Coping with spiralling Drug Prices
Mathew Nampudakam

15th March is the ‘International Consumer Rights Day’. This year the day passed off without any major event to mark it. The usual advertisement from the Department of Consumer Affairs of the Government and media features on consumer issues were conspicuous by their absence. Was it not an indication of the lackadaisical treatment consumer issues get? My suspicion grows further from another incident too. When Justice Balakrishna Eradi, the first President of the National Commission, (since its establishment in 1987), retired in June 1997, Justice K.S. Paripoornan (Rtd. Supreme Court Judge) was appointed in his place. Tragically, he resigned after 10 days of the appointment in disgust, citing the reason of his not been allotted proper accommodation in Delhi. The Ministry of Food and Consumer Affairs and the Ministry of Urban Development could not sort out the issue. This happened at a time when the National Commission was burdened with around 4800 pending cases, as per figures available on 20th October, 1997.
After remaining virtually closed for nine months, the Commission has finally been revived with the appointment of Justice S.C. Sen as its President. Now the Commission is fully functional with all members and President in place, the 5000 pending cases may be cleared in due course.

Drugs Price and Patient Care
Drugs (medicines) have a major role in health care, but it is only one among the many factors in health management. Treating drug merely as a commercial product for profit, just like or on par other consumables is a negation of its fundamental/essential role in health care. Undue dependence on drugs in health care leads to the pharmaceuticalisation of health care which is detrimental to consumer interests. Unfortunately the liberalisation, deregulation and decontrol measures seen in the drug production and distribution infringe upon the rationality and patient welfare. If the new order encourages only costly drugs and newer technologies without offering corresponding cost advantages to the consumers, they serve no real purpose.
Despite the avowed pro-people stand of successive governments, the real facts do not corroborate their stands. Price controls are exerted by the Government to
ensure that essential drugs are available to the patients within reasonable prices. These drugs include the essential drugs, especially those meant for national health programmes like Tuberculosis, Malaria, etc. In this process, the Drug Controlling agency of the Government fixes the percentage of profit for each medicine over and above the cost of production. But the number of drugs under price control has been regularly coming down with successive Drug Price Control Orders (DPCO), as: 343 drugs in 1979 to 142 in 1985 to just 76 in 1995.

Dr. Mira Shiva of Voluntary Health Association of India (VHAI), a drug activist of many years standing, opines "None of these measures have made essential life-saving drugs adequately available at affordable prices, but the non-essentials have proliferated".
As far as the business of drugs is concerned the first priority of the pharmaceutical companies is profit, with the health needs of consumers ranking lower down. The drug promotion flourishes with the active connivance of drug prescribers and distributors. The manufacturers have well-established ways to influence and induce these people directly or indirectly to push up sales. This vicious circle plays against the interests of the hurried and worried consumers who have practically no choice but to buy the medicines at whatever prices they are offered to them. Ethical marketing practices are safeguards against these dangers. But like in the case of many other commodities, it has been observed that drug market can also be manipulated to create artificial scarcities. To the chagrin of consumers, they may be made to buy unnecessary, unjustifiably expensive and, at times, totally inferior medicines.

Medical Costs-Poverty Co-relationship

Costlier medicines are not always the best medicines, much though the popular belief goes, or interested parties make people believe. But increase in the cost of drugs and corresponding rise in medical costs have an adverse relationship with the overall well-being of people.
For patients with limited income, especially those living below the poverty line or those marginalized, unexpected medical expenses in real terms mean borrowing money which in turn will result in cutting down on food, and other essential items. Less food and nourishment will obviously lead to weakness and more sickness for the person and more visits to the doctor and more medicines. If the doctor also acts in the interests of drug promoters, the diagnosis and prescriptions are likely to be biased with obvious implications for the patient.
Apart from the drugs under price regulation, there are thousands of formulations competing with each other. In an ideal liberalised economy the price rise in new drugs does not affect the people, as there will always be cheaper alternatives. But the tragedy is that there is no such ideal situation. Patients do not have the benefit of competitions and market forces.
The modifications in Drug Policy 1986 issued in 1994 proposed that ‘government will keep a close watch on the prices of medicines which are taken out of price control. In case the prices of these medicines rise unreasonably, the Government would take appropriate measures, including reclamping of price control’ to be decided by the National Pharmaceutical Pricing Authority. This body would also monitor the prices of decontrolled drugs and formulations and oversee the implementation of the provisions of the Drugs Prices Control Order. The Government would have the power to review. Ceiling pricing would be fixed for commonly marketed standard pack sizes of price-controlled formulations and it would be obligatory for all, including small scale units, to follow the price so fixed.
The cost of drug promotion by the companies which include sponsorship of medical conferences in five star settings, costly gifts to doctors and such other things become part of the cost of the drug to be ultimately borne by the consumers. Incidentally, the Union Health Ministry had banned government doctors from attending international conferences organised by pharmaceutical multinationals lest they should be influenced. Even though that was a good step, the effect would be negligible as only 12 per cent of the total 1.25 million doctors in the country of all systems of medicines are in the Government service. Drug companies invest money on doctors expecting to recover their costs through sale of their drugs prescribed by these doctors. The drug promotion costs by transnational companies are said to be up to 33 per cent of the cost of the product. The plight of the consumers can be aggravated when the decision-makers also take the side of the drug manufacturers. The political masters are supposed to safeguard the interests of people, but their ill-informed or injudicious decisions can have large implications on people’s health. A recent incident speaks volumes.

Conflict of Interests
Former Prime Minister I. K Gujral has got the Union Cabinet to back him in taking his colleague M Arunachalam, Union Minister for Chemicals and Fertilizers to task, and in the process has virtually accused him of pandering to the interests of certain pharmaceutical companies. The Cabinet ruled against Arunachalam’s decision in January 1998 to prevent a reduction in the administered prices of key pharmaceutical products. This is one of the very few times in the country’s history that a Prime Minister has intervened in such a matter. The issue was the proposed price reductions in anti-TB drug Rifampicin, anti-ulcer drug Ranitidine and anti-asthma drug Salbutamol. In the case of all three drugs, Arunachalam had overruled the department’s recommendations, based on the findings of authorised bodies such as the Bureau of Industrial Costs and Prices (BICP) and the National Pharmaceutical Pricing Authority (NPPA).
In the case of Ranitidine, the BICP recommended that its price be brought down to Rs 1203 per kg from the prevailing Rs 1714 per kg. The methodology adopted to fix prices by the NPPA is to make the drugs cheaper for the consumers. Drug companies went to the court and even approached the Prime Minister’s office to prevent the reduction. A similar logic also occurred in the case of Rifampicin (anti-TB) whose price was to be brought down to Rs 4707 from the existing price of Rs 5220 per kg. Ranitidine (anti-ulcer) BICP recommended price cut from Rs 1714 per kg to Rs 1203. The Minister ordered review of the pricing done by NPPA and asked for fresh calculations. The industry was very much encouraged by the cooperation of the Minister!
Here the expert committees worked rationally and made its recommendations in the interests of the consumers. And the Minister obviously had different interests. In the end better sense prevailed and the Cabinet took the right decision. It is also creditable that the NPPA has acted tough and has followed its mandate to work for rationality in pricing. Consumers expect the agency to continue this good efforts towards protecting their rights. Here was something for the patients to cheer about. What will be the views of the new Government is of paramount importance to the health consumers of the country at large.
As per press reports (Indian Express, Mumbai, 26-1-1998) the Organization of Pharmaceutical Producers of India (OPPI) and the Indian Drug Manufacturers Association (IDMA) have made a joint representation to the Ministry against the recent decision of the National Pharmaceutical Pricing Authority (NPPA) reducing the prices of 72 drug formulations.
The pharmaceutical industry, claims that the apex body’s pricing decisions are arbitrary and ad hoc. The NPPA had recently reduced the ceiling prices of 35 formulations and the non-ceiling prices of another 37 formulations. These reductions ranged between 15.88 per cent in the case of oral contraceptive Lundiol and 0.17 per cent for Naprosyn gel, indicated for rheumatoid arthritis.
In a surprising move the Ministry of Chemicals and Fertilizers decided in November 1997 to exclude two drugs, Amikacin Sulphate and Mefenamic Acid from price control. The proposal was originally shot down by the former Minister. The two decontrolled drugs were among the 19 for which the Ministry had received representations from the industry seeking an exclusion from price control. In June 1997 the Government had written to various companies informing them that none of the 19 drugs would be excluded from price control on the grounds of public interest, but a sudden review of two drugs seemed intriguing. Cost of drugs eats up a major chunk of the health budgets, say 40-60 per cent in developing countries against 10-20 per cent in the developed countries. An increase in costs of drugs squeezes the limited resources further. The remedy to this problem is promotion of generic drugs which at times cost as little as 10 per cent of the branded drugs.
Many doctors may not be really aware of the functioning of the drug industry, as the economics of drug production and the marketing strategies

of drug companies are generally not part of the medical education. Doctors need to have wide choice of drugs to be clinically effective, but the best choice will depend on the amount of accurate information and knowledge doctors gather. It is not an easy task to select the best medicines in the interest of patients from among the the maze of thousands of different brands, with varying price tags between similar or identical drugs produced by different companies. Drug companies tend to exploit the information gap of doctors to charge higher prices. A rational prescription will lead to reduction in medical costs, less drug induced problems and to better health for the patients. Drug companies also use Patents to charge high prices.
The question of drugs has a public health dimension as well. It is much more than a question of economic wastage. Increased medical expenses upsets the fragile resource equilibrium of ordinary people. With the current level of impoverishment and deprivation of a large chunk of Indian people, galloping drug prices are a direct link to further deprivation.

"Effective health care depends on self-care; this fact is currently heralded as if it were a discovery... The medicalization of early diagnosis not only hampers and discourages preventative healthcare but it also trains the patient-to-be to function in the meantime a san acolyte to his doctor.
He learns to depend on the physician in sickness and in health. He turns into a life-long patient."

– Ivan Illich

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