Business viability must for affordable medicines
The government would do well to pay heed to the suggestions of a task force on the 2013 Drug Price Control Order (DPCO), asking for removal of some medicines from it as well as relaxing some of the price controls. While this would mean allowing increases in the prices of essential medicines, including those for treating ailments like diabetes, cancer and cardiovascular diseases along with antibiotics, this is necessary in the interest of a stable and predictable price control mechanism which will benefit both the drug-makers and also the patients. It is also true that any hike in the prices of medicines, especially the essential ones, would be opposed vehemently—the Standing Committee on Chemicals and Fertilizers recently recommended that the scope of price control be extended from the current list of 509 formulations to the entire industry since ‘all medicines are essential and (are) taken only when (they are) needed by the patient’.
The problem with pharmaceutical regulation in the country is that it ignores the business requirements of industry in the name of protecting patients. Apart from ensuring that patients do not get the benefits of the latest research as firms are reluctant to invest in R&D, India’s pharma regime has also kept it on the US’s IPR watch-list. What is shocking about the price controls is that drug prices in India are amongst the lowest in the world. So, the task force has done well to suggest the government maintain a balance between affordability of medicines and business viability, as over-regulation of medicine prices acts as a deterrent for investment in the sector. At some point, the government has to understand that it can’t continue with the mistake it committed, for instance, in issuing a compulsory license for Bayer’s liver and kidney cancer drug Nexavar—with only a few thousand patients involved, it would have been better to negotiate a price with Bayer and subsidise part of the cost of treatment. In the case of other medicines, too, instead of controlling prices, it can ensure availability of lower-cost medicines for the poor by measures like bulk purchases by the government hospitals, and getting PSUs to produce more essential drugs.