Drug prices are of significant interest to the senior citizens everywhere including India. Being on the margin of the society especially in urban India, the old denizens cling desperately to the medicines prescribed by their doctors for continuing their tenuous toehold on life and thereby fighting off their shrinking sense of autonomy. That the expanding medical bill would be a fait accompli in their twlight years was clear to many since India became signatory to the TRIPS agreement and accepted product patent regime in the mid 1990s. Under this regime, Indian companies are no longer legally permitted to manufacture a drug whose main active component molecule or a combination thereof are being sold as a patented drug under a brand name. Not only the same molecule but even minor structural or compositional variants that may have remotely similar medicinal properties – the so called generic drugs – can not be made by indigenously developed manufacturing technology with a significant price advantage. The ‘reverse engineering’ credo employed by the protected Indian pharmaceutical companies pre-1990s which had allowed these Indian companies to produce a large number of generic drugs at affordable prices and make them available in the country as well as export profitably in the foreign markets (particularly in the third world countries), had to be discarded. Simultaneously, the price control exercised by the government was also relaxed to promote competition. From the 347 drugs in the list of essential medicines as in 1995, it had come down to about 37 as of now. As a result of these policy changes the prices of most medicines (for diseases spanning routine infections, ones related to lifestyle changes, as well as those for critical illnesses like cancer and HIV) in the retail market, where you and I buy medicines, have shot up appreciably.
As they say all ‘good’ (for the foreign multinational companies) things come to an end, the patents have a seventeen-year life of monopoly protection. Many innocent thinkers (think tanks in the government, academia and industry) during the early years of this century dreamt of resurgence of manufacture of the generic versions of many drugs coming out of the shadow of patents by the indigenous companies vis-à-vis many common and critical diseases that would help reining in the escalation of costs of health services borne both by the government and the individuals/insurance companies. Indians wishfully propose, MNCs dispose with firmness and remarkable deliberateness. There was this famous case of Novartis a few years back, wherein the company tried (though unsuccessfully) to extend the patent protection for one of its branded drugs beyond the initial period by trying to secure a fresh patent on a replacement drug molecule obtained by a mere tinkering of the originally patented molecule. What is more recently being discerned as a notable trend is the spate of successful bids for take over of major pharmaceutical manufacturing companies by MNCs (The Hindu, 3 September 2011, knowledge@wharton Today, 24 August, 2011). This happened under the government’s liberalization policy over the years of allowing 100% FDI in the pharma sector. As it has been argued in the articles cited above, the indigenous manufacturing infrastructure having come under the MNC leash the priorities may be reconfigured to producing blockbuster patented drugs for the rich developed countries rather than manufacturing cheaper generic drugs for the multitudes in India and the poor third world countries.
It is in this context that the public discussion (TOI, 30 October 2011) of a new ‘possible’ policy of the concerned government to introduce price control on a large number of essential medicine, bringing out a new national list of essential medicines (NLEM) and revising the Drug Prices Control Order (DPCO), 1995 make interesting reading. DPCO, 1995 having pruned the original list from 347 items to 74 (further watered down to the current number 37). It is being proposed to revise list in the light of developments and availability of new drugs and increase this number to 348. There is apparently a proposal to redirect the FDI investments to ‘greenfield’ (new product manufacture in new facilities) from the tendency make the so-called ‘brownfield’ investments (i.e. acquiring existing companies).
This is only a draft proposal and first the cabinet and then the empowered group of ministers (EgoM) have to debate and approve it (in the teeth of resistance from the pharmaceutical industry bodies). It is well to remember that such government initiatives to lay down new policy had not been successful twice (challenged in court in 2002 and again stuck in the EgoM in 2006) without success.
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