A tsunami in drug prices

India has a domestic retail market of around Rs.1.5 trillion
A tsunami in drug prices
Representational Image Flickr [Creative Commons]

Incredible! But true. Indians spend nearly Rs 36,000 crore annually on over-the-counter (OTC) drugs for treatment of 27 ‘minor’ ailments. Interestingly, a large part of this expenditure goes towards consultation fees to doctors.

This is the finding of a novel survey carried out by a pharma body - the Organisation of Pharmaceutical Producers of India (OPPI), which was released last week.

The survey further revealed some interesting points. The healthcare professional-related (HCP) expenditure included Rs 11, 623 crore as medicine cost and Rs 9,710 crore as doctor or paramedic consultation fee, Rs 4,035 crore spent on diagnostics and Rs 5,358 on transportation, communication and productivity.

In fact, the week observed another development in the pharma industry when the country’s drug pricing regulator, the National Pharmaceutical Pricing Authority (NPPA), while taking route of the Drug (Price Control) Order, 2013, announced a 10.7 percent change in the prices of essential drugs. This is going to trigger a sharp increase in the ceiling on the prices of more than 800 drugs under the price control which will see a sharp increase beginning April 1.

This steepest hike while percolating down the line will directly raise the prices of a wide range of medicines and even few medical devices will be impacted. The upward price revision of drugs means that the household budgets will be hit again as patients have to spend more for their drugs within their limited means.

Pertinently, the outbreak of coronavirus and subsequent economic lockdown led to a never-seen-before economic crisis where we witnessed millions of people losing their jobs and millions saw cut in their income streams.

Remarkably, India has a domestic retail market of around Rs.1.5 trillion. Data reveals that it constitutes 18 percent of essential medicines including basic medicines such as Paracetamol, common antibiotics, drugs for hypertension, diabetes etc.

Is the steep rise in price of essential drugs going to impact the consumption?

Given the nature of the product, having direct relation with the health of an individual, the rising prices of the drugs won’t face any resistance on the consumption front. The sales of the essential drugs won’t be impacted as they are a necessity for the patients. It will, however, impact the household budgets as they would be forced to further cut down expenditure on other items to fund the escalated cost of their medicines.

Now, speaking specifically in the context of J&K State, the increase in the prices of drugs is not less than a tsunami for the patients as most of them have been struggling to lay their hands on the drugs for their treatment. The local pharma market is already dominated by the skewed drug prices.

In my previous columns on the subject, I have been deliberating upon the skewed pricing of medicines, especially the life-saving drugs, in the local markets. It makes sense to reproduce those pharma trade tricks eating the savings of gullible patients.

Even as you see the cost of the medicine plainly displayed on its cover, the actual cost price of the drug remains invisible. It’s wrapped in so many layers like maximum retail price (MRP) that almost no one understands what’s really happening.

The maximum retail price (MRP) printed on most of the drugs/ a healthcare article is already loaded with unbelievable margins ranging from 100 to 1000 percent!

Here, depressing instances galore in abundance when even a financially sound family had to sell-off their assets to meet treatment expenses. Any savings become the first casualty when it comes to availing healthcare facilities – be it diagnostic tests or purchase of medicines. Not only savings go, money is borrowed to foot the medical bills. Ultimately, acute miseries engulf such families.

There are numerous painful stories of terminally ill patients narrating their struggle for want of medicines and succumbing to the disease midway through the treatment protocol. In other words, the high cost of life-saving drugs has been consuming the life of a patient more than the disease itself.

Here every unit responsible for the pricing and distribution of life-saving drugs like stockists, retailers, carrying and forwarding agencies and other liaison agents are involved in the loot at the cost of a human life.

It is not a surprise to see the drugs, whose prices are ceiled as per the Drug Pricing Control Order (DPCO) decided by the NPPA, are being sold at two to ten times of the original cost in local markets. As per the DPCO rules, the traders cannot sell these drugs at a profit margin of more than 16%.

Now the current steep rise of over 10 per cent in the prices of drugs is going to add more woes to the patients. The revised pricing has given a whip in the hands of pharma traders to further dictate the terms to the patients when it comes to the cost of medicines. So, in the coming times, affordability of treatment protocol is a daunting task for the patients in the coming times.

However, at the same time, the concerned authorities need to rise to the occasion and initiate strict measures to curb the unfair trade practices of the pharma traders. There is dire need to make drastic cuts in taxes charged on, at least, life-saving drugs to help the patients to afford their treatment.

In other words, what’s needed is that these skewed medicine price bites need special focus of the government to bring parity in costing of medicines. Otherwise, the revised pricing would force the patients to surrender to their destiny in absence of medicines.

A sound strategy to ensure affordable healthcare costs and a well-guarded health portfolio across populations in the region (J&K) will always remain a constant reminder that in all circumstances lives of people matter.

Meanwhile, our ‘holy’ professionals (doctors) also need to be focused. As per the survey report mentioned in the beginning, doctors eat up a large portion of patients spending on the treatment. Majority of doctors have, of course, developed an attitude to look upon a patient as a money generating machine and don’t hesitate to employ all strategies to make money.

Most of them, unfortunately, only focus on the pocket of the patient. It makes them no difference whether the condition of the patient improves or worsens. Whatever they value is just money, not anything else!

Measures need to be taken to stop transformation of this community into ‘holy’ entrepreneurs. They should not be allowed to jeopardize patients’ interest by resorting to unethical drug promotion at the cost of patients’ financial health.

All these measures will ultimately provide relief to the patients as they would be able to afford their treatment. Precisely, bringing down the overall healthcare expenses, particularly in case of terminally ill patients, will go a long way to achieve the overall goal of affordable healthcare for all.

(The views are of the author & not the Institution he works for)

Disclaimer: The views and opinions expressed in this article are the personal opinions of the author.

The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.

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