Events & Issues

New Delhi, 3 May, 2017

Cheap Generic Drugs

VITAL TO TACKLE DISEASES

By Dr. Oishee Mukherjee

The Government’s bold decision recently whereby doctors have to write the generic names of drugs and the Medical Council of India (MCI) issuing a circular to all medical college principals, hospital directors, State medical councils and health secretaries avowing any doctor violating these provisions could face “suitable disciplinary action”.

Importantly, Prime Minister Modi made plain legal arrangements would be made to make prescription of generic medicines compulsory, given that though mandatory doctors are not following it.  Notwithstanding the MCI ethics code which made this compulsory for doctors October last.

Shockingly, pharmaceutical companies were bribing doctors to prescribe their high cost drugs as the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) to prevent such unethical practices, has been hanging fire for two years.

Also, there is a need to reduce generic drugs prices as an Indian Journal of Pharmacology study found that though generic variants were less expensive than branded ones, the retail margin on these was much higher -- sometimes more than 1000 per cent of the manufacturer’s price!

While this move would help the poor and economically weaker sections get relatively low-cost generic drugs, the Government’s plans to overhaul the drug policy and ease regulatory framework impacting access to affordable medicines. Already, the existing price control system has been watered down, obviously due to pressure from the industry. Bluntly, essential drugs have to be made available to the poorer sections at affordable prices.   

Public health experts aver that diluting price controls on essential medicines would mean ignoring high out-of-pocket spending on medicines that would impact the common man. Wherein, delinking essential medicines from price regulation would result in prices surging of commonly used drugs. In rural India, around 70 per cent of out-of-pocket expenses are on medicines while it is 60 per cent in urban areas.   

Obviously, the move towards dismantling price controls on essential medicines and winding up the National Pharmaceutical Pricing Authority (NPPA) are being done at the behest of industry lobbies under the pretext of removing regulatory controls or the ‘ease of doing business’ in India.

Currently prices of over 400 essential medicines are capped by the Government whereas on all other medicines companies are allowed to hike prices by only 10 per cent annually. But, even with this control most pharmaceutical firms including multi-nationals make huge profits.

Every year the profitability of pharma companies goes up as the sector is considered quite lucrative. Moreover in a country with a huge population and living standards unsatisfactory, there is a great demand for medicines which is expected to increase in the coming years.    

Although a section feels that stringent regulation is hampering growth of the country’s drug manufacturing industry, which incidentally is one of the largest export revenue churner for the Government, this is not the case. Except for control on few drugs, which may not exceed 20 per cent, the pharma sector has no rigid regulation resulting in this industry being currently pegged at over Rs 1 lakh crores.

Meanwhile the Government recently announced slashing of prices of 43 essential drugs by up to 35 per cent, a move expected to benefit patients suffering from several critical diseases. The NPPA reduced prices in drugs that are used in treatment of diabetes, cancer, asthma, cardio-vascular diseases, mental disorders and kidney failure.

However, medicine brands with an MRP lower than the ceiling cannot upwardly revise their prices. In fact, since March the NPPA fixed prices of 540 essential medicines resulting in a saving of around Rs 3400 crores, according to Government sources. 

Given that demand for medicines is increasing at a fast pace and to ensure profitability would not be affected, price control needs to be regulated. This is all the more necessary to ensure that the weaker sections are able to buy drugs needed for their treatment.

A recent Brookings India study revealed that the percentage of persons impoverished by health expenses (during 2004-14) remained unchanged at 7 per cent meant a huge increase in the number of households (from about 77 million in 2004 to over 88 million in 2014 due to population rise). It’s akin to a population larger than Germany being pushed into poverty because of health expenses.  Pertinently, Health Minister Nadda informed Parliament recently that as per NSSO Health & Morbidity Survey data analysis in 2014 “about 23.66 per cent rural households faced catastrophic expenditures”.

Another example of the Government’s commitment to set up a single window approval system which will clear in 30 days --- what four different committees took 3-4 years --- is a major boost to innovation in medical research of India’s sagging reputation in the area of ease of doing business.

Niti Aayog has already written to the Health Ministry to restructure the approval process for innovation in medical research as part of the Government’s move to make the country a hub for manufacturing. 

Undoubtedly, the main challenge before the Government is to ensure health care which includes affordable medicines to poorer sections. Indeed, the question of increasing manufacturing is important but the main objective of this exercise has to be to ensure that masses are able to get necessary health care and buy the prescribed medicines.

Unless people across the country are able to get access to drugs -- and not see family members dying due to high cost of medicines, the Government’s whole exercise be it pharma research or has no meaning. The benefits of innovation have to reach the grassroots.

Besides, there is need to evolve an action plan which should be formulated by a national committee comprising industry representatives, doctors, economists and social activists to delve deep into the question of drug pricing and whether regulation is at all needed.

Furthermore, the question of how medicines at low cost can be given to people not just below the poverty line but also those from economically weaker sections has to be examined by the committee.  True, the Administration has taken bold steps but to achieve the objective of ‘health for all’.

But it needs to keep a check on the profitability of pharma companies and their unethical practices. This is all the more necessary as all facilities like various subsidies (if units are set-up in select areas) are still in vogue and may be continued. 

In sum, health is a big challenge before the Government. According to the World Health Organization the massive economic burden of non communicable diseases is estimated at nearly $6.2 trillion between 2012-2030. Noticeably to tackle this problem, apart from increasing the percentage expenditure of GDP on health care from the current 1.1 per cent to at least 2.5-3 per cent by 2025, drug availability at affordable prices is imperative at this juncture. ---- INFA

(Copyright, India News and Feature Alliance)