The Government opened a new flank on medicine price discussions, with a recent report recommending price negotiations on patented drugs.
But the move has stirred up concern among pro-health groups, who fear that price negotiations with drug-makers could back-fire on existing public health-oriented norms in the country.
The Government report comes at a time when the Health Ministry is exploring options such as compulsory licencing for bringing down prices of life-saving patented drugs through allowing market competition by generically similar drugs, said pro-medicine access representatives, in a statement.
Even the Department of Industrial Promotion and Policy (DIPP) sounded a note of caution in its response to the committee looking into the issue. “Negotiations should be carried out with caution as the case for compulsory licence (CL) on the ground of unaffordable pricing of drugs [Section 84(b) of the Patent Act] will get diluted,” it said.
A CL allows a company to make a similar version of an innovative drug, on the payment of a royalty to the innovator. Last year, the country took a public health leap, when it issued its first CL allowing Natco to make a generic version of Bayer’s kidney cancer drug Nexavar.
At present, the Health Ministry is exploring CLs on three patented drugs.
Negotiated prices
The Committee on price negotiation for patented drugs had, in its recent report observed, that prices of patented medicines were high and even if prices were calibrated on Gross National Income with purchasing power parity, they were beyond the reach of people.
Nevertheless, it recommended that the reference price be fixed keeping in view the Gross National Income and purchasing power parity.
And for this, the countries to be referred to were those with a strong public health policy and where Government has strong bargaining power while negotiating the prices of the medicines, the panel said.
It also recommended that Government expand its healthcare and insurance scheme (at least for prescription medicines) for all citizens not covered under any insurance or reimbursement scheme.
India amended its patent regime in 2005, following which innovative products are granted 20 years of manufacturing and marketing exclusivity. The concern with medicines, though, is that such exclusivity would encourage monopolies and price the medicine beyond the reach of consumers.
The Government had kept pricing of patented drugs outside its earlier discussions on the national drug policy and price control, since it touched a raw nerve. In fact, the formula for price control on local medicines, too, is at present in the Supreme Court. And there is no system in place to control prices of imported patented drugs.