Govt to blame for high drug prices? (Editorial)

  • 14/05/2008

  • Free Press Journal (Mumbai)

Who is interested in controlling spiraling drug prices or, for that matter, the skyrocketing healthcare costs? Both are interconnected although healthcare means a total package, of which drugs and pharmaceuticals form an important integral part. For medical treatment, which does not require hospitalization, the cost of drugs often takes a lion's share of the total expenditure incurred by a patient. In the case of surgical intervention, the other costs, including surgeon's fees, expenses on various tests, nursing and hospitalization, etc., could be equally overbearing on a patient's pocket. In a country where over 30 per cent people live below the poverty line and another 30 per cent live in poverty, a large majority of the population is finding increasingly difficult to meet the rising costs of healthcare, especially those of drugs. The prices of all emergency and life saving drugs have sharply increased over the last five years. Unlike most other manufacturing industries, high prices of so-called high potency drugs are not so much because of their high input or production costs as the post-manufacturing expenses (PME) such as very high trade margins and market promotion at individual and institutional levels with specialist physicians, drug administrators, etc. since advertisement of prescription drugs is universally banned. A seemingly unfair trade practice by pharmaceutical companies is primarily responsible for the recent shooting up of the prices of those high potency life saving drugs or new generation medicines which have been decontrolled by the government to encourage drug manufacturers to increase their production and availability. Greedy drug companies are taking a full advantage of the current policy of the government.. And, the victims are invariably the country's 70 per cent economically unfortunate population who find the so-called new drugs and combination drugs simply unaffordable. The policy has also encouraged a thriving business of spurious drugs especially in the semi-urban and rural markets killing poor helpless patients in hordes like pests. If any body is to be blamed for this situation, it is the government and none else. The discipling of the drug industry has proved to be one of the most difficult tasks before the successive governments at the Centre ever since the late Mrs. Indira Gandhi introduced a slew of measures in the early 1970s to check a cartel-like operation by some 30-odd manufacturers, mostly multi-national corporations (MNC), under the banner of the Organisation of Pharmaceutical Producers of India (OPPI). The measures included the preparation of a list of life saving drugs, the introduction of a strict drug price control regimen, forcing MNCs to manufacture basic drugs in India or face compulsory dilution of their foreign equity control, the setting up of the Hathi Committee, emphasizing on selling drugs in generic names instead of brand names, the manufacturing of basic drugs and antibiotics in the public sector, encouraging domestic pharmaceutical producers to take up research and development of new drugs, etc. Not all these measures succeeded in yielding the desired results. The experiment with public sector undertakings such as Indian Drugs & Pharmaceuticals Limited (IDPL) and Hindustan Antibiotics proved to be a failure while many private sector enterprises took full advantage of the protective environment provided by the government to promote the domestic sector. Over the years, a whole lot of new players like Ranbaxy, Cipla, Dr. Reddy's, Biocon, Cadila, Aurobindo, Sun Pharma, Ipca, Lupin, Glenmark, Zandu and Dabur made a strong presence in the market taking on such mighty multi-national majors as GlaxoSmithKline, Pfizer, Astrazeneca, Aventis and Wyeth. However, for reasons best known to the UPA government and its strong pro-industry minister in charge of the department of drugs and pharmaceuticals along with other non-related portfolios such as fertilizers, petrochemicals, chemicals and steel, Ramvilas Paswan, the leash on drug prices was loosened to give drug manufacturers almost a free hand in fixing 'minimum retail price' (MRP) of wide-ranging drug formulations making a mockery of the government's time-tested drug price control order (DPCO). Worse-still, the industry was allowed to easily escape the DPCO by introducing variants of those specified drugs which are under price control. Trade margins and promotional expenses which are inbuilt in MRP were sharply jacked up. Although the matter was brought to the notice of the union government by state agencies of Rajasthan and Tamil Nadu nearly two years ago giving specific details of unbelievably high trade margins being charged by drug manufacturers for certain emergency medicines to treat a number of common diseases, neither Ramvilas Paswan nor the health minister, Ambumani Ramadoss, took these reports seriously enough to take a concerted action involving all concerned ministries and government departments, including the states, to check profiteering by drug companies. Even reports in specialist medical journals and the media had little impact on the government. One of the latest such reports specifically named drug majors such as Ranbaxy, Dr. Reddy's, Cipla and Zydus Cadila of withdrawing or reducing supplies of popular brands of asthma drug, theophylline. This is to promote a series of very high priced brands based on a theophylline derivative called doxophylline which cost 20 to 25 times more than the older theophylline-based drugs. According to a study by well-known medical journal, Monthly Index of Medical Specialities (MIMS), popular and effective medicines such as Zydus Cadila's Deriphyllin, GlaxoSmithKline's Theo-Pa, Wockhardt's Phylobid and Cipla's Theo-Asthalin have disappeared from the shelves of most retail chemists. This is because manufacturers are no longer interested in selling these Theophylline based drugs which are under price control and thus less profitable, points out the MIMS study. Many practicing physicians feel that the Theophylline-based Asthma drugs have better compliance report. There are over two million chronic asthma patients in the country. A good number of them are workers in steel mills, cement factories, chemicals and petrochemicals units. Dust, air pollution and high humidity conditions are a common cause of Asthma. Now that the matter has reached a scandalous proportion with the public ire against the government increasing across the country, the government is thinking of strengthening the hands of the regulatory agency, the National Pharmaceutical Pricing Authority (NPPA), to check on annual price increases and price violations and penalize companies for charging 'unfair' margins. The Left parties have also started voicing their concern over the rising drug prices and fat profits being made by pharma majors. Lately, they are pushing the government to get into the core of the issue to stop exploitation of consumers by drug barons. A Marxist MP, Dr Sujan Chakraborty, has suggested that a stand alone ministry or department of drugs and pharmaceuticals be created in the government on the lines of the information technology (IT) to ensure better administration of this vital sector which concerns the entire population. But, all these appear to be rather too little, too late. Nothing radical is expected from a going government in an election year. The common man's concern has rarely troubled the constituents of the UPA government, to whom wealth care of the rich and the aspiring seems to occupy a much higher priority than public health care.