Dr Arun Mitra
The Delhi government’s proposed regulations to cap the profit margin on several medicines and consumables at 50 percent from their procurement price is a welcome step. A committee on high trade margins on sale of drugs was formed by the government of India under the chairmanship of Sudhanshu Pant. It submitted its report in December 2015 and noted that some drugs were being sold at a trade margin of 1,800 percent. The committee recommended graded trade margins with maximum margin to be 50 percent. The Punjab and Haryana High Court in a judgment in March 2013 in a case Ranbaxy Laboratories Vs state of Haryana and others had observed that “before parting with the judgment, it has to be noticed that although the petitioner is allegedly selling the drug in question to the consumers at about 900 percent of the reasonable price of the drug, but there appears to be no legal provision in force to save the consumers from such naked fleecing of the consumers by the petitioner or other drug manufacturers by over-pricing the drug to such an extent. It is surprising that no remedial or ameliorating step has been taken either by State or by Union of India in this regard. The court hopes that now at least the concerned authorities shall wake up and shall take some remedial step to save the consumers from such fleecing”
As per some data collected in 2017, it was found that even for serious diseases like cancer, there is blatant loot in the trade margin. To quote a few, in the case of drugs related to cancer treatment, Bortezomib (Borviz 2mg vial) the hospital billing rate was found to be Rs.2,700 while the MRP mentioned was Rs.1,4715 i.e a profit margin of 445 percent. Similarly on Filgrastim (Neukine 300mcg PFS) the hospital price is Rs.250 and MRP is Rs.2416 i.e profit margin 866 percent. This is true for most of the anti-cancer drugs.
The purpose of generics drugs has been to supply cheap drugs to the needy. But a study of the market has shown that in some branded generic drugs the difference between the procurement price and the MRP is very high. For example, 10 tablets of Rabeprazole by Abbot have MRP marked Rs. 59.30 while the procurement price is Rs. 10.00 only. This means a profit margin of 490 percent. Tab. Olipil H (used to control blood pressure) by Psychotropics India Ltd. is procured at a price of Rs. 18.00 for ten tablets while the MRP mentioned is Rs. 95.00, that is a profit margin of 427 percent. Tab. L-Lordizin M by Zeneka Health Care Ltd. has MRP 164.00 for 10 tablets while the procurement price is 20.00, profit is that is 720 percent. This belies the very purpose of supply of low cost drugs.
Public health activists have raised the issue of drug pricing several times with the PMO, Ministry of Health and Family Welfare and the Ministry of Petroleum, Chemicals & Fertilizers. Last February the prices of coronary stents were reduced after the court passed an order on a PIL filed by advocate Birender Sangwan in 2015. Initially, the government did not respond to an order by the high court to bring stents the under National List of Essential Medicines (NLEM) and cap their prices. It was only after a contempt petition in July 2016 that the government relented. He filed another petition in December 2016 to ensure the government decided to cap selling price of stents.
The National Pharmaceutical Pricing Authority (NPPA), then headed by Bhupendra Singh, held several meetings with various stake holders, including the manufacturers, the importers, the traders and the civil society activists. After several rounds of deliberations the NPPA took the decision to bring down the prices of coronary stents substantially in February 2017. At that time there was sincere hope that more steps will be taken and all drugs will soon be brought under price control. The control of coronary stent prices gave some respite to the patients. But in the absence of any monitoring mechanism the private hospitals increased their procedure charges. The government did not take any serious action on this. The NPPA had again called a meeting on 5th February 2018 to review the price of coronary stents. It decided to stick to its previous decision. It is pertinent to note that the chairman of NPPA was transferred very soon afterwards.
It is high time the government took serious note of the drug pricing issue. In fact, any chemical which is termed as medicine should be in the list of essential medicines and be brought under price control. Medicine is not one’s choice but a compulsion. It is the government’s duty to see that each citizen gets quality health care. Drugs constitute nearly 67 percent of the out of pocket expenditure incurred by the patient on healthcare. The government’s silence on the issue raises skepticism. (IPA Service)
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