Fiscal concessions can drive down drug prices

December 18, 2003

EDITS & COLUMNS

Aid For AIDS: Fiscal concessions can drive down drug prices

World AIDS Day served as an official reminder of the HIV/AIDS

epidemic in the country, which has infected between 3.82 to 4.58

million people by the end of last year, according to the AIDS

Epidemic Update 2003 issued by UNAIDS and the World Health

Organisation. And as per the National AIDS Control Organisation

(NACO), HIV/AIDS is no longer confined to vulnerable groups and urban

areas but is gradually spreading into rural areas as well. Thus while

Andhra Pradesh, Karnataka, Maharashtra, Manipur and Nagaland recorded

HIV prevalence rates among pregnant women over the 1 per cent

threshold, in Gujarat and Goa the prevalence rate among high-risk

groups was above 5 per cent. But what has India accomplished so far

in its war against the scourge? To be fair, HIV/AIDS has now firmly

established itself on the political radar in this country, a

development which doubtless complements efforts of NACO and NGOs.

Second, a vaccine development programme — a joint initiative of the

Indian Council of Medical Research, NACO and the International Aids

Vaccine Initiative — is on track even as the pharmaceutical sector

has done much to ensure global access to anti-retroviral drugs

(ARVs).

ARVs, of course, don't cure an individual of AIDS but, in reducing

susceptibility to opportunistic infections, result in lower medical

costs as well as improved quality of life. It was Cipla which slashed

the price in year 2001, of its three-drug ARV cocktail, to close to

$365 per person per year as opposed to the $12,000-$15,000 price tag

prevailing at the time. And only last month did three Indian drug

companies, together with the Bill Clinton foundation, agree to reduce

prices further — down from a dollar a day to 38 cents per person per

year, for sufferers in Africa and the Caribbean. Now, the Union

health ministry hopes to get drug majors to lower prices further, to

about 20 cents per person per year, following which the cocktails

will be provided gratis starting April next year. Bulk purchases and

confirmed orders aside, access to cheaper raw materials can

definitely drive down prices further. In this regard, fiscal

concessions such as excise and sales tax cuts et al can have the

desired outcome and the Union finance ministry must make them

available to industry. AIDS is a national crisis and the health

ministry's efforts ought to be complemented by all.

Recommended Posts