PRICING OF MEDICINES – HOW MUCH IS TOO MUCH?

about 2 months ago
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A friend was using an accuhaler for her asthma ailment. Earlier it cost her over Rs.1000 for a 250 mg medication. Then under one swiping stroke of the NPPA (National Pharmaceutical Pricing Authority), the price was cut by 50% and it is now available at Rs.500. Obviously, it brought her a great joy and we all did a quick “hip, hip, hurray!” for the NPPA.

On the other hand, a senior citizen is harried because her medication for Blood Pressure which cost her Rs.250 for a strip earlier, now costs Rs.315. So she is left wondering where is the NPPA? Why isn’t it working for her?

Thus in this background, when we read about how seven Indian pharma companies are being sued by 44 states in USA for  of cartelisation and price disgorgement, we are not surprised as pharma companies have always been known to overcharge.  The complaint is that companies colluded with each other to fix prices, allocate markets and even rigged the bids for some 100 generic drugs. This happened between July 2013 and Jan 2015.

Indians living abroad, often rue about one thing – the high cost of medicines vis-à-vis the low costs in India. They all envy that we in India have something like a National Pharmaceutical Pricing Authority’s (NPPA), which regulates and controls price of essential or life-saving drugs. But for the NPPA, India would have been a free-for-all kind of country where getting basic medicines too would have been a killer. And even in India, like USA, getting cheap medical aid would have been a huge election issue.

But in India, the autonomy of the NPPA is also under threat. The Govt t has formed a committee - Standing Committee on Affordable Medicines and Health Products (SCAMHP). Now this new body, housed under NITI Aayog will recommend to NPPA, regarding prices of drugs and health products. One more autonomous body whose power is to soon be diluted.

This need for the Govt to wrest control from the NPPA has come after former NPPA Chairman, Bhupendra Singh created a furor by bringing down prices of stents by 85% at Rs.7260. Before this, the pharma companies made merry by charging Rs.45,000 for bare metal stents and drug-eluting stents for Rs1.21 lakh.

Regarding these seven drug firms, if it is indeed proven and companies are found guilty of inflating prices, a huge penalty could be levied. Credit Suisse, in its report has said that Indian companies could be imposed a penalty of almost three times their revenue earned. And as they are being sued in USA, individual civil recoveries could go up to another three times amount of damages suffered.  Lupin, Glenmark Pharma, Taro (unit of Sun Pharma), Cadilla Healthcare, Aurobindo, Zydus and Wockhardt are the seven Indian companies in the fray.

As expected, the companies are non-committal, almost unperturbed, like as though this is business-as-usual.

But it really brings the question back to the fore – how much profit should a drug company make? Given the kind of investment drug companies make in inventing new drugs and patenting, they do deserve a profit. But how much? Is it ethical to squeeze needy patients for as much as it wants? For drug  companies, health care is  not at all a noble art; in fact we see the attitude in many doctors where every patient is a cash cow only, health be damned – bigger the disease, more is the money to be earned.

Much more transparency is needed in the way in which drug companies charge. But will that ever happen?

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