Drug price debate; Don't cow down to pharma pressure, activists tell govt

Several civil society groups working in the public health sector have asked the Union government not to cow down to the pressure of the pharmaceutical industry regarding its progressive steps to cap the pricing of essential and lifesaving medicines.

The first of the government steps was a Drug Prices Control Order in 2013 (DPCO 2013) that brought 348 medicines under an essential list, followed by another order in July this year that released a new set of price notifications for 50 cardio vascular and diabetes medicines.

Contrary to the industry claims, the notifications will have only a marginal impact on the retail market which far outweighs the benefits to people, the civil society groups said.

The National List of Essential Medicines (NLEM), as per the earlier notification, excluded several dosage forms and strengths. Therefore, the recent notifications were necessary to cover more of the strengths of medicines than that are listed in the NLEM. In addition, the notifications also covered medicines in the cardiovascular and diabetes therapeutic categories that are not included in the NLEM.

The latest step in July, to cap the the prices of formulations involving essential and lifesaving medicines that fall outside the NLEM is the first step towards the institution of a robust, pro-public health policy of drug price control, say public health activists. “This is an action that truly interprets the spirit of the Drug Prices Control Order, and its underlying legislation the Essential Commodities Act, 1955,” they say. In the past, despite its attention being drawn to the profiteering in medicines not listed in the DPCO, the government had looked the other way.

The pharmaceutical Industry, meanwhile, has been trying to block the government’s initiative by filing petitions in the high courts in Mumbai and Delhi. The industry has challenged the legality of fixing the prices of the 50 medicines under Paragraph 19 of the DPCO 2013 when the Government has in successive drug price control orders always retained the power to intervene in prices in public interest.

The civil society organisations wanted more drugs to be brought under the NLEM. “Limiting all price regulation only to a list of 348 medicines and specified dosages and strengths in the DPCO 2013 goes against the policy objective of making medicines affordable to the public. The NLEM is not the basis for production, promotion and prescription in India. In reality, the most frequently prescribed and consumed medicines are not listed in the NLEM,” they said.

Countering the industry’s claims that the decontrol of prices will cause an annual loss of revenues of over Rs.600 crores, activists note that NPPA’s action on the market will be marginal. It will affect only those brands that were selling at very high prices.

“We have analysed the impact of the notifications and found that the retail market of Rs.77,526 crores (Moving Annual Total, June 2014) would experience a loss of Rs. 350 crores (AIOCD-AWACS, PharmaTrac Data, 2014). This represents a loss of approximately only 2 per cent (Rs112 crore) in the anti-diabetic therapy segment and 2.5 per cent (Rs238 crore) in the cardiac therapy segment. This in a way establishes the excess profits of the industry in those particular formulations by overcharging the patients,” the organisations said.

There are also criticisms that the market based price fixation being followed by the government, which is a departure from the long used cost-based price control mechanism, is irrational since the ceiling prices are still very high. Many medicines are sold by reputed companies much below the ceiling price. For instance, the ceiling price of atorvastatin 40mg is Rs22.02 per tablet, while Biochem Pharmaceuticals is selling the same at a much lower price of Rs14.94 per tablet. The ceiling price of glimepiride 3mg is Rs10 per tablet, while Ipca Laboratories has been able to sell it for Rs6.90 per tablet.

“As per our calculations, only a little over one fourth of packs selling on the market will need to revise their prices downwards because they were originally priced higher than the notified price.This is evidence that there is a scope for significant reduction in ceiling prices, without affecting the reasonable profits of the industry.”

It has also been pointed that the notifications have not included fixed dose combinations in the cardiovascular and diabetes therapeutic categories, whereas the sales of many combinations exceed those of the single molecule medicines.

The organisations that raised the issue with the government were All India Drug Action Network (AIDAN), Jan Swasthya Abhiyan, Low Cost Standard Therapeutics (LOCOST), Medico Friends Circle, Third World Network- India, All India Peoples Science Network (AIPSN) and National Working Group on Patent Laws.

(EOM)