What is the issue?
- Union Government is attempting to make the prices of essential medicines affordable.
- But actually price curbs deters producers and turns a burden to the patients.
What are the steps in this regard?
- The government had extended the scope of essential medicines by bringing a larger number of them under price control list.
- It also imposed a cap on the prices of medical implants; first coronary stents and then knee implants.
- On the drugs front, the government made it mandatory for doctors to prescribe medicines using generic names.
- Now it is considering limiting the number of brands of a drug a company can manufacture and also ending contract.
What are the concerns with these?
- Government's measures on price control is driving some foreign manufacturers of implants to withdraw some products from the Indian market.
- The government refused the withdrawal permission for six months and extending it further.
- An US pharma manufacturer has taken a $10 million on sales of knee implants as a result of price control in India.
- US trade representative has cut duty concessions to Indian imports into the US, in response to India capping cardiac stents and knee implant prices.
- After the initial price controls on implants, there has been overpricing in other critical cardio devices, patients are paying up to five times the imported cost of these devices.
- The move on prescribing medicine on its chemical names is helping the chemist to sell a product of a company which offers them high margins.
What measures are desired?
- The government needs to upload all the trade transactions of the chemist on a central portal.
- This will make transparent what is being sold at what price and who has manufactured it.
- There is a need to have a multilayered and extensive public health service in order to contain private hospitals, clinics and diagnostic centres.
- The public agency can procure in bulk at a negotiated price and do the job of price control at a fraction of the cost and paperwork of direct price control.
- Operational and governance-related waste can be reduced by transparent and efficient public procurement of pharmaceuticals.
Source: BusinessLine
