Unify pharmaceuticals pricing
There is an urgent need to introduce the ‘one drug – one name – one price’ formula and prevent unnecessary fraudulence.
Every year, 6.3 crore people in our country are pushed below the poverty line because of out of pocket expenditure on health. This fact has been admitted by the National Health Policy document 2017. Nearly 67 per cent of this expenditure is incurred on drugs. Therefore, it is important that prices of drugs are brought under control. To regulate the pharmaceutical companies, a Uniform Code of Pharmaceutical Marketing Practices (UCPMP) was prepared by the Department of Pharmaceuticals, Government of India in 2011. But, it was said to be voluntary for some time. A letter of the Ministry of Chemicals and Fertilisers, Department of Pharmaceuticals dated December 12, 2014, had mentioned that this will be voluntary for a period of six months, with effect from January 1, 2015, and will be reviewed thereafter.
The voluntary implementation of the code, however, did not yield the desired results. Pharmaceutical companies did not take any tangible steps to implement the code. Clauses 6 and 7 of the code prohibit pharma companies from giving freebies to medical professionals. But, to promote their sales, the companies have been luring medical practitioners by offering expensive gifts and even foreign travel to attend conferences, including even leisure trips for the families. This has added to the cost of drugs. But, despite several representations from their public health activists and civil society groups, the practice has not stopped. The Indian Medical Council (professional conduct, etiquette, and ethics) regulation also warns doctors against indulging in such practices to receive financial benefits in any form, including attending educational programs. Taking cognizance of the matter, the Central Board of Direct Taxes (CBDT) in its Circular No. 5/2012, dated 1-8-2012, had said that any such expenditure will not be considered for tax deductions.
The UCPMP also asks companies to adopt stipulated procedures laid down by the competent authority for involving doctors in their research projects. Several research works are not carried out in accordance with the laid down conducted. It is a common practice that the companies approach doctors to do surveys highlighting the efficacy of a particular drug. These companies then use the doctor's reference, including their photograph in their promotional literature. The UCPMP prohibits such underhand work.
It is expected that after the code is made mandatory, the prices of drugs would possibly come down. But, we have seen in the case of coronary stents that even though the stent prices have been reduced after court intervention, the benefit to the patients has not been equivalent because many health providers in the private sector soon increased their procedural charges. This needs to be monitored by comparing the charges levied before and after implementation of the code to ensure that the benefit reaches the patients. Price of the drugs should be calculated on the basis of cost accountancy. The manufacturer, stockist, and the retailer can be given a justifiable profit margin.
Law, in this case, should apply to both branded generics and branded medicines so as to remove discrepancy in the actual price and the MRP in case of branded generics, which is to the tune of 1000 per cent in some cases. In fact, there should be one drug – one name – one price formula. There should be no branded generics. The generic should imply the pharmacological name and it should be sold just like that.
All medicines should be declared essential, like any chemical once it is termed as a medicine, so that it is given on prescription only and is not reliant on a patient's choice anymore.
To achieve the objective of affordable drugs, it is pertinent that the public sector drug companies are strengthened as they have produced cheap bulk drugs for the whole world and have also effectively participated in all national health programmes.
(Dr. Arun Mitra is Senior Vice President, Indian Doctors for Peace and Development. The views expressed are strictly personal)