Paying the price

Indians may have to pay more for medicines as drug pricing policy is set for overhaul

Pharmaceutical industry will guide changes, says head of government committee.

Medicines may become more expensive in India as a result of the major overhaul of the drug pricing policy that is being planned, activists fear. The changes in the prices of medicines are being considered by a government committee set up about a month ago. "We are working with the aim of 'ease of doing business' and 'Make in India'," said health secretary CK Mishra, who heads the committee. "The new pricing policy of drugs will be in tune with this."

Mishra indicated that the demands of the pharmaceutical industry will guide the overhaul of drug pricing policy in India. "The National Pharmaceutical Pricing Authority will stay, but it can be renamed or its form might change," he said.

These discussions within the government have upset health activists working on drug pricing. "It is clear that the policy shift is geared towards one-sided promotion of the industry," said Malini Aisola from the All India Drug Action Network, a network of non-profits that are working to increase access to essential medicines. "All the gains that were made over past years in reducing prices of medicines will be reversed."

At a meeting on October 19, Mishra, NITI Aayog chief executive officer Amitabh Kant, secretary of the pharmaceutical department Jai Priye Prakash and secretary of Department of Industrial Policy & Promotion Ramesh Abhishek discussed delinking the National List of Essential Medicines from the Drug Price Control Orders. These orders are issued by the government to fix an upper limit for the prices of drugs that the government deems essential.

Activists who are the privy to the proceedings at this meeting say that the government is planning to put the independent National Pharmaceutical Pricing Authority under the Department of Pharmaceuticals so that the right to regulate drug prices is vested with the government.

The NPPA's autonomy

As it stands now, the National Pharmaceutical Pricing Authority has been an autonomous body with experts from various fields like pharmaceuticals, economics and cost accountancy. It was established through in 1997 because the government believed that the prices of bulk drugs and formulations should be simplified and fixed by experts.

Over the past seven months, the authority has fixed the ceiling prices of nearly 500 medicines. For example, Hepatitis B drug Entecavir was being sold by Bristol Myers Squibb was selling for Rs 230 per tablet of 0.05 milligrams. But the same drug, manufactured by Zydus and Cipla, was being sold at Rs 75 per tablet. In March, the authority decided that no company could sell Entecavir for more than Rs 72.98 per tablet.

The authority chairperson Bhupender Singh had said that prices of all essential medicines, of which there are nearly 350, will be fixed by the end of this year. The Drug Price Control Order was last issued in 2013.

Rush to revamp

On November 7, the various parties involved in the debate will gather in Delhi to attend a consultation called by the secretary of the department of pharmaceuticals. Participants will discuss drug pricing and industry-related schemes and issues.

Activists say that the meeting seems to have been planned to pre-empt a Supreme Court hearing on essential medicine prices due for November 9. The hearing relates to a public interest litigation filed by the All India Drug Action Network in 2008 asking the court to fix the prices of essential medicines.

The Supreme Court has consistently ruled in favour of public health programmes, said Aisola from the drug action network, but the government's new proposals will disrupt the process. "The proposed changes in policy are in violation of Supreme Court directions to ensure that all essential and life saving medicines do not fall outside price control. Price controls are a vital policy tool for bringing essential medicines closer to the reach of the most needy," she said.

Some slow progress

The movement to provide cheaper medicines has gained some ground in India over the last few years. All state governments have agreed in principle to provide essential medicines free of cost in government facilities, though only five states have actually started implementing this scheme.

Dr Narendra Gupta, secretary of Prayas, an NGO in the Rajasthan town of Chittorgarh, said that the ideal way of providing cheap medicines is through bulk procurement, mainly by the government. “We have seen that prices fall heavily when governments buy for their free medicine schemes," said Gupta, referring to the Rajasthan Medical Services Corporation Limited and the Tamil Nadu Medical Services Corporation Limited that are provide free medicines in government facilities. "In states like Tamil Nadu and Rajasthan, many medicines are procured at one-hundredth the price in market.”

An example is the drug Imatinib Mesylate used to treat leukemia. When the market price by of the multi-national corporation Novartis was more than Rs 1 lakh, the Rajasthan Medical Services Corporation procured it for Rs 1,200 from Indian generics companies. “Such huge difference is possible only by buying medicines in large quantities and through a transparent system of tenders,” said Gupta.

However, few states have such a mechanism in place. Delinking Drugs Price Control Orders and essential medicines in states that do not have a bulk procurement mechanism will dramatically increase the prices of medicines.

Until all states are able to buy drugs in bulk, price control through Drug Price Control Orders and the National Pharmaceutical Pricing Authority will be vital, he said.

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