• IASbaba
  • November 3, 2015
  • 12
All India Radio
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Government has constituted an Inter Ministerial Committee to review the Drug Price Control Order, 2013. The committee will look into the drug pricing mechanism. The Supreme Court had, earlier in this year, declared the Drug Pricing Policy as irrational and unreasonable. It also observed that the centre has been fixing the maximum price for a medicine above the retail price.

The drug pricing mechanism was termed irrational and unreasonable because:

  • The market prices of all the medicines enlisted in the control order were not collected.
  • The collected data was inadequate and sometimes faulty also.
  • There were some instances where the selling prices of certain medicines were higher than the prices of market leader for such medicines.
  • The order has not covered all the dosages of a same drug (only one or two dosages covered).
  • If a price controlled drug is combined with a non-price controlled drug, then it is out of the purview of the control order.
  • Drugs like cardiovascular drugs, anti-diabetic drugs, which are required for life-long therapy, are excluded from the control order. 108 such drugs were put under National Pharma Pricing Authority (NPPA) which controls their prices. However, all the drug manufacturers are not following the NPPA’s orders. Action has not been taken on those who are not following.

The 2013 order fixes the ceiling price of essential medicines listed in Schedule 1. No one can sell the scheduled medicines at a higher price than the one prescribed by the NPPA. However, the number of such medicines covered in the Schedule are only 14.3% of the total medicines sold in the country.

Pharma industry is a major industry in India. As per 2013 figures, the pharma industry has a:

Turn over: $25 billion, of which 60% domestic and 40% exports.

Cumulative Average Growth Rate: 14% since last 5 years of 2013.

Ranked 3rd globally in terms of volume and 14th in terms of value.

The government has launched “Jan Aushadi” stores to ensure availability of quality generic medicines at affordable prices to all.  However, there are certain lapses in the scheme. 90% of the doctors do not give prescriptions in generic names. Besides, the network connectivity of Jan Aushadi stores is poor.

Two areas where there is a lack or absence of government regulation are: Medical equipment and Diagnostics. This is one of the reasons for incurring high expenditures on health care.

  • In India, only about 35% of people have access to essential medicines, as per WHO report “World Medicine Situation
  • 60% of the out-of-pocket expenditure on health goes for buying medicines.
  • States like Tamil Nadu provide free medicines to their people. It has a very well organized procurement, distribution and quality control networks.
  • Countries like Brazil also provide free medicines.

India should also try to implement free health care to its people. The draft National Health Policy, 2015 highlights this. It proposes to raise the health expenditure to 2.5% of GDP and to ensure universal access to free drugs, diagnostics in govt. Hospitals. Health care should be made a fundamental right.

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