Written by: Express News Service
3 min readSep 26, 2012 03:54 AM IST
First published on: Sep 26, 2012 at 03:54 AM IST
The Jan Swasthya Abhiyan (JSA) expressed serious concern over reports that the Group of Ministers,tasked to decide on the modalities of drug price control,is poised to recommend a ‘market-based’ mechanism. This,the activists said is against the Supreme Court’s directive to the government which sought quick mechanism to control the prices of all essential drugs. The Supreme Court had responded to a PIL filed by the All India Drug Action Network (AIDAN) which had argued that drug prices are a major cause for escalating medical expenses and that they need to be brought under control.
JSA stated in a press release that activists Dr Amit Sengupta,Dr Anant Phadke,Dr Abhay Shukla and others had signed a memorandum of demands and urged the government to adopt cost-based pricing mechanism so that the price rise could be controlled. The government should pay heed to the Supreme Court’s directive and not take cosmetic steps to satisfy the court,while continuing to place the lives of millions in danger,the release stated.
The situation has arisen because medicine prices have no relation to the actual cost of production,packaging and marketing. A study commissioned by the National Commission on Macroeconomics and Health showed that there is a very wide variation in the prices of drugs sold in retail and those sold in bulk through tenders to institutions. The price differences ranged from around 100 per cent to 5,600 per cent. There is also a wide variance in prices of the same medicine sold under different brands by different companies.
Reports indicate that the government is set to introduce the concept of Weighted Average Price (WAP) as the method for fixing the ceiling price of drugs. In such a system the present prices of existing brands and their respective share in the entire market of a particular drug will be taken into account to compute the ceiling price. Such a method is entirely skewed,as the ceiling price fixed would largely reflect the price of the brand leaders. Generally 2-3 top selling brands – usually the most expensive or some of the more expensive brands — control bulk of the market. So this mechanism will do nothing to bring down drug prices,and in fact will encourage cheaper brands to start charging more and approach the high ceiling price.
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