There is a huge trade margin, especially on generic medicines, including those marketed by renowned drug manufacturers. Even branded medicines have exorbitant profit margins
Jan Aushadhi Kendras are now being opened under Pradhan Mantri Bhartiya Janaushadhi Pariyojna claiming a huge saving to commoners ranging from 50-90 per cent on the purchase of generic medicines from these about 10000 centres throughout the country with the average monthly sale of just rupees 1.50 lakhs per month for each centre. Much more could and should be achieved simply by fixing a maximum trade margin on all medicines and medical consumables including generic medicines of say 30 per cent between ex-factory price and maximum retail price (MRP).
Presently there is a huge trade margin, especially on generic medicines where a box of 10-20 strips is available with distributors at about one-tenth of printed MRP including those marketed by renowned drug manufacturers of branded medicines. Even branded medicines had varying trade margins with a box of 10 strips of 10 capsules each of Bifilac-HP with a total printed MRP of rupees 2100 per box available with the distributor at just rupees 1140 per box. Even the World Health Organization (WHO) established that even essential drugs in India with the lowest printed MRP are exorbitantly priced over manufacturing followed by abnormally high trade margins between ex-factory price and MRP. The same holds good for other medical consumables like a box of 200 Accu-Chek Safe T Pro Uno single-use lancing devices with printed MRP of rupees 2200 used to be available at just rupees 400 only.
Drug manufacturers at times pack just eight lozenges per strip of commonly advertised cough medicines instead of ten because consumers usually judge by price per strip rather than per lozenge. Many drug manufacturers have started packing medicines in strips of fifteen rather than earlier ten to boost up sales because most chemists sell complete medicine rather than cutting the strip to sell in bulk. National Pharmaceutical Pricing Authority (NPPA) should direct all medicines to be compulsorily packed in units of 1, 2, 5, 10, 20, 50, 100, 200, 500, 1000 and likewise higher multiples unless permission is sought from concerned authorities to pack certain medicines in units other than these for dose-wise administration. The name of the medicine is usually printed just once on the side of the medicine strip. The wrapping foil must be so designed that the name of the medicine may appear for each packed tablet/capsule with the name of the medicine also embossed/printed on each tablet/capsule.
Ex-factory prices of different branded medicines for the same basic salt have vast differences. Branded medicines from different renowned companies are priced with heavy differences depending on the popularity of the brand like Calmpose and Valium-5 both having Diazepam-5 as basic salt have huge price-difference. Government-owned Indian Drugs & Pharmaceuticals Limited (IDPL), since closed, sold Diazepam-5 under the brand name Calmod at a still lower price. Medicines are put in different categories for price-regulation with Calmpose and Valium-5 put in a category where there is no price-regulation. The system of having multiple categorisations for medicines must be removed because patients have to take prescribed medicine irrespective of their categorization.
A study conducted by a prominent newspaper in the year 2018 revealed that five chemist shops around the premier Post Graduate Institute of Medical Education and Research (PGIMER) in Chandigarh were selling a particular medicine having prices ranging from rupees 255 to rupees 1550. There is a regular price increase for many branded medicines, with NPPA being a mute spectator. NPPA should devise a mechanism whereby drug companies may be allowed to have some basic profit margin on all types of drugs irrespective of their categorization allowing any price revision only once in a year. Madras High Court once directed the Income Tax Department to submit details of claims made by pharmaceutical companies towards tax deductions for gifts made to doctors, names of doctors and penalties paid by these companies for drug overpricing. Any type of gifts by drug companies must be banned. Paying commissions to medical practitioners by pathological laboratories, investigating centres and hospitals should also be a criminal offence to ensure economical medical investigations. Private hospitals should be directed not to take any share from consulting/visiting fees of medical practitioners. Some upper limits should be fixed for the consultation fees of medical practitioners.
Since the wholesale medicine market of Bhagirath Palace (Delhi) has virtually turned to be a retail market giving 20-25 per cent discounts even on single strips of medicines, tenders can be invited for opening chemist-shops in government and private hospitals at least in big cities where branded medicines may be available even in single strips at 20-per cent discounts. Only branded medicines should be allowed to be prescribed in all fields of medicines including Allopathic, Ayurvedic, Unani, and Homeopathy with the Central Government having its large production units for every type of medicine by reviving Indian Drugs & Pharmaceuticals Limited (IDPL). Central Information Commission (CIC) in its order dated 01.10.2018 recommended that NPPA and others concerned consider all these suggestions in the larger public interest. But NPPA challenged the CIC decision just on recommendations (and not directions) at the Delhi High Court. Soon after Competition Commission of India (CCI) in its policy note also pointed out unreasonably high trade margins as a reason for exorbitant drug prices. But no corrective measures are seen at least on non-essential and generic medicines.
BJP MP Bhartruhari Mahtab raised the issue of generic drugs in Lok Sabha on 19.07.2019, rightly demanding an inquiry to find out the efficacy of generic drugs quoting a book study that Indian drug manufacturers were producing quality generic medicines for US and European countries with sub-standard generic medicines marketed in domestic market. NPPA should ensure that generic medicines sold in Indian markets are of export quality. Export of world-class generic medicines can provide the country with adequate foreign exchange and reputation.
Lucknow bench of Allahabad High Court in the year 2018 imposed a fine on three doctors for illegible handwriting on injury reports. Odisha High Court on 13.08.2020 advised doctors to write legible prescriptions preferably in capital letters. Medical practitioners should compulsorily issue computerised prescriptions.
The Union Health Ministry should develop user-friendly software separately for hospitals, pathological laboratories and medical practitioners providing a unique ID for each patient so that complete medical history may be available even online to the patient. Dual pricing must not be allowed in health services including for pathological and biochemical tests for normal patients and those covered under the Central Government Health Scheme (CGHS).
Vegetarian cellulose capsules should be encouraged to replace non-vegetarian gelatin capsules presently having a 98-percent market share to respect the sentiments of the majority vegetarian population. The Supreme Court ruling of the year 2013 made it possible to distinguish vegetarian and non-vegetarian medicines by having green and red dots. Providing land at subsidised cost/lease is substantial government funding. All such hospitals should be directed to sue-motto declare themselves as public authorities under section 2(h) of the RTI Act, or else pay market-price of land provided to these hospitals at current market rates.
(The Writer is an RTI consultant holding the Guinness World record, views are personal)
