Drug Price Policy Under Scrutiny


drugsThe Centre has once again received flak for failing to curb the high prices of medicines. Condemning the National Pharmaceutical Pricing Policy (NPPP), recently the Supreme Court asked the Union Ministry of Chemicals and Fertilisers to take a serious note of the market prices of drugs. The court was acting on a PIL filed by the All India Drug Action Network, a collective of several NGOs working to make medicines more accessible.

A three-judge Bench headed by Justice TS Thakur sought an explanation from the Ministry as to why the prices of life-saving drugs were not being brought under control. The writ petition, which has been in the apex court for more than a decade, has again come to a standstill for six weeks as the petitioner has been asked to submit recommendations for changes in the policy. The Ministry will have to pass an order within six months once the recommendations are submitted.

recommendations are submitted. The government’s capping mechanism, to regulate the rising prices of drugs, is a failure and it is the public that has to bear the brunt by buying essential medicines at exorbitant rates. The government is answerable as to why medicines are not made available to the public at an affordable price despite the fact that it formulated the NPPP in 2012 and the Drug Price Control Order a year later.

The petition highlights how the price control order ignores the fact that supplies by pharmaceutical companies to state governments are made at a much lesser rate than those stipulated in the order. With the implementation of advanced marketing commitments — which is a financial commitment made by a government or a financial entity to help pay for the future purchase of a medicine — the government is buying specific medicines in bulk without keeping a check on the availability of all the medicines required. Perhaps, this is why the Supreme Court has labelled the current drug policy as ‘unreasonable and irrational’.

Anita Kotwani from the Department of Pharmacology at the Vallabhbhai Patel Chest Institute, University of Delhi, surveyed government hospitals of Delhi in 2013. The three procurement agencies in the national capital — Central Procurement Agency (CPA) for the Delhi Government, the procurement department of the mcd (Municipal Corporation of Delhi) and the Medical Stores Organisation (MSO) — take medicines from pharmaceutical companies on the basis of a tender. Thus, the company with the lowest bid is preferred.

It was found that the CPA and the MSO were procuring only 12 medicines out of the 50 medicines surveyed. Therefore, hospitals, which come under the central government such as Lady Hardinge Medical College, Ram Manohar Lohia Hospital and Safdarjang Hospital were making their own independent procurements.

Surprisingly, there was a price variation for the same medicine procured by different agencies and hospitals. The medicine price was higher in the case of purchases made by individual hospitals.


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