Wednesday, November 08, 2006


Medicine margin cut may not help

Ministry of chemicals and fertilisers' recent agreement with pharma industry on reduced prices of 886 formulations is being billed more of "tokenism and a farce", as it may not benefit much of the population.

The list of formulations covers only a small portion of the market, and does not include leading brands of the industry. Public health experts have pointed out that many of the formulations, and their combinations are also irrational.

Recently, minister Ram Vilas Paswan had announced with much fanfare that margins on these generic-generic drugs will be capped at 15% to wholesaler and 35% to retailer.

Though the list includes nearly 100 types of drugs across various therapeutic segments, health experts say that pharmaceutical industry is negotiating with the ministry to prevent regulation on essential drugs by offering some price concessions on its lowest selling brands.

The generic-generic segment includes only those medicines which are sold without any brand name, and thus a small portion of these are stocked by chemists, as against the branded drugs which are promoted by companies. Like, Crocin (branded) will be sold more by trade, than a lesser known Paracetamol (generic-generic).

Since doctors prescribe a brand of a particular drug to patients, and not the generic composition or formulation, reduction in prices of these generic-generic drugs seems like a wasted exercise.

Over last 12 years not a single additional drug has been brought under price control and only 74 out of nearly 750 pharmaceutical substances are under regulation.

Dr Anurag Bhargava of AIDAN (All India Drug Action Network) said, "The last decade has seen lesser commitment from the government in implementing the Indian drug regulation policy (Drug Price Control Order) despite the fact that in the last few years many essential drugs have become unaffordable and inaccessible for people."

He added that an essential drug like Albendazole which is used in the treatment of worms in children costs 35 paise per tablet when the Tamil Nadu government procures it, and Rs 14 per tablet when people buy it from their chemist & druggist shop.

Drug production in India is cost effective but the benefit never reaches the people, especially the poor. For example, the cost of production of Flucanozole 150 mg (used in opportunistic AIDS infections) is less than Rs 2 per tablet. In the market, leading brands of the same drug sell at Rs 33 to Rs 55 per tablet.

One of the biggest concerns for patient groups and health experts is the fact that the "deal" on slashing margins seems to be a knee-jerk reaction, and a trade-off for not going in for price regulation on the drugs.

In September, government took a U-turn on price control of essential drugs, which was being sent to cabinet.

Apparently, the industry had sought intervention of PMO in this issue.

Arguing that competition does not always lead to a drop in prices and most countries including US and UK, have some form of control, NGOs like AIDAN and public health experts said high trade and profit margins, branding and an inefficient price regulation mechanism lead to unaffordable medicines, which impact the patient's right to access health care.

"The problem is compounded by a looming patent system which will contribute to high prices, and in some cases unavailability of essential medicines," says Dr S Srinivasan, management trustee, LOCOST (Low Cost Standard Therapeutics), an NGO which has been active in advocacy of a people-oriented drug policy.

Government should set up a regulator, and evolve a system wherein drug prices are monitored and regulated, and ceilings are threatened in case of over-pricing, experts added.

To counter the problem often cited by Paswan about the lack of information of cost of drugs production, experts have offered a solution.

Tender prices offered by the public-sector Tamil Nadu Medical Services Corporation in its purchase order can serve a sort of benchmark for the lowest possible prices.

also see:

Links to this post:

Create a Link

<< Home

This page is powered by Blogger. Isn't yours?