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Resource centre on India's rural distress
 
 

Drugs getting costlier, people cheaper by Harsimran Shergill


MONA SANGWAN, a teacher at a private school in Delhi, who earns just Rs. 4,000 a month and is her family’s sole earning member, had nearly begun to despair. How on earth was she going to raise Rs. 7,000 every month to buy the medicines her brother Ashwini, a kidney transplant patient, needed?

Mona would have continued to despair had not the NGO Sarvohit Social Welfare Society stepped in. And to be sure, this is not her story alone. It concerns thousands of others who have no means of buying the exorbitantly priced medicines they have been prescribed.

The stats say it all. Medicines make up 50-80 percent of healthcare costs in India — the leading cause, after dowry, of rural debt. Pronab Sen, principal adviser at the Planning Commission, believes any reform should accord priority to making price reporting mandatory. Says Sen: “We need to have a publicly acceptable database for all formulations. People must have the right to choose from all available options.” Yet this is just what the pharmaceutical firms won’t have; because having such a database would mean that doctors and chemists will no longer be able to hand out the brands they favour for personal gain.

The recent trend of mergers and acquisitions is equally unsettling. As many as six Indian pharmaceutical companies were acquired by multinationals over the past five years. These include Ranbaxy Laboratories Ltd, which was acquired by Daiichi- Sankyo Company Ltd; Dabur Pharma Ltd by the Singapore arm of Fresenius Kabi AG; Piramal Healthcare Ltd by Abbott Laboratories; and Shanta Biotechnics Ltd by Sanofi Aventis SA.

S Srinivasan of Low-cost Standard Therapeutics (LOCOST), Baroda — a company that makes cheap drugs — says the pharmaceutical sector is propelled exclusively by the profit motive: public interest means nothing to it. Srinivasan says profit margins can range from 8,000 to as much as 10,000 percent.

But ownership apart, there is also, as Sen explains, the matter of “duality”. While the Ministry of Health is responsible for sanctioning licences to the pharma companies, price control is the sole preserve of the Ministry of Chemicals and Fertilisers. And there is hardly any coordination between the two.

This is one major reason why drugs under the National List of Essential Medicines (NLEM) — those that fall under the price control regime — nosedived so sharply, from 347 in 1979 to 74 in 2008. “And even of these 74, there are only about 12 to 13 that are of any relevance today,” says Mira Shiva, a health activist and convener of the All- India Drug Action Network (AIDAN). “This list of essential medicines has not been reviewed for years, and has kept shrinking,” she adds.

As a 4 August 2010 report to Parliament by a standing committee on health and family welfare, said: “Prescription of useless drugs by many of the doctors with ulterior motives is rampant.”

This is also borne out by an ORG Nielsen study that found that the top-selling 300 medicines account for more than Rs 35,000 crore worth of sales, or almost 90 percent of the retail market. The India Health Report 2010 by Indicus Analytics has compiled equally damning statistics: “India spends around 4.8 percent of its gross domestic product (GDP) on healthcare, of which the share of public expenditure is 1 percent.”

Shockingly, nearly 60 percent of the top-selling 300 medicines remain outside the purview of NLEM. The only cure, all agree, is a large, healthy dose of regulation.