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A band-aid

Raising prices of essential drugs will help ease shortage. Urgency of investing more in R&D remains.

By: Editorial |
December 16, 2019 12:45:23 am
hikes of essential drugs, indian pharma sector, india healthcare sector, Indian express editorial Easing the price ceiling could help the healthcare system tide over the current crisis.

Last week, India’s drug regulator, the National Pharmaceutical Pricing Authority (NPPA), used the public interest provision of the Drugs Prices Control Order 2013 to allow manufacturers to increase prices of 21 essential drugs by as much as 50 per cent. Most of these drugs are used to treat critical diseases such as tuberculosis, malaria and leprosy and are crucial to the country’s public health programme. The increase in their prices is, therefore, bound to raise concerns. But the decision of the regulatory authority — usually known to slash prices of life-saving drugs — was precipitated by an extraordinary situation. For nearly two years, drug manufacturers have been claiming inability to keep up with the country’s healthcare demands due to increasing costs of production. Easing the price ceiling could help the healthcare system tide over the current crisis. It may, as the NPPA has reasoned, “pre-empt a situation where the public is forced to switch to costlier alternatives”. But the drug regulator and the Department of Pharmaceuticals need to do much more to address the root cause for the shortage of critical drugs.

India’s pharma industry imports more than 60 per cent of active pharmaceutical ingredients (APIs) or bulk drugs — ingredients that give medicine its therapeutic value — from China. But in 2017, Chinese regulators cracked down on bulk drug manufacturing units for their failure to comply with the country’s environmental regulations. The revamped Chinese API industry has raised prices, leading to spin-off effects in India. For instance, the cost of making Vitamin C pills has gone up by more than 250 per cent since 2017. This has reportedly led to a 25-30 per cent shortage of this drug in India. Last month, the pharma major, Abbot, applied to the NPPA to discontinue production of the leprosy drug, Hansepran. The company pointed out that increasing costs of API imports had made the production of Hansepran unviable in India.

The importance of making medicines more accessible to those who need them cannot be overstated. However, drug price control measures in India have not always achieved this objective. The ceiling on prices of 74 bulk drugs in 1995, for example, forced many companies to opt out of API production. The Draft Pharmaceutical Policy 2017 did propose correctives. These included giving preference to drugs produced from indigenously produced APIs in government procurement and taking them out of price control for five years. More importantly, the draft talked about creating research and development facilities for API production. However, the policy has not gone beyond the draft stage. It needs to be revisited in light of the country’s current medicine shortage.

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