It is a challenge to provide low-cost medicines to consumers

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: The poorest countries of the world are the worst hit by health crisis and associated risks. It is estimated that about 1.1 billion people remains in extreme poverty on less than $ 1 a day.

The population living less than $ 1 is mainly concentrated in South Asia (39.2%) Sub Saharan Africa (29.3%), East Asia & Pacific (23.7%).

Sub-Saharan Africa has an alarming level of HIV prevalence in 7.7% of its population against the world average of 1.1%.

The HIV situation is worse in countries like Swaziland (38.8%), Botswana (37.3%), Lesotho (28.9%), Zimbabwe (24.6%), Namibia (21.3%), and South Africa (21%). The prohibitively high cost of treatment worsens the condition as it is hardly affordable by the majority of the target consumers.

Multinational corporations have traditionally priced their brands at a much higher level in the market. For instance, the price of Diclofenac Sodium is 193 times in the US compared to India.

A strip of 10 tablets of 500 mg each of Ciprofloxacin HCL, a widely used antibiotics costs about Rs 29 in India whereas it costs about Rs 2,353 to the consumer in the US. The price differential between the two countries is about 81 times. In the absence of free-market competition, the consumers have to pay higher prices.

It is not only the cost and market demand for the product, but several other factors that considerably influence its pricing in international markets. Such wide price variations in international markets are largely attributed to regulatory framework especially the patent regime in different countries.

A patent offers monopoly to manufacture a product for limited period given for a new invention. Indian patent Act, 1970 does not provide product patent protection for medicines and food. It only provides process patent that does not prevent manufactures from making products by using another process. Indian firms use reverse engineering to manufacture generic drugs by using their own process and has capability to produce even the most complex drugs of high quality. A generic drug is identical (bio-equivalent) to a branded drug in dosage form, safety, strength, route of administration, quality, performance, characteristics and intended use. Under WTO’s TRIPS agreement, member countries are required to give exclusive manufacturing rights to patent owner for 20 years.