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LATEST NEWS UPDATES | Flawed drug price rules fleeced patients, helped hospitals -GS Mudur

Flawed drug price rules fleeced patients, helped hospitals -GS Mudur

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published Published on Jun 30, 2017   modified Modified on Jun 30, 2017
-The Telegraph

New Delhi: India's drug pricing rules allow companies to inflate the maximum retail prices of medicines, including life-saving drugs, costing patients thousands of additional rupees while offering slices of the profits to stockists, chemists, and hospitals.

Quotations received by hospitals from drug companies' representatives offering discounts on maximum retail prices (MRPs) of medicines provide what some doctors and patients' rights advocates say is fresh evidence for excessive profiteering in India's medicines market.

These lists of quotations suggest that patients, who are charged the MRP rates, would be paying far higher than the hospitals' procurement costs for these medicines.

The extra amount for a patient may be Rs 250 for a single dose of a life-saving antibiotic, meropenem, used when most other antibiotics have failed, or Rs 8,831 for eptifabitide, used to reduce the risk of heart attacks, or Rs 27,727 for trastuzumab, used in breast cancer. (See chart)

Difference between MRP and retail price

"Most patients don't know this: MRPs in India are designed to ensure a piece of the cake for every player on the drug supply chain," said Sourirajan Srinivasan, a member of the All India Drug Action Network (Aidan), a group of drug and health experts tracking India's drug pricing rules.

Sourirajan and others say the differences between the MRPs and discounted prices to hospitals underscore longstanding flaws in India's drug pricing rules that the Narendra Modi government has not yet fixed despite its multiple policy pronouncements about making drugs affordable.

Under the price-control formula, adopted in 2012-13 during the UPA's tenure, the maximum price for a drug is fixed by computing the average of the prices of all the brands with a market share of 1 per cent or higher.

The price, patients' rights advocates say, therefore lacks any real relation to the production cost and can continue to be exorbitant as long as all the major companies are charging high prices.

"What we're seeing is outright fleecing of patients, and it is hard to imagine that government agencies are unaware of this," said Gurinder Grewal, an internal medicine specialist in Ludhiana and former president of the Punjab Medical Council.

Grewal is a member of the Alliance of Doctors for Ethical Healthcare, which has been urging the government to crack down on unethical practices in healthcare, including the commissions paid to hospitals and doctors for medicines they prescribe or dispense.

Senior executives with the three companies named in the chart accompanying this report told The Telegraph that the discounts offered to hospitals reflect standard industry practice. Abbott and Karnataka Antibiotics declined to comment on the differences between the MRPs and hospital prices.

A spokesperson for Reliance Life Sciences, in an email response, said "this is standard industry practice," and added that "the discount depends on the nature of (the) drug and the medical domain".

Explaining why hospitals are offered discounts, the spokesperson said: "Hospitals break the bulk, maintain cold chain, manage drug administration, maintain pharmacovigilance and provide counselling."

Doctors say the actual extra costs on patients would depend on the specific drug and its dose. A patient with a bacterial infection prescribed meropenem at the MRP rate for two weeks would pay about Rs 10,000 extra.

Ashok Vaid, the chief of medical oncology at the Medanta hospital in Gurgaon, said an early stage breast cancer patient may need to be treated with trastuzumab for a year with one dose every three weeks. For a 60-kg patient, the 17 doses of trastuzumab over a year may mean an extra amount of Rs 300,000.

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The Telegraph, 30 June, 2017, https://www.telegraphindia.com/1170630/jsp/nation/story_159464.jsp


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