|Rediff India Abroad Home | All the sections|
Does the pharma sector need more regulation?
January 23, 2008
"With the price control list reducing, prices are spiralling - Roche's drug for Hepatitis C costs Rs 200,000 for a six-month treatment"
As a medical aid organisation providing treatment in developing countries, Medecins Sans Frontieres (MSF) is often faced with the issue of the unaffordability and unavailability of essential medicines.
In India, access to affordable medicines has long been dependent on government regulation of the patent system and pricing of essential drugs in the domestic market.
Therefore, Roche remains unchecked when it prices peginterferon alfa-2a (Pegasys), a new generation Hepatitis C therapy patented in 2006, at about Rs 200,000 ($5,000) per six-month treatment course.
More recently, a Task Force was set up for 'Making Available Life-saving Drugs at Reasonable Prices' in April 2005. Pronab Sen, member of the Planning Commission, submitted the Task Force report to the Department of Chemicals & Petrochemicals. Since then the government's policy document on pharmaceutical regulation and pricing, the 'National Pharmaceutical Policy, 2006' has been under review. In the meantime, essential drugs continue to be patented and become unaffordable.
To address such pricing barriers to treatment, patients and public interest groups have been advocating for a revival and reform of the government's policy on price monitoring and regulation. They believe that a number of strong measures to make drugs affordable and available can be immediately taken which include price control, revival of public sector manufacturing and issuance of compulsory licenses under the patent law.
Such measures and government regulation are not uncommon in other countries as well. While Canada negotiates the price of medicines at the time of marketing approval, Thailand and Brazil have invoked compulsory licensing provisions to make drugs more affordable.
"Reducing price control spurred growth in production, and so, prices here are the lowest in the world. Don't reverse this."
In the case of patents, our law is adequate. The necessity is to hold it and resist the attempts of MNCs, which are trying to change the patentability criteria to their advantage. Although our law can be made even more people-friendly by simplifying compulsory licensing and pre-grant opposition procedure by using all available TRIPS flexibilities, we do not want to go in for any change at this stage till we have sufficient experience of the law as it stands. Application procedure and records, however, need to be digitised to make patent examination easier and quicker.
Indian drugs have acquired a good reputation the world over. This is evident from the fact that our exports are rising, that too to developed countries. We have the largest number of firms with US FDA registration and this shows that our quality is of the highest grade. Our exports of drugs and pharmaceuticals have risen from almost nil in 1960 to Rs 31,000 crore in 2006-7.
However, the pricing issue in pharmaceuticals is causing worry. It is well-known that due to progressive de-control in this industry, our production of drugs and pharmaceuticals has grown tremendously. From a meagre Rs 5,700 crore (Rs 57 billion) in 1991-92, production has gone up to Rs 68,598 crore (Rs 685.98 billion) in 2006-07.
Indian prices are already low, perhaps the lowest in the world. For example, a pack of 10 tablets of 500 mg Ciprofloxacin (an antibiotic) is available in India for less than Rs 25 as against an equivalent of 90 in Pakistan and 480 in the US. This has happened because the span of price control has been progressively reduced from 345 drugs in 1979 to 74 today. And the result is an all-time high growth rate with the lowest possible prices and best quality.
With this background, is it not surprising that the government is now insisting on cost-based price control and increasing regulation in the name of reducing prices of medicines? We are not against increasing efficiency which results in lower costs and the resultant lower prices, but the government's insistence on bringing them down forcibly through regulation may actually kill the proverbial golden goose. This is also against the present trend towards liberalisation and de-control the world over.