MP joins drug price chorus

Read more below

  • Published 19.05.12

New Delhi, May 18: A Congress MP today joined public health groups in demanding that all medicines marketed in India be put under price control and proposed novel audit mechanisms to keep a check on drug prices.

“There appears to be no effective way to keep (drug) prices and profits at reasonable levels except by bringing all drugs under price regulation,” Nagaur MP Jyoti Mirdha told a group of ministers (GoM) meeting on a policy for pharmaceuticals pricing.

Mirdha said the National Pharmaceutical Pricing Policy (NPPP) 2011 had suggested price controls on 348 of nearly 900 drug molecules and had thus left the door open for companies to shift from regulated to unregulated drugs. The NPPP was prepared by the pharmaceuticals department, which falls under the chemicals and fertilisers ministry.

India’s health ministry had opposed NPPP 2011, echoing concerns expressed by health activists that it would legitimise price rise and allow manufacturers to migrate from drug molecules under price control to those outside control. The proposed policy has been all but rejected under such staunch opposition.

Mirdha told the GoM the government should determine an effective “non-intrusive, innovative audit” mechanism and grant drug manufacturers a liberal maximum allowable post-manufacturing expenses (MAPE) of up to 300 per cent.

The current drug pricing policy covers 74 drugs on which companies are allowed a MAPE of 100 per cent. Mirdha said costing data show that price control on all drugs coupled with a 300 per cent MAPE would allow manufacturers to make handsome profits.

“I think this is a new idea that needs to be explored,” said Chandra Gulhati, a pharmacology specialist and the editor of the Monthly Index of Medical Specialities, India, an independent journal of drugs.

“It could pave the way for auditing based on some level of self-certification based on documentation — just as the income-tax department works,” he said.

Mirdha and drug industry analysts such as Gulhati have warned that any partial control of drug prices would prompt companies to shift to making medicines without price controls. Under the existing price control regime, many manufacturers have changed the ingredients of their medicines so that they can sell them at unregulated prices.

One drug company has changed the ingredient of a drug from ranitidine to omeprazole (both used in treating excess stomach acid), and raised its price from 60 paise to Rs 1.45 per tablet.

Another company has changed a combination of norfloxacin and metronidazole to a combination of ofloxacin and ornidazole (both are a combination of an antibiotic and an anti-protozoan agent) and raised the price from Rs 20 to Rs 79.50.

The GoM, led by agriculture minister Sharad Pawar, heard presentations from sections of the public health community and health activists today, after hearing the pharmaceutical industry and trade representatives on May 14.

The All India Drug Action Network, a national consortium of health activists campaigning for a rational drug policy, told the GoM that price control should be imposed on all essential drugs.

The consortium said the formula to cap the price of a drug by calculating the weighted average price of the top three brands of the drug, as proposed in NPPP 2011, was “illogical and unscientific” and should be abandoned.

The consortium said price regulation should be based on the cost of production and take into account the prices at which the government procures drugs from pharmaceutical companies that make profits, although selling at prices lower than market prices of other brands.