Professional Documents
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--Anurag Bhargava
There is increasing concern about the rising costs of health care in India. National
Sample Surveys from the mid 1980s and 1990s point to significant increases in the cost
of both in-patient and out-patient health care in rural and urban areas. Drug costs and
rising fees for different health services undoubtedly played a major role in this.
According to NSS data, in the 1990s. Compared to 1986-87, the proportion of those who
said they were unable to access health care because of 'financial reasons' went up
significantly in both rural and urban areas.
With the objective of making essential drugs available to the people, the Government has
been implementing drug price control orders (DPCO) since 1979. The first order covered
347 drugs and included all the drugs, which were deemed essential to meeting India’s
public health problems. But over the years, with the changing socio-political climate and
perhaps pressure from the influential pharmaceutical industry, the span of these price
control orders has been reduced successively. Another regressive trend has been the
increasing divergence between the priorities of public health in India and the drugs
covered under the DPCO.
The 1995 drug price order is the last price control order to have been implemented. It was
the first such order in the decade of accelerated economic reforms in the country. It was
decided in 1994 (as described in the modification of the drug policy 1986) to employ
criteria based on retail sales of drugs as recorded by a private organisation ORG to decide
the list of drugs to be brought under price control. Only drugs with annual turnover
greater than 4 crores, where there was insufficient competition (defined by one
formulator having more than 40% share of the market inspite of having at least 5 bulk
producers and 10 formulators) were to be considered for price control. Monopoly
situations in which any formulator with an annual turnover greater than 1 crore in which
a single formulator had more than 90% share were also to be covered under price control.
All other drugs and formulations were to be exempt from price control. The policy
modification of the drug policy 1986 and the order did not take into account any other
factor like the essentiality of the drug, and its need for meeting the priority health care
needs of people.
The application of these criteria in the 1995 order saw the number of drugs whose prices
were regulated cut to 74 from the previous 142, covered by Drug Price control order
1987. But what did it do to the drugs which are needed to meet the public health
problems? An analysis of the list of drugs listed for price control in the DPCO (Drug
Price Control Order) 1995 is necessary to understand the danger and irrelevance of the
economic criteria in the 1995 drug policy. as also that which is offered in Pharmaceutical
Policy 2002
What is striking in this analysis is that the drugs for a majority of public health problems
are either under-represented or unrepresented, which is a matter of serious concern. Also
we find that many drugs are surprisingly included in the list even if non-essential, or
even hazardous in nature. The reader is invited to study Table 1.
Table 1: Public Health Problems and their Absence in the Drug Price Control
Basket
The authorities of the Govt of India seem to have erred seriously not only by excluding drugs
which were required in the interest of public health in India but also including in the list many
drugs, which are non-essential, outdated and even hazardous. See Table 2.
If a list can exclude essential drugs for public health problems like ORS, drugs for
anemia, drugs for tuberculosis, malaria, leprosy, filariasis, vaccines for killer diseases,
drugs for major non-communicable diseases like hypertension, coronary artery disease,
cancer, and exclude a drug like paracetamol, then what is the relevance of such a list for
India?
If a list can include drugs like analgin, which is banned almost all over the world, include
a drug like Vitamin E, which has no clear therapeutic value, rather than Vit. B12 and Vit.
D which do have, and include a host of non-essential and even hazardous drugs at the
cost of drugs which have been mentioned above, then is the logic or rationale behind the
framing of such a list not deeply flawed ?
The process of selection of drugs for the 1995 list is clearly against all priorities of public
health in India. It results in essential drugs to be used in public health problems escaping
price control and becoming more expensive. The perpetuation of this use of selective and
arbitrary market sales and share based criteria in the pharmaceutical policy 2002 is bound
to worsen the divergence between public health interests and the policy which was
supposed to serve them. The pharmaceutical policy of 2002 does intend to apply these
criteria to the National Essential Drug List of 1996, but given the kind of turnover and
share based criteria which are now being suggested in the Pharmaceutical policy it will
again produce anomalous price control orders with lists of drugs like the one of 1995..
In a country like India where 40% of the people live below the poverty line, who have
make virtually all the expenses for health care out of pocket, where communicable
diseases kill hundreds of thousands of people annually, public health interests should
dictate the framing of the drug policy rather than arbitrarily defined sales criteria based
on turnover.