Guru Prasad Mohanta
You may no longer be able to afford new, patented medicines as the government has amended the Drugs (Price Control) Order — a move that would benefit mighty foreign pharmaceutical companies. The amended order has decontrolled pricing of innovative patented and orphan drugs.
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The Drug Price Control Order was originally introduced in 1963 to keep medicines affordable to the common man. It was revised in 2013 after a series of flip flops and all essential medicines were brought under its ambit. Subsequently some medical devices, notified as drugs, were also brought under price capping, benefiting many. The order also aimed to encourage domestic pharmaceutical companies to innovate and kept patented products developed using indigenous technology out of price capping for five years. But the present decision is contrary to this and benefits foreign pharmaceutical giants as the provision supporting drugs produced by indigenous technology has been scrapped.
Innovation in drug development is extremely expensive. The cost of developing a new drug is an estimated $2.87 billion. Such large investment is beyond the reach of Indian pharmaceutical companies. Domestic companies are extremely strong in generic medicines and the country exports these to more than 200 countries, including developed ones.
India reached such a position owing to the liberal patent policy of 1970s. The Patents Act of 1970 allowed process patents and disallowed product patent, which offered ample opportunities for domestic pharmaceutical companies to produce the same molecule by a different process. This benefited not just pharmaceutical companies but also people of the country. New patented medicines were available at affordable prices in the country, compared with neighbouring countries. The product patent regime introduced in 2005, as part of compliance with International obligation, though, put Indian pharmaceutical companies at a disadvantage.
The health ministry is entrusted with regulations to ensure quality of medicines by licensing import, manufacture and sale of medicines. But it has no control over medicine policy or prices. Prices of medicines are significant in deciding access to medicines as most people in the country pay hospital expenses from their pockets, unlike in developed countries where it is borne entirely by the government or through reimbursement schemes. Patented medicines are priced exorbitantly throughout the globe. The department of pharmaceuticals, under the ministry of chemicals and fertilisers, has the mandate to form a medicine policy and to fix prices of medicines. The policy is always pro-industry but price control is pro-people. A fine balance has to be struck between the two, which is often difficult.
Individual patients have to struggle with high drug prices and treatment will cause great strain not only on individuals but also on health budgets
The present price regulation is an attempt to balance the need of pharma industries to grow and the access people have to medicines. Instead of cost-based mechanism of fixing drug prices, the order allows a market-based pricing mechanism. All patented and orphan drugs are out of the price-control mechanism for five years. This would affect patients who depend on imported patented and orphan drugs. These are prohibitively priced and can cause denial of treatment.
The health ministry has reportedly asked the department of pharmaceuticals to keep tabs on orphan drugs. But the pharmaceuticals department’s new notification has instead taken patented and orphan drugs out of the price-control mechanism for five years. This benefits only pharmaceutical giants and not poor patients.
Individual patients have to struggle with high drug prices and treatment will cause great strain not only on individuals but also on health budgets. The government has two tools to tackle high prices of patented drugs — price capping and granting compulsory licences under the Patents Act.
With the first option out of question now, the government has the option to adopt compulsory licensing.
Patients in India will have a tough time as a result of the amended order. The government has to react appropriately to facilitate the common man access to new treatments. The impact of the current order will be felt only after a while.
The writer is professor, department of pharmacy, Annamalai University. e-Mail: gpmohanta@hotmail.com
