Mirdha argued that profits earned by pharma companies were primarily used in promotional expenses and for foray into other businesses. She claimed that top-50 pharma companies spend over R5,300 crore every year, while generating sales of slightly over R28,769 crore.
That is over 18% of total income is spent on selling expenses. This comes out to expense of R1.3 lakh per doctor per year and is highest among all manufacturers, Mirdha told the GoM. She particularly cited the example of a company which in April 2007, spent over R10 crore to fly 1,300 doctors with spouses to holiday resort Bali for five nights to participate in a two hour conference.
She made out a case to include patented drugs under price net. Since 2003, over 1,277 registration certificates have been issued to import finished formulations. Many of them are monopoly patented drugs. Traders are importing and selling directly to patients on tips from doctors, Mirdha told the GoM. For instance, she cited examples of drug Trastuzumab and Bevacizumab that costs over R1 lakh per dose, and are prescribed for over a year. Drugs such as Sunitinib and Sorafenib cost over R2 lakh per month to patients while Dasatinib costs R1,70,000 on a comparable basis. Mirdha told the GoM that at a time, when sectors such as telecom, insurance, electricity are regulated, should medicines be left unregulated. She argued that drug prices are regulated even in free market economies such as France, the UK, Canada and Australia.
The pharma pricing policy is incomplete till it covers only off-patent medicines being marketed in the country. Any National Pricing Policy should be comprehensive and consolidated covering all medicines being sold in India irrespective of their patent status or source, Mirdha had said in an earlier letter to the prime minister. On medical care, people of India spend 82.7% from their personal resources. Out of 174 countries surveyed, India is ranked fourth in terms of such spending just after Myanmar, Guinea and Afghanistan.
Even Pakistan ranks fifth with a comparable expenditure estimated at 80.4%. Between 40 to 70% of the cost of treatment is spent on drugs. It is going up due to patents coming into force, Mirdha told the GoM.