilities across the country. Indeed, it is a significant move to help the poor
and the economically weaker sections. For it has been found that purchase of
drugs alone accounts for 72 per cent of out-of- pocket expenditure.
However,
the financial allocation for this scheme is around Rs 3500 crores for 2012-13
and the entire programme is estimated to cost Rs 28,560 crores over the 12th Plan
period. At present, the public sector provides health care to 22 per cent of
the country’s people and, this according to the Health Ministry is expected to
go up to 52 per cent by 2017.
Medicines
would be provided free from 1.6 lakh sub centres, 23,000 primary health centres
(PHCs), 5000 community health centres (CHCs) and 640 district hospitals.
However, the Government would need to ensure that there is the requisite
infrastructure to store these medicines in remote areas. There would, thus, be
the need to set up state-of-the-art warehouses at the district level, from
where the drugs could be dispatched to the PHCs and CHCs.
The
Ministry has sent the National List of Essential Medicines (NLEM) 2011 – 348
drugs which include AIDS, analgesics, anti-ulcers, anti-psychotic, sedatives,
anesthetic agents, steroids and anti-platelet medicines – to all States to use
as a reference. Its State counterparts have been asked to create their own essential
drug list keeping in mind the disease that is most prevalent in their region.
Additionally, they have been advised to procure drugs directly from the
manufacturer or importer through an open tender basis. Importantly, 75 per cent
cost of the scheme for providing free medicines would be borne by the Centre
while the rest will be the responsibility of the States.
Obviously
this scheme and understanding is crucial as drug prices have increased
exorbitantly. A
Planning Commission panel has noted that there was nearly a 40 per cent rise in
all drug prices between 1996 and 2006. It found that during the same period the
price of controlled drugs rose by 0.02 per cent whereas those on the Essential
Drug List (EDG) increased by 15 per cent. And, that the price of drugs that
were neither under price control nor under EDL grew by 137 per cent! The panel
was of the firm opinion that all drugs in the NLEM should be brought under
price control since the cost of medicines constitutes over 60 per cent of the
total cost of health care.
Accordingly,
an estimate is that the price control on NLEM will have an impact of Rs
1100-1200 crores on companies. The earlier view that the policy may cause
significant losses to companies with price control now stands negated. However,
large companies and MNCs may take a three to four per cent hit on their sales
since they have a large number of premium priced products. However, global
drug manufacturers feel that the proposal to have the same pricing criteria for
imported drugs is unfair as the cost of production outside India is
higher.
Meanwhile,
it has been a good year for the domestic market which is growing at a steady
rate of over 15 per cent. Revenues from domestic drug market and exports have
clocked Rs 52,000 crores though challenges in the export market from
interpretation of the intellectual property norms cannot be ruled out. At the
same time, quality may continue to haunt the Indian drug manufacturers with the
past year seeing concerns raised by the United States regulator on drugs
from forms including Ranbaxy and Lupin. It is generally agreed that quality is
the single most important factor that needs attention of the domestic pharma
market.
A recent
study on drug pricing by the Ministry of Corporate Affairs revealed that profit
margins on 21 common drugs manufactured by Indian companies have escalated
significantly, obviously because of rising prices. Though pricing regulations
of the National Pharmaceutical Pricing Authority (NPPA) say that companies can
keep a profit margin of maximum of 100 per cent over the cost of production
(COP) of a drug, mark-ups of 200 to 500 per cent were found to be very common
with the highest margin being 1122 per cent (for a drug manufactured by
GlaxoSmithKline).
The study
compared the mark-up of some of the highest selling brands of various
formulations. For example, for anti-hypertensive drug Amplodipin (strip
size 2.5 mg x 10) the mark-up over COP was found to range from 452 per cent to Amlong produced
by Micro Labs to 589 per cent. For the 10 x 10 mg strips the range of mark-up
was from 630 per cent for Amlogard produced by Pfizer to 1078 per
cent for Amlong produced by Micro
Labs. Even for anti-diabetic drugs, the range is 231 per cent (Glycomer) to around 652 per cent (Glyciphage).
This
proves the validity of the recent criticism of the proposed pharmaceutical
policy which seeks to put a ceiling on drug prices at the average of costs of
the three top selling brands. The study endorses that view and it is generally
agreed that the debate over the pharma policy prompted this survey. The study
clearly mentioned how unaffordable drugs were priced because of high mark-ups,
limiting access to health care of a major section of the population. It further
stated the need for the Government to “strictly ensure that all drugs are
affordable prices”.
Meanwhile,
a report pertaining to a study carried out in the national capital, Delhi, showed a
disturbing trend that antibiotic resistance has been found to rise by 40 to 97
per cent with increased prescription of drugs. Unfortunately, it has been seen
that there is an increased tendency among doctors to prescribe antibiotic drugs
for minor ailments – primarily because of the pressure from pharma companies as
also the reluctance of patients to give the requisite minimum time for drugs to
cure.
In the
study, doctors were able to establish a direct co-relation between introduction
of antibiotics and the resistance developed by the bacteria against them. And,
recommended that while there is an urgent need to detect isolates at an early
stage, it is also necessary that drugs, especially antibiotics, are prescribed
judiciously.
While the
Government will do well in providing the free medicines to the poor, it must
make an endevour to ensure that drugs are made available to all sections of the
population at affordable prices. Moreover, it should insist on an advisory to
doctors that the tendency of quickly prescribing medicines and vitamins – most
of which are uncalled for – has to be done away with. Only if there is a
holistic approach can the Union Health Ministry get kudos.—INFA
(Copyright, India
News and Feature Alliance)
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