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Pencils are out and furious calculations underway to plot the impact of the proposed price-cap on 348 essential drugs. And while consumers, reeling under increasing prices on household items, hope for relief on their medical bills – that is still a while away.
The drug pricing proposal approved in last week’s meeting of the Group of Ministers still needs the “go ahead” from the Cabinet and the Supreme Court – under whose directions the issue got the traction and attention it needed.
The ministerial group had proposed that prices on drugs in the National List of Essential Medicines be capped. And the formula approved was at the average price of all brands with over one per cent market-share in a particular therapeutic category.
Though the pharmaceutical industry expects significant price-cuts on medicines (estimated between 11 and 75 per cent, in some cases) if the proposal goes through – health advocacy groups are not quite convinced. There will be some price-reduction on medicines across segments, admit representatives with different groups. But whether it will be a meaningful reduction, is another question, they point out.
In chest-pain and hypertension drug Atenolol or cholesterol drug Atorvastatin, the price reduction per tablet may be less than Re 1, observes S. Srinivasan, with voluntary agency Locost, illustrating his point on price-reduction not being significant on drugs that sometimes need to be taken life-long.
Top brands could see some price erosion, but the policy is not about controlling the price of top brands. It is about making medicines affordable, observes Srinivasan, also with the All India Drug Action Network, a joint-petitioner on the Public Interest Litigation on medicine-prices in the Supreme Court.
Public health, private data
The difference between the market-price of medicines and the cost at which State governments procure them is steep, he observes, expressing concern at the methodology adopted to arrive at the pricing formula.
It is based on IMS data that are expensive and not in public domain, he says. In fact, the World Health Organisation had, in its response to the Department of Pharmaceuticals’ draft policy, expressed similar reservations on basing public policy on privately generated data.
Jan Swasthya Abhiyan’s Dr Amit Sengupta also points out the incongruity of using proprietary data to fix medicine prices for public health. Besides, he says, the market-price based formula to cap prices does not have any relation to the cost of producing those medicines.
Healthcare groups had suggested fixing a cap at the cost-price of medicines, with a negotiated mark-up. Drug-makers are also known to avoid price-control by tweaking their formulations, or adding another drug and making it a combination medicine – the pricing proposal is unclear on how this would be tackled, he points out.
With the industry lamenting that the latest pricing proposal costs it a year’s growth and healthcare advocacy workers having misgivings on whether consumers would indeed benefit from a significant price-cut on medicines – the stage shifts to the view the apex court will take on the policy proposal.
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