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LATEST NEWS UPDATES | Panel suggests price control in Essential Drug List by Kounteya Sinha

Panel suggests price control in Essential Drug List by Kounteya Sinha

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published Published on Sep 27, 2011   modified Modified on Sep 27, 2011

Drug prices have shot up phenomenally in India over the past decade and a half.

A Planning Commission's expert group says there was nearly 40% rise in all drug prices between 1996 and 2006, thanks to the nation's pricedecontrol policies of the 1990s.

Citing a study conducted in 2008, the Commission's high-level expert group (HLEG) on universal health coverage, headed by Dr K Srinath Reddy, says during the same period the price of controlled drugs rose by 0.02%, while those in the Essential Drug List (EDL) increased by 15%.

The price of drugs that were neither under price control, nor under the EDL grew by 137%.

The panel cites that the pharmaceutical industry spent over 25% of their annual turnover on sales promotion alone as compared to a paltry 7% on research and development in 2008-09.

The report says, "Taking advantage of lax regulations on drug pricing, the pharmaceutical industry has been able to reap high margins through complex price setting activities."

It has been observed that the price of a therapeutically similar drug could vary around 1,000% between the most expensive and the cheapest brands. The variation between the market and procurement price of similar drugs could range anywhere between 100% and 5,000%. The panel recommended price control on all formulations in the EDL.

The report says, "Direct price control should be applied to formulations rather than on basic drugs. This is likely to minimize intra-industry distortion in transaction and reduce as well as prevent a substantial rise in drug prices."

It brings to light the widespread use of irrational drugs. India, the report says, has the dubious distinction of its pharmaceutical market being flooded with about 90,000 formulation packs and brands. "The market is awash with irrational, non-essential and hazardous drugs. Of the top 10 products which accounted for 10% of the medicines sold in the market, two belong to the category of irrational vitamin combinations and cough syrup while the other is a liver drug of unproven efficacy. Ten of the top 25 products sold in India in 1999 belonged to one of these categories: blood tonic, cough expectorant, non-drug formulations, analgesics, nutrients and liver drug which are hazardous, non-essential or irrational."

Drug Controller General of India (DCGI) estimated that about 46 banned fixed dose combination drugs (FDCs) continue to be marketed irrespective of the ban. About 1,067 FDCs are freely marketed with the state drug controllers' approval, but without the DCGI's concurrence. The drug licencing approval for marketing is the prerogative of the DCGI, while state drug controllers are required to approve manufacturing and selling licence of drugs in the state.

"Drug makers conveniently circumvent this process by approaching state drug controllers for obtaining marketing approval licenses. Almost all the major medicine producers are engaged in producing irrational medicines," it says.

The large scale promotion and publicity of these non-essential drugs by the pharmaceutical industry has led to physicians and pharmacists in both private and public health facilities being incentivized to prescribe and dispense drugs that are irrational. Irrational practices in prescriptions and dispensing of drugs continue to be rampant in the country, and is largely observed through the number of injections and antibiotics prescribed, prescriptions by brand names rather than generic names. A recent government survey of drugs reveals that 0.3% of all sample drugs were found to spurious, while 6%-7% of drugs in the country are found to be substandard in quality, it pointed out.

"There is a clear need to phase out hazardous, non-essential and irrational medicines and irrational Fixed Dose Drug Combinations. Recent reports on anti-microbial drug resistance in India clearly point to the need to end the irrational drug prescription and dispensing practices. Standard Treatment Guidelines should be implemented and should include only rational formulations. Unethical or aggressive marketing practices by drug and devices manufacturers and sales persons as well as incentives offered to doctors to promote prescriptions should be banned and penalized," the panel has suggested.

The Times of India, 28 September, 2011, http://timesofindia.indiatimes.com/india/Panel-suggests-price-control-in-Essential-Drug-List/articleshow/10148203.cms


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