Drug price Control - Justified Or Not?

Drug price Control - Justified Or Not?

As per the Drugs Price Control Order mentioned in paragraph 19, Indian government can control the prices of drugs when they become extremely exploitative. Following the same rule, government has capped and cut the prices of many of cardiovascular drugs and anti-diabetes medicine in last some year. These medicines have not been a part of the 652 drugs mentioned earlier. Going ahead, the government has again taken a stringent action and has regulated prices of more than 100 drugs in this week. The pharma industry is against the move as it they fear that it is leading to the nationalization of pharma industry. So are there fears legitimate or they are just exaggerating it? Is the recent drug price control justified?

Yes

• The drug pricing is made as per the set criteria and the government has every right to expand the list to improve affordability.

• The government controls only those drugs that are considered as life saving and don’t have any generic substitutes in market.

• The Supreme Court has made it clear that they have an appropriate criterion that is followed strictly to keep prices under control.

• The objective is also to control the pharmaceutical companies who go for higher pricing just to sell their drugs outside India.

• Even if this move is termed as nationalization of pharma industry, it is ok, because it is the responsibility of government to keep health of citizens as their top priority.

• Intentionally the physicians prescribe the patients the expensive drugs that have to be kept in check.

• The prices of generic drugs available in the India might be cheaper as compared to the international markets but still are considered expensive as per the Indian market.

No

• The price control of more than 100 drugs is going to hit the profit margins of top pharmaceutical firms including Abbott Laboratories, Sanofi SA and Ranbaxy. There companies also export their drugs.

• Talking about the prices of generic drugs sold in India, they are already very low as compared to the international markets.

• The pharma company’s fears are legitimate as the decisions are taken by the government without any consultations with the major stakeholders.

• The market has got enough mechanisms to reach to a fair price. There are almost 50-60 brands available of every drug, and so patient has the flexibility to buy a drug of 1 Rs or 1000 Rs.

• NPPA made the changes in the price control methodology and made the base as market pricing instead of cost base.

• The companies have got higher R&D costs, sales cost, promotional costs etc that have to be fulfilled at any cost.

• It is a general rule in every sector that a firm can create a brand premium if it can control it. So, it is on the market to decide they want to pay the price or not.

Conclusion

If you see from one side you will find that there is actually no need for drug price control in India. There are already so many competitive forces that allow the market to sell both premium as well as generic drugs. So even if the doctor prescribes the expensive branded drug, the patient has option to ask for substitute generic drug at pharmacy. But then on the other side, India has got a huge percentage of population that finds it tough to meet the medical costs. And, therefore it becomes responsibility of the government to opt for the drug price control. However, it should be done in a planned way with a proper discussion with the industry so that no one feels the heat.