‘Ensure uniformity and transparency in drug prices’

The Doctors for Ethical Healthcare (ADEH), in a memorandum submitted to the chairperson of the National Pharmaceutical Pricing Authority (NPPA) has demanded that the prices of drugs which includes medicines and medical devices should be streamlined. The profit on these should be capped at 30 per cent from the ex-factory price to the consumer based on the formula – landed cost/ ex-factory cost + 30 per cent trade margin = MRP, inclusive of retail and wholesale margin, logistics and inventory cost. At present, it is up to 5000 per cent in some cases as observed by the committee on high trade margins in the sale of drugs. The committee had submitted its report on 9th December, 2015 demanding capping of drug prices. But unfortunately the government has slept over it. This is hitting the consumer (the patient) hard as expenses on drugs forms nearly 67 per cent of out-of-pocket expenditure on drugs.

The delegation did not agree with the contention of the industry that lowering of trade margin will bring down their sale. This is because there is unhealthy competition. Nonetheless, if the price is made uniform and trade margins are streamlined, the sale of one will suffer.

In fact, the delegation argued that the industry has made its share of profit by selling the drugs after taking profit margin. It is the retailer who is making exorbitant profit on these drugs at the expense of the poor patients. Streamlining of the profit, in fact, will make the things easy for the industry. The delegation comprising Dr G S Grewal, Dr Arun Mitra and Dr Monica Chandy, members of the core committee of the ADEH said that same drug is being sold under different brand names at different costs. “There should be one drug one price formula. All the drugs should be sold only under pharmacological/chemical name. Name of the company may be written at the bottom of the product box/wrapper. To remove aberration of MRP and actual cost difference in case of generic drugs will be taken care of if product box/wrapper mentions the cost price and the MRP, so as to specify the profit margin in a transparent manner,” they said.

They also demanded steps to ensure that companies do not sell the drugs at inflated cost on the pretext of shortage due to corona virus. All chemicals, once they are labelled as drugs, should be brought under the category of essential drugs.

Drug is not a choice of the patient but discretion of prescriber, the delegation said. A chemical which has been labelled as medicine should be automatically brought under the scheduled list essential drugs, as drugs, and governed by the Drug Price Control as drug is not a choice, but an essential item to be taken in times of distress on the prescription of the doctor.