A regulatory Mechanism is needed to control the price of Medicines
By Dr Arun Mitra
The latest notification of the Board of Ethics of the National Medical Commission (NMC) has asked the doctors to prescribe medicines with pharmacological names. Earlier too The Indian Medical Council (Professional Conduct, Etiquette & Ethics) Regulations, 2002, clause 1.5 mentioned use of Generic names of drugs. ‐ “Every physician should, as far as possible, prescribe drugs with generic names and he/she shall ensure that there is a rational prescription and use of drugs”. But the difference is that the NMC notification has warned punitive action including fine even cancellation of license.
This has generated debate among the medical professionals. It has been a long standing demand of the public health activists that medicines should be prescribed with their pharmacological names. This will exclude the branded drugs and bring down the cost.
The concept of generic medicines arose because the branded medicines had high cost.
The Pharmaceutical companies spend huge amount of money for promotion of their products. The high cost of drugs seriously affects the healthcare of our population. As nearly 67% of out of pocket health expenditure in our country is on drugs. High out of pocket expenditure pushes 6.3 crore population below poverty line every year, a fact admitted in the National Health Policy document 2017. On the other hand the generic drugs are non-branded so they save the money used in promotional activities.
Having sensed this, our first Prime Minister Jawahar Lal Nehru took initiative to produce the drugs in the public sector with the purpose to produce cheap bulk drugs. While inaugurating the Indian Drugs and Pharmaceuticals Ltd. (IDPL) in 1961 he said “the drug industry must be in the public sector….. I think an industry of the nature of the drug industry should not be in the private sector anyhow. There are far too much exploitation of the public in this industry”.
With this vision, Public Sector Unit Indian Drugs and Pharmaceuticals Ltd. (IDPL) was incorporated in April, 1961. IDPL played a pioneering infra-structural role in the growth of Indian Drug Industry base and produced cheap bulk drugs. It played a major role in the strategic National Health Programmes like Family Welfare Programme & Population Control (Mala-D & Mala-N) anti-malarial (Chloroquine) and prevention of dehydration (ORS) by providing quality medicines. Similarly the Hindustan Antibiotics Ltd (HAL), Central Research Institute (CRI) Kasauli were founded.
In addition to the actual generic drugs which are produced and sold solely by the pharmacological name, several companies have come out with brand names of low cost product; they are branded generics. They are cheaper than the branded drugs but more expensive than the actual bulk non branded generic drugs.
One of the contention of those opposing this is that the Generic drugs are low in quality. It is therefore important that these drugs should meet the criteria of bio-equivalence and efficacy. These criteria need to be regulated by the competent authorities in a similar way as for the branded drugs.
To make doctors prescribe only the Generic names it is important that the branded drugs have to be banned. Otherwise doctors will write generic names but the patients will be left to the mercy of the chemists who will give the brand of his choice. This will obviously be the one which has high profit margin.
To check the high trade margins, a committee was formed to look into High Trade Margins in the Sale of Drugs on 16 September 2015. This committee took serious note of the excess trade margins. They pointed out that in some cases the trade margin is as high as 5000%. This committee submitted its report on 9 December 2015. But it is now almost 8 years that the government has been sleeping over it.
There has to be evolved a method to calculate the cost of drugs. It is important that the cost of the drugs be calculated as per the cost of production with a defined trade margin.
There is a big flaw in the price of the many generic drugs. The difference between the Maximum Retail Price (MRP) and the actual purchase price of the drug is exorbitant. This has to be corrected.
To curtail the profit margin in the drugs, a powerful regulatory mechanism has to be made. The public sector units which produced cheap drugs should be encouraged. It is sad to note that the government has been pushing the drug production in the private sector. The public sector units like the IDPL have been made virtually non-functional. The Union Cabinet's recommendation in its meeting on 28th December 2016 to close down and sell the pharmaceutical PSUs is a big blow to the concept of the state ensuring affordable, and possibly free-of-cost, medicines for millions. (IPA Service)
