<div><em>Decrease in sales of price controlled drugs and growth in non-controlled drug launches are unfair in nature and should be prevented, writes <strong>CH Unnikrishnan</strong></em><br><br><br>Drug market researcher IMS Health’s recent study on the impact of drug price control on access to medicines in India shows 7 per cent decline in consumption of price controlled drugs in the rural markets. It also shows the sales of medicines outside price control have gone up by 5 per cent since the implementation of the latest drug price control order (DPCO) in July 2013.</div><div> </div><div>It is a fact that the price reduction can’t alone ensure increased access to medicines in India where shortage of healthcare infrastructure and limited market reach of drug makers remains unresolved.</div><div> </div><div><table align="right" border="1" cellpadding="1" cellspacing="1" style="width: 200px;"><tbody><tr><td><img alt="" src="http://bw-image.s3.amazonaws.com/unni-small.jpg" style="width: 200px; height: 200px; margin: 1px; float: right;"></td></tr><tr><td><strong>C H Unnikrishnan</strong></td></tr></tbody></table>But, the new study’s conclusion that price control measures are ineffective and unsustainable on the basis of these market data is unfounded and is directed to a malicious intention of discouraging the government from such market intervention. </div><div> </div><div>Both these trends, decrease in sales of price controlled drugs and growth in non-controlled drug launches, are unfair in nature and should be prevented. Government should come forward to reinsure the real purpose of drug price control.</div><div> </div><div>The IMS study indicates that the sales of price controlled drugs have fallen and others have gone up because the drug companies are moving out of the price controlled portfolio and focusing more on non-price controlled brands. According to the IMS report, the small and medium companies who largely supply to the rural markets have found their business unviable in the price controlled category and were “forced out” from this segment and the sales in the non-controlled group increased as new launches in this category were high during this time.</div><div> </div><div>As a matter of fact, the drug price control order of 2013, which brought all the 348 drugs included in the National List Of Essential Medicines (NLEM) and their formulations under the ambit of the price control order, had very specifically put the condition that the drug companies should not withdraw their products from the market for at least five years without adequate reasons approved by the government.</div><div> </div><div>Also, there aren’t many new molecules (not included in NLEM) which invented and introduced in the market recently for the generic companies to increase their non-price controlled launches, especially in a patent protected market.</div><div> </div><div>Therefore, two key questions; How did these price controlled drugs started vanishing from the market? And, where did these new launches in the non-controlled category came from?</div><div> </div><div>Strangely, IMS Institute India, which conducted the study, tries to establish that price control is neither an effective nor sustainable strategy for improving access to medicines for Indian patients.</div><div> </div><div>The study, 'Assessing the Impact of Price Control Measures on Access to Medicines in India’, claims that it was based on both extensive quantitative data analysis of growth and volume trends and in-depth qualitative interviews with industry stakeholders and policy makers. The numbers shown in the report (if true) proves the veracity of the claim. But, it somehow fails to explain the conclusion that drug price control order is not effective and sustainable in a market where the providers are not very transparent on their cost and profitability.</div><div> </div><div>Prior to DPCO 2013, the prices of many drug formulations of same molecules in India varied from 10 per cent to 300 per cent. Although the industry argues that the investment on quality standards also vary from manufacturer to manufacturer, the fact remains that it cannot vary so much considering the standard cost of the generally mandated Good Manufacturing Practices (GMP) laid out by India’s regulator (under Schedule M) or the World Health Organisation (WHO).</div><div> </div><div>Nevertheless, the argument of the study sponsor—Organisation of Pharmaceutical Producers of India (OPPI) that the government intervention in pricing is irrelevant as it should be left to the market mechanism (competitive pricing) also fails to differentiate the healthcare market where consumer (patient) is not the decision maker.</div><div> </div><div>Lastly, the IMS study also says that the primary beneficiaries of the DPCO 2013 price controls have been high income patient populations, rather than the low-income targets.</div><div> </div><div>This can be largely linked to the poor market reach of drug makers in India, which has been the case even earlier. India, where drug prices are the lowest in the world thanks to predominant generic presence and a persistent price control regime, still claims only 30 per cent of its population having access to modern medicines due to poor distribution and limited infrastructure. Therefore, the focus should be targeted at expanding market reach and not at shelving price control orders.</div><div> </div>
