Regulate prices of essential drugs

The government has only itself to blame for the indictment it suffered at the hands of the Supreme Court on Tuesday. Its impatience over the government’s failure to evolve a proper drug pricing policy was palpably evident when it gave the government four weeks’ time to come up with a response. Drugs commonly used by poor people for a variety of ailments have gone out of their reach and the government cannot claim that it is not aware of this situation. A standing committee of Parliament had in 2005 and 2010 reported that the most commonly used drugs have become unaffordable to the poor.

Far from taking remedial action, the government has allowed the situation to deteriorate as can be inferred from the fact that the number of essential medicines under price control decreased from 347 to 76 over the last two decades. The reasons are not far to seek as it is a measure of the influence the drug industry wields on the government. Unlike in many countries where drugs are bought in bulk by the government and distributed through its agencies, in India, even most of those who depend on government hospitals have to buy medicines from the open market. It is, therefore, no surprise that medicine cost accounts for 50 to 80 per cent of the cost of healthcare.

What’s worse, the high cost of medicines is second only to dowry in causing rural indebtedness. There is considerable scope for reducing the prices of common drugs which, for instance, do not need any costly advertisement. Also, fancy packaging can be dispensed with to reduce the cost of manufacture. Some states have started forcing government doctors to prescribe only medicines by their generic names. The government medical system on which only a little over one per cent of the gross domestic product is at present spent needs to be strengthened so that the poor are not left to fend for themselves. The group of ministers finalising the national pharma pricing policy should take into account all these issues.