Drug price control code

Author: 
Dr Arun Mitra

Every year 6.3 crore people of our country are pushed below poverty line because of out of pocket expenditure on health. This fact is admitted by the National Health Policy document 2017. Nearly 67% of this expenditure is incurred on drugs. Therefore, it is important that prices of drugs should be brought under control. To regulate the pharmaceutical companies, a Uniform Code of Pharmaceutical Marketing Practices (UCPMP) was prepared by the department of pharmaceuticals, Government of India in 2011. But it was said to be voluntary for some time. A letter of the ministry of chemicals and fertilizers, department of pharmaceuticals dated 12 December 2014, had mentioned that this will be voluntary for a period of six months with effect from 1st January 2015 and will be reviewed thereafter.
The voluntary implementation of the code, however, did not yield desired results. Pharmaceutical companies did not take any tangible steps to implement the code. Clauses 6 and 7 of the code prohibit pharma companies from giving freebies to the medical professionals. But to promote their sales the companies have been luring medical practitioners by offering expensive gifts and even foreign travel to attend conferences, including even leisure trips for the families. This has added to the cost of drugs. But despite several representations from the public health activists and civil society groups, the practice has not stopped. The Indian Medical Council (professional conduct, etiquette and ethics) regulation also warns the doctors against such practices to receive financial benefits in any form, including for attending education programs. Taking cognizance of the matter, the Central Board of Direct Taxes (CBDT) in its Circular No. 5/2012 [F. NO. 225/142/2012-ITA.II], dated 1-8-2012, had said that any such expenditure will not be considered for tax deductions.
The UCPMP also asks companies to adopt stipulated procedures laid down by the competent authority for involving doctors in their research projects. Several research works are not carried out in accordance with the laid down procedures. The companies paid money to doctors for the work which they had actually not done. It is a common practice that the companies approach doctors to do surveys highlighting efficacy of a particular drug. These companies then use doctor’s reference, including photograph in their promotional literature. The UCPMP prohibits such work.
It is expected that after the code is made mandatory the prices of drugs are likely to come down. But we have seen in the case of coronary stents that even though the stent prices have been reduced after intervention of the court, the benefit to the patients has not been equivalent because many health providers in the private sector increased their procedure charges. This needs to be monitored by comparing the charges levied before and after implementation of the code so as to ensure the benefit to the patients. Price of the drugs should be calculated on the basis of cost accountancy. The manufacturer, stockist and the retailer can be given a justifiable profit margin.
Law in this case should apply to both branded generics and branded medicines so as to remove discrepancy in the actual price and MRP in case of branded generics, which is to the tune of 1000 % in some cases. In fact, there should be one drug - one name - one price formula. There should be no branded generics. The generic should mean pharmacological name and should be sold like that.
All medicines should be declared to be essential as any chemical once it is termed as medicine, is to be given on prescription only and is not patient’s choice any more.
To achieve the objective of affordable drugs it is pertinent that public sector drug companies should be strengthened as they have produced cheap bulk drugs for the whole world and have also effectively participated in all national health programmes. (IPA)

Thursday, 10 May, 2018