Access to essential medicnes: Does the pharma sector need more regulation?

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Does the pharma sector need more regulation?

DEBATE: Business Standard / New Delhi January 23, 2008

The industry is under a cloud with the process of patent grants under

question and a Group of Ministers examining pricing issues.

Leena Menghaney India co-ordinator, Campaign for Access to Essential

Medicines (MSF)

" With the price control list reducing, prices are spiralling —

Roche's drug for Hepatitis C costs Rs 200,000 for a six-month

treatment "

As a medical aid organisation providing treatment in developing

countries, Medecins Sans Frontieres (MSF) is often faced with the

issue of the unaffordability and unavailability of essential

medicines. In fact, in the treatment of HIV/AIDS, these concerns are

raised not only by our doctors but also by patients and governments

themselves. Pharmaceuticals is a sector of vital importance for any

government as it is directly related to the public right to access

affordable medicines (an essential commodity). It is regulated and

monitored in Canada, Europe and, for the past three decades, in

India.

In India, access to affordable medicines has long been dependent on

government regulation of the patent system and pricing of essential

drugs in the domestic market. This has made India self-reliant in the

manufacture of drugs, and not only benefited Indian patients but also

increased access to essential medicines for patients in developing

countries. In the last decade, however, India has been slowly

changing its policy of government regulation of the pharmaceutical

sector. While measures to control the prices of drugs have decreased

drastically in the last decade, a product patent regime that

establishes a market monopoly to sell a patented drug has been

implemented in 2005.

Therefore, Roche remains unchecked when it prices peginterferon alfa-

2a (Pegasys), a new generation Hepatitis C therapy patented in 2006,

at about Rs 200,000 ($5,000) per six-month treatment course. The

excuse — the National Pharmaceutical Pricing Authority cannot

regulate the prices of essential medicines, unless they are included

in the price control list of essential medicines. The list, of

course, is in decline and has not been reviewed in the past few

years.

More recently, a Task Force was set up for `Making Available Life-

saving Drugs at Reasonable Prices' in April 2005. Pronab Sen, member

of the Planning Commission, submitted the Task Force report to the

Department of Chemicals & Petrochemicals. Since then the government's

policy document on pharmaceutical regulation and pricing,

the `National Pharmaceutical Policy, 2006' has been under review. In

the meantime, essential drugs continue to be patented and become

unaffordable.

To address such pricing barriers to treatment, patients and public

interest groups have been advocating for a revival and reform of the

government's policy on price monitoring and regulation. They believe

that a number of strong measures to make drugs affordable and

available can be immediately taken which include price control,

revival of public sector manufacturing and issuance of compulsory

licenses under the patent law.

Such measures and government regulation are not uncommon in other

countries as well. While Canada negotiates the price of medicines at

the time of marketing approval, Thailand and Brazil have invoked

compulsory licensing provisions to make drugs more affordable.

_____________________________

Gajanan Wakankar

Executive Director, Indian Drug Manufacturers' Association

" Reducing price control spurred growth in production, and so, prices

here are the lowest in the world. Don't reverse this. "

In the case of patents, our law is adequate. The necessity is to hold

it and resist the attempts of MNCs which are trying to change the

patentability criteria to their advantage. Although our law can be

made even more people-friendly by simplifying compulsory licensing

and pre-grant opposition procedure by using all available TRIPS

flexibilities, we do not want to go in for any change at this stage

till we have sufficient experience of the law as it stands.

Application procedure and records, however, need to be digitised to

make patent examination easier and quicker.

Indian drugs have acquired a good reputation the world over. This is

evident from the fact that our exports are rising, that too to

developed countries. We have the largest number of firms with US FDA

registration and this shows that our quality is of the highest grade.

Our exports of drugs and pharmaceuticals have risen from almost nil

in 1960 to Rs 31,000 crore in 2006-7. The current R & D spend, which is

2-3 per cent of the turnover, is expected to go up to 5 per cent by

2010. Quality-wise, there is no let-up and new regulations such as

the new Schedule `M' ( good manufacturing practices), Schedule `Y'

(clinical trials regulations) and the latest regulations on `good

laboratory practices' have been accepted by the industry.

However, the pricing issue in pharmaceuticals is causing worry. It is

well-known that due to progressive de-control in this industry, our

production of drugs and pharmaceuticals has grown tremendously. From

a meagre Rs 5,700 crore in 1991-92, production has gone up to Rs

68,598 crore in 2006-07.

Indian prices are already low, perhaps the lowest in the world. For

example, a pack of 10 tablets of 500 mg Ciprofloxacin (an antibiotic)

is available in India for less than Rs 25 as against an equivalent of

90 in Pakistan and 480 in the US. This has happened because the span

of price control has been progressively reduced from 345 drugs in

1979 to 74 today. And the result is an all-time high growth rate with

the lowest possible prices and best quality.

With this background, is it not surprising that the government is now

insisting on cost-based price control and increasing regulation in

the name of reducing prices of medicines? We are not against

increasing efficiency which results in lower costs and the resultant

lower prices, but the government's insistence on bringing them down

forcibly through regulation may actually kill the proverbial golden

goose. This is also against the present trend towards liberalisation

and de-control the world over.

In conclusion, I would like to emphasise that the government should

only try to monitor prices to check any abnormal price rises, rather

than imposing a blanket cost-based price control. A policy of such

wide-ranging price control would result in a reduction in R & D and

investment, and affect the industry adversely.

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