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Unfair trade practices plague pharma sector

Unfair trade practices plague pharma sector

In India, a silent crisis in access to quality and affordable medicines confronts most patients who seek treatment for various diseases. It is estimated that 80 per cent of the cost of patient care pertains to drugs, quality of which is suspect. Hence, prescribing, dispensing, utilisation and the therapeutic effects of drugs need to be surveyed and audited regularly to ensure rational drug use. It is alleged that the pharmaceutical sector is the most powerful industry, which can bribe at every level to get approvals or to push sales. Even the consumers are shown green pastures to artificially generate demand. They have no concern for health or life, patients are often fed on unsafe, spurious or adulterated drugs with impunity to earn undue profits. Regulatory measures to ensure quality and affordability leave much to be desired. Failures in governance and regulatory environment have contributed to high cost and poor efficacy of various medications. There is a rampant misuse or excess use of prescription drugs.

The Drugs Controller General of India (DCGI) heads the Central Drug Standards Control Organization (CDSCO), which oversees the process of approval of medicines. Drugs and Cosmetic Act, 1940, amended from time to time, was enacted to regulate the import, manufacture, distribution and sale of drugs, but failed to achieve the desired objectives. Drug Price Control Orders (DPCOs), which are issued by the Ministry of Chemicals and Fertilizers, in exercise of the powers conferred under Section 3 of the Essential Commodities Act, 1955, enables the government to declare a ceiling price for essential medicines so as to ensure their availability and affordability. The National Pharmaceutical Pricing Authority (NPPA), which controls the price of only 18 per cent of the products, laid down three key principles: a) Essentiality of medicines; b) market-based pricing to non-scheduled drug, to ensure growth of the pharmaceutical industry; c) price control only on formulations and not generics. However, there is no control on the launch price of non-scheduled medicines. This lacuna has made most medicines expensive. Also, the responsibility regarding the efficacy or safety is not fixed on anyone and the drug houses are not mandated to disclose all the side-effects of its products.

The NPPA, in exercise of its powers, raised the price of 21 essential drugs by 50 per cent on December 13, with the observation— “Unviability of these formulations should not lead to a situation where these drugs become unavailable in the market and that the public is forced to switch to costly alternatives”.

When a company develops a new drug, often after years of research, it gives a brand name and applies for a patent, which prohibits anyone else from making the drug for a fixed period. To recover the cost of research and development and marketing to build reputation, companies market their branded drugs at a high price. Once the patent expires, other manufacturers are allowed to duplicate and market their own versions of the drug. This is called branded generics. Such branded generics are also sold at high price, as innovator products. There is a caveat. “A critical cause of concern is that generics are not bio-equivalent to the branded drugs,” observed a former director general of the ICMR. Why can’t the government ensure the quality and bio-availability of generic drugs at par with the branded to ensure quality at affordable prices? This is an urgent public health and ethical need.

Katherine Eban’s book Bottle of Lies lays bare the fact that at least 50 per cent of the family spending on patient care is on unnecessary medications or investigations. The book documents how the American Food and Drug Administration’s investigators discovered falsified records at Indian plants. When a batch would fail testing, rather than destroy the batch or remedy, the manufacturing process and the quality control staff at these plants manipulated the records that supported releasing the batch to the market. There are only 860 (2019) drugs on India’s essential medicine list, yet there are over 60,000-80,000 brands of drugs available to test. But the facility of testing is far less than 1 per cent of the lot and the remaining 99 per cent are declared as of good standard without any scrutiny.

Other unfair practices include promoting drugs with false claims and misguiding names, providing kickbacks and other incentives to the doctors for more prescriptions. Excessive reliance on incentives in lieu of prescriptions has made the doctor-pharmaceuticals relationship ‘transactional’ or pathological. The retail price is marked steeply, varying from 100 per cent to 5,000 per cent. Leading companies are selling the same drug in the same dosage under different brand names and at widely different prices, as revealed by the NPPA. Cipla for instance, sells the anti-allergic Cetirizine at Rs 30 under the Alerid brand and at Rs 2.20 under the name Okacet for 10 tablets. Glaxo’s antibiotic Augmentin is priced at Rs 202 for six tablets, while the same drug sold by Mankind under the brand Moxikind-CV costs Rs 55 for six tablets.

The biggest scam, however, is pricing and marketing of generic preparations. Generics are labelled at nearly the same price as branded, but the cost is a fraction of the branded. A tablet intended to be sold for Re 1 may be labelled as 20. This leaves a big scope for manipulation by the chemists, who may sell it at a written price or give a nominal discount, pleasing the patient while fleecing him. Unfortunately, patients often perceive that if the price is low, then the medicine is of poor quality. A committee headed by Ranjit Roy, formerly at the PGI, found deficiencies like the sale of banned drugs and drugs with no efficacy, sale sans prescriptions and medicines without diagnosis.

Dr R Kumar
President, Society for Promotion of Ethical and Affordable Healthcare

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