Healthcare workers stress need for independent data on medicine prices

P. T. Jyothi Datta Mumbai | Updated on March 12, 2018 Published on January 15, 2012


Say IMS data do not reflect discounts, rebates and bundling deals at retail level

The incongruity of scrutinizing medicine prices based on information gathered from the pharma industry has come in for criticism from healthcare workers.

While the recently circulated draft National Pharmaceutical Policy has elicited responses along the predictable multinational-domestic industry divide, healthcare workers have echoed the World Health Organisation's concern on using only IMS data to check drug pricing.

The absence of publically available data makes independent analysis impossible, a seasoned healthcare worker told Business Line.

In its response to the Government, the WHO said, “a major problem exists with the method chosen of using IMS Health data”, as the data is proprietary in nature and available only at high cost. “IMS Health collects medicine volumes and prices at one point in the supply chain, usually at the wholesaler level.”

While its volume data is reliable and difficult to falsify, its pricing data has limitations, the WHO said. “Their data does not take account of discounts, rebates and bundling deals and when the data is collected at the level of the wholesaler they estimate the retailer and patient prices,” it pointed out.

“Also, by limiting the price collection source to India, the DoP (Department of Pharmaceuticals) may miss national anomalies in which specific high volume products such as ciprofloxacin are charged at higher prices than in neighbouring countries such as Sri Lanka or Nepal,” it added.

While the policy does suggest that the National Pharmaceutical Pricing Authority would check this data by survey and evaluation, there is no commitment on placing this information in the public domain. And without such transparency, it would be impossible for outside organizations or companies to check whether the NPPA has been correct in fixing the ceiling price, it added.

Conspicuous absence

On a proposed policy governing medicine prices — the voice of humanitarian organizations and patient groups (usually vocal on drug prices and patents) are conspicuous by their absence. The Government needs to go after trade margins and promote the prescription of low-cost generic drugs if it wants to make a difference in healthcare delivery, a representative with a humanitarian organization said.

Patent drugs and their pricing have not been addressed; medicines for critical and highly prevalent conditions in India, such as cancer, mental illness, malaria and diabetes are not covered; and the proposed system of fixing the average of the top three brands as the ceiling price could lead to cartelization, the representative pointed out.

To the oft repeated observation that companies will stop producing drugs that are under price control, there are suggestions that Government incentivize companies that indeed produce drugs that are under price control.

Industry voices

A section of the domestic industry says that span of control could well increase to 75 per cent of medicines in the market. Domestic price reductions will result in a loss of about Rs 3,000 crore to the industry, the Indian Pharmaceutical Alliance said.

Multinational drug-makers have, among other things, also called for bulk drug prices to be brought under the scanner, as the proposed policy looks at only finished drugs.

The proposed policy brings all 348 drugs in the National List of Essential Medicines, about 60 per cent of the retail market under price control.


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Published on January 15, 2012
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