Tag Archives: Essential Drugs

Civil society letter on NPPA’s action on price control

Shri Ananth Kumar
Hon’ble Minister of Chemicals and Fertilizers
Udyog Bhavan
New Delhi 11001
20 August 2014
Dear Ananthji,


The National Pharmaceuticals Pricing Authority (NPPA), on July 10, 2014, released a new set of price notifications for 50 cardiovascular and diabetes medicines under paragraph 19 of the Drug Prices Control Order (DPCO), 2013. The notifications for the 108 formulations (two were subsequently withdrawn) of these selected medicines are in addition to the notifications for essential medicines declared under the DPCO 2013. We note that the earlier notifications for essential medicines excluded several dosage forms and strengths because they did not feature in the National List of Essential Medicines (NLEM), 2011. Thus the recent notifications were necessary to cover more of the strengths of medicines than that are listed on the NLEM. In addition, the notifications also covered medicines in the cardiovascular and diabetes therapeutic categories that are not included in the NLEM.

We the undersigned civil society organizations welcome the initiative of the NPPA to cap the prices of formulations involving essential and lifesaving medicines that fall outside the NLEM as a first step towards the institution of a robust, pro-public health policy of drug price control. This is an action that truly interprets the spirit of the Drug Prices Control Order, and its underlying legislation the Essential Commodities Act, 1955. In the past, despite its attention being drawn to the profiteering in medicines not listed in the DPCO, the government had looked the other way.

We are surprised at the misinformation being spread by the Pharmaceutical Industry in this regard, and its efforts to prevent relief to the consumer by filing petitions in the high courts in Mumbai and Delhi. Industry has challenged the legality of fixing the prices of the 50 medicines under Paragraph 19 of the DPCO 2013 when in fact the Government has in successive drug price control orders always retained the power to intervene in prices in the public interest in the light of evidence of overpricing.

Limiting all price regulation only to a list of 348 medicines and specified dosages and strengths in the DPCO 2013 goes against the policy objective of making medicines affordable to the public. The National List of Essential Medicines, a list of 348 rational and cost-effective medicines, is not the basis for production, promotion and prescription in India. In reality the most frequently prescribed and consumed medicines are not listed in the NLEM.

Industry has claimed that this will cause an annual loss of revenues of over Rs.600 crores. NPPA’s action on the market will however be marginal, and nowhere near the doomsday predictions of the industry. It will affect only those brands that were selling at very high prices. We have analysed the impact of the notifications and found that the retail market of Rs.77,526 crores (Moving Annual Total, June 2014) would experience a loss of  Rs. 350 crores (AIOCD-AWACS, PharmaTrac Data, 2014).  This represents a loss of approximately only 2% (Rs. 112 crore) in the anti-diabetic therapy segment and 2.5% (Rs. 238 crore) in the cardiac therapy segment. This in a way establishes the excess profits of the industry in those particular formulations by overcharging the patients.

Also the market based price fixation being followed by the NPPA, a departure from the long used cost-based price control mechanism, is irrational and means that the ceiling prices are still very high. Many medicines are sold by reputed companies much below the NPPA ceiling price. The ceiling price of atorvastatin 40mg is Rs. 22.02 per tablet while Biochem Pharmaceutical is selling the same at a much lower price of Rs. 14.94 per tablet. The ceiling price of glimepiride 3mg is Rs. 10 per tablet, while Ipca Laboratories is able to sell it for Rs. 6.90 per tablet. As per our calculations only a little over one fourth of packs selling on the market will need to revise their prices downwards because they were originally priced higher than the notified price. This is evidence that there is a scope for significant reduction in NPPA ceiling prices, without affecting the reasonable profits of the industry.

We also note that the notifications have not included fixed dose combinations in the cardiovascular and diabetes therapeutic categories whereas the sales of many combinations exceed those of the single molecule medicines.

We also raise the argument that fixing of ceiling prices of all the other dosage forms of all medicines under NLEM cannot be neglected. Here again the same phenomenon of overcharging remains. NPPA should come out with similar action to cover all dosage forms and fixed dose combinations containing one or more medicines under NELM, and as well as bring other essential and life saving medicines under price control immediately.

Although this notification of NPPA will give some relief to patients in the chronic disease sector in the present context, it should be expanded and rationalized. We request the Government and NPPA to strongly defend its stand and also consider the actions suggested by us to promote public health.


All India Drug Action Network (AIDAN)
Jan Swasthya Abhiyan
Low Cost Standard Therapeutics (LOCOST)
Medico Friends Circle
Third World Network- India
All India Peoples Science Network (AIPSN)
National Working Group on Patent Laws

Copy to:
Hon’ble Shri Narendra Modi, Prime Minister of India
Hon’ble Shri Dr. Harsh Vardhan, Minister of Health and Family Welfare
Mr. Nripendra Misra, Principal Secretary, Prime Minister’s Office
Mr. Lov Verma, Secretary, Department of Health & Family Welfare, Ministry of Health & Family Welfare
Ms. Aradhana Johri, Secretary, Department of Pharmaceuticals, Ministry of Chemicals & Fertilizers
Mr. Injeti Srinivas, Chairman, National Pharmaceutical Pricing Authority, Department of Pharmaceuticals, Ministry of Chemicals & Fertilizers

For further information, contact:

1st Floor, Premanand Sahitya Bhavan
Dandia Bazaar
Vadodara, Gujarat – 390001
Ph: 9998771064
Email: chinusrinivasan.x@gmail.com

Jan Swasthya Abhiyan
National Secretariat
c/o Delhi Science Forum
D-158, Lower Ground Floor
Saket, New Delhi 110017
Ph: (011) 26524323, 26862716
Email: jsasect.delhi@gmail.com


Generic Dava – Isse Behtar Kuchch Nahi…


Ensuring affordability, accessibility and safety of medicines through urgent action

Health Action

Health Action

Health Action (HA) has published articles relating to essential medicines, generic medicines, drug price control and other drug related issues in its September 2009 issue. Some of the relevant articles have been uploaded here (with permission from HA).

Dubious Rather Than Spurious Drugs – India’s Real Drug Problem
Dr Anurag Bhargava M D

Access to medicines implies access to medicines of proven efficacy, safety and acceptable quality, prescribed in a rational manner. Governments have a responsibility of ensuring availability and affordability of such medicines. Yet the situation in India with all these issues related to medicines is marked by paradoxes. In spite of having one of the largest pharmaceutical industries supplying low-cost essential medicines globally, India has the largest number of people in the world without access to essential medicines, …………

People’s Initiative for Generic Medicines
Dr. Anant Phadke

In India, medicines are unnecessarily exorbitantly costly. Prices of medicines can be brought down to one half, even to one-fourth immediately, if the government takes appropriate measures to stop reckless profiteering and waste that are prevalent in the manufacture and sale of medicines. Since the early eighties, the All India Drug Action Network (AIDAN) has been advocating these measures, but in vain. While it may take many more years to change the govt…….

Essential Medicines: Economic constraints in access in India
Dr. Purnabrata Gun & Sushanta Roy

Essential medicines are among the most costeffective elements in modern health care and their potential health impact is remarkable. This year alone, there will be over 40 million deaths in developing countries, one-third among children under age five. Ten million deaths will be due to acute respiratory infections, diarrheal diseases, tuberculosis, and malaria. Safe, inexpensive, essential drugs can be life-saving in all these disease conditions……..

Good to be True, but True! Retail Sale of Generic Drugs at Low Prices by the Government in Chittorgarh Dt

We all know that one of the solutions for making medicines affordable to people is to make available only essential generic drugs at lower prices, that is if your doctor prescribes them in the first instance. Procurement prices of generic drugs by Governments like that of Tamil Nadu and Delhi have revealed that prices of generics are 1.5 % to 10 % of the maximum retail price (MRP) of branded equivalents at the retail level. However, to get a retail pharmacist to stock these low-priced generics is easier said than done…..

Drug Price-Control: Problems, Principles and Prospects
Dr Chandra M Gulhati

One way or the other, prices of many sensitive goods and services are subject to some sort of price regulation either through state’s intervention or other mechanisms including competition, negotiated prices by bulk buyers, reimbursement by insurance companies just to mention a few…………

To download the entire issue of Health Action, September 2009 issue, click here





“We knew that the actual cost of most of the drugs is very low. But, these were not available to patients at low rates because of three obstacles:…………….. So, the district administration adopted the following strategy to provide low cost medicines to the patients.”

These are some excerpts from the booklet “MAKING MEDICINES AFFORDABLE – Reaching the Unreached” – documented by Dr. Samit Sharma, Collector and District Magistrate, Chittorgarh. To know about the strategy or to download or read the booklet, click here

To know more about the low cost medicines initiative in Chittorgarh, click here

To see the comparisons between printed M.R.P. of medicines and prices at CHITTORGARH SAHAKARI UPBHOKTA THOK BHANDAR LTD., CHITTORGARH, click here

Essential Drugs

The root causes of ill-health developing (and underdeveloped) countries like India, are malnutrition, lack of clean water and sanitation, and unemployment. With a population of more than 100 crores, India accounts for about 16 percent of the global population. India is country where 37% of the population still lives below the poverty line and where the proportion of out-of-pocket expenses out of the total expenditure on health in one of the highest in the world; with only 17% of the expenditure contributed by the government (figures from the National Health Policy 2002).

Load of Diseases in India

  • Tuberculosis 1/3 of world’s cases: 15 million cases. Largest number of multi-drug resistant cases.
  • HIV/AIDS. Second highest in the world: 3.5 million persons.
  • Acute respiratory diseases: 950,000 deaths per year.
  • Acute diarrhea: 19 crore-illness episodes per year and an estimated mortality of 1 lakh children per year.
  • Malaria especially falciparum malaria is a public health problem with an estimated 2-3 million cases per year and a mortality rate of 20,000 per year.
  • Kala-azar is a significant public health problem in certain states and causes.
  • Parasitic infections include hookworm infections, which contribute in an manner to way to iron deficiency anemia and filariasis.
  • Hypertension:20-40% in urban areas, 12-17% in rural areas.
  • Cardio-vascular diseases:31.7% of all deaths in 2000.
  • Cancer: Estimates of age standardised rate of cancer range from 99.0 to 129.6 per 100,000 in males and 104.4 to 154.3 per 100,000 in females. 7 lacs new cases per year and cause for 7.4% of all deaths in 2000.
  • Chronic respiratory diseases: 65 million cases and cause for 2.5% of all deaths in 2000.
  • Anemia: Anemia is a major public health problem in women and children with a prevalence of 74.3 in children of 6-35 months and a prevalence of 49-56% in women. (NFHS 1998/99) Anemia contributes to 1/3 of maternal mortality.

(Source: Abdul Ghaffar, K. Srinath Reddy and Monica Singhi: ‘Burden of Non-Communicable Diseases in South Asia’, BMJ, No.7443, 3 April 2004)

Why We Need Only Essential Drugs?

Increasing Drug costs to the user.

Nearly 50% of healthcare costs are contributed by expenditure on drugs. NSSO surveys reveal figures of up to 80 percent in rural areas. In a study done for the WHO on treatment costs incurred by the patients with TB, it was found that 60% of the costs were contributed by drug costs.  With the rise in health care costs the number of persons who do not seek treatment because of economic reasons has risen in both the urban and rural areas (NSS 52nd round), which is disturbing. According to a World Bank study, as a result of the costs of a single hospitalization, 35% of people fall below the poverty line.

Anatomy of a Health Disaster.

By P. Sainath

Janreddy’s family survived crop failure. But debts of 300,000 to cover health costs have nearly destroyed them. Loans taken to cover health costs have been a major contributor to the debt-suicide cycle in Andhra Pradesh.

Janreddy sat wracked with pain, a picture of ill health. “Why isn’t this man on his way to hospital.” We asked the neighbours crowding around his bed. Well”, they said nervously, “We just brought him home from one. He was there for days. This family has already lost all its money on hospitals.”

Janreddy died ours after we met him. His daughter-in-law, who became a bonded labourer to keep the family afloat, will remain one till debts of Rs.500,000 re paid off. Over Rs.300,000 of that was incurred on medical costs. His wife, who d donated one kidney to her son – both of his had collapsed – does any work she can find. The son, Narsi Reddy, confined to the house, has to drink only the purest water in a place where there is none. His medicines cost around Rs.1000 a month.

The huge medical bills of this family of six were incurred despite the son getting free operations at the Osmania Government Hospital in Hyderabad. They had first gone to private hospitals for check-ups, a biopsy and other tasks. As the costs mounted they sold off land and cattle to meet them. That Narsi Reddy had sunk four borewells didn’t help. All of them failed. Crisis on their four-acre farm in Chelliagudam village of Nalgonda district saw Janreddy’s health also cave in. “They might just have survived the crop failure, “ say the neighbours, “but their medical costs destroyed them.”

Health spending is amongst the fastest growing components of rural family debt. For years, the state boosted the private sector in health, promoted corporate hospitals and pioneered the ‘user fees’ system in government ones.

“The Chandhrababu Naidu government dismantled the public health system,” says M. Geyanand, a leading doctor from Anantapur district. Geyanand is also state president of the Jana Vignyana Vedika (JVV), a body that aims to promote popular science and the scientific temper. “Ninety per cent of patients who go to public hospitals are poor. When that system fails them, they turn to private ones at a huge costs often count as much as 20-25% of the total expenditures of such households. And a single medial emergency can ruin them.”

A common thread running through the farmers’ suicides plaguing the states has been very medical spending. Just five households affected by such deaths had health costs totaling around Rs.400,00. All of them farming families who held between half-an-acre and three of land (some of that mortgaged). Janreddy’s family has not seen a suicide. But it fits this profile rather well.

As do countless other poor households. Even last year, we ran into a farmer who had attempted suicide in the Nallamada mandal of Ananthapur district. His friends managed to get him a hospital just in time. The rescued farmer abused his saviours. The reason: The four-day stay and treatment in hospital cost Rs.45,000. “I tried to commit suicide because I could not pay debts of Rs.150,000, he said bitterly. “Now I owe even more.”

Many of those who succeeded in taking their lives in 2004 had huge medical bills. P.Hanumantha Reddy’s family in Nizamabad district owes Rs.200,000. The survivors of A Narasimhalu in Medak have to rustle up Rs.70,000 plus interest. The tab for K. Shivarajaiah’s family in the same district is Rs.50,000. All this was money borrowed at absurd rate of interest.

“There is a link between the suicides and the crisis of health in Andhra,” says Geyanand. “The collapse of the public health system is crucial. In any poor village, you can see people dying of diseases that should not kill them. Malaria is just one example. For years now, all their support systems have been slashed. The costs are so high, they run out of money halfway through treatment. Those who fall ill are selling land, gold, cattle and other assets to pay medical bills. They also take loans they can never repay.”

In the past decade, the little access the poor had to health sharply declined. Gunala Kumar discovered when he had to fork out Rs.40,000 in medical costs to private hospitals in Medak. That remains big chunk in his total debt of over RS.200,000. A debt that caused him to take his own life in Meeradoddi village this month. Like his father who committed suicide last year.

“Maybe it is better to die,” says Yekalapu Husein of Shabuddlapur in Nalgonda. “How will we pay the fees they ask us to at these hospitals?” A toddy-tapper who suffered a fall from a tree while at work, Husein has to run up huge bills himself. Then came his malnourished wife’s illness. His ‘medical debt’ now stands at Rs.200,000. “Even if we get free care at Osmania Hospital” he laughs, “we do not have money for the bus fare to Hyderabad and back.”

In Gedavalli village in the same district, the local rural medical practitioner sold all his land to pay his own treatment costs of Rs.400,000 at a corporate hospital in Hyderabad.

In the years these dramas unfolded, public hospitals were starved of funds, medicines and drugs. Given Rs.600 crore by the World Bank for public health, the Naidu government spent this mostly on buildings. Very few doctors or nurses were recruited. The buildings now show decay for lack of maintenance. Naidu also authored a government ‘tie-up’ with corporate bodies. Under this, employees of the state went to corporate, not public hospitals. The government reimbursed their costs. This meant a windfall for those hospitals. It also meant many scams in the shape of inflated reimbursement bills. Meanwhile, health institutions in the public sphere suffered.

“The introduction of ‘user fees’ made health even less accessible to the poor.” says a Senior IAS officer. The fees have since been withdrawn by the new state government. Also dumped was an idea of handling over some super-specialty department of public hospitals to ‘private management’. That is, to corporate hospitals.

The damage, though, has been done. The medical costs of those who preferred death to debt still plague the living. We pass Janreddy’s wife at the bus stand, looking for any ‘coolie worker’ she can find. There are, after all, bills to be paid.

This article originally appeared in The Hindu, July 1, 2004.

(P. Sainath is Rural Affair Editor of the Hindu. He received the A.H. Boerma Award, in 2001, for his contribution to the development debate in the Indian media. This article first appeared in The Hindu)

Increasing Drug resistance.

A problem, which has complicated the control and treatment of infectious and communicable diseases in India, is the increasing problem of drug resistance in common infectious and diseases of public health importance. Drug resistance have become increasing frequent: chloroquine resistant falciparam malaria, multi-drug resistant tuberculosis TB (new strains resistant to both INH and Rifampicin), in Typhoid new strains resistant to not only to chloramphenicol but increasingly resistant to even quinolones is being seen, resulting in a dramatic escalation of cost, and requiring the use of 3 generation cephalosporins.

Earlier acute respiratory infectious were responsive to the effect of co-trimoxazole, which is an inexpensive drug. Now increasingly resistance to co-trimoxazole is being reported necessitating the use of other drugs for acute bacterial infections in children.

Urinary tract infections are one of the common causes of fever in women. E coli, which causes the majority of these infections, has also shown disturbing levels of resistance, first to co-trimoxazole, and now to quinolones and even cephalosporins.

The problem of drug resistance in common infectious diseases have to be factored in any pharma related policy in India. Repeated and improper uses of antibiotics are primary causes of the increase in drug resistant bacteria. Misuse of antibiotics endangers the usefulness of essential drugs. Decreasing inappropriate antibiotic use is the best way to control resistance. And more importantly making non-scientific combinations of antibiotics, itself the result of a lack of essentials-only policy, increases the possibility of drug resistance.

Poverty amidst Plenty.

The situation of medicine availability in India is therefore one of poverty and ill-health amidst adequacy if not plenty. We have a doctor to population ratio as good as the US; we have one of the developing world’s most flourishing pharmaceutical industries but yet most common and useful drugs are not easily available, or if available they are not affordable. Our public sector facilities are very inadequately stocked with essential medicines.

How many drug units are there and how many formulations are made in India? As against the frequently quoted figure of about 20,000 manufacturing units, the actual number of drug manufacturing licenses issued was-bulk (1333), formulations (4534), large volume parenterals (134), and vaccines (56). The total number of manufacturing units engaged in production of bulk drug and formulations is not more than 5877. Besides there are 199 medical devices units, 638 surgical dressings and 272 disinfectant units, 4645 loan licences and 318 repacking units, 1806 blood banks, 2228 cosmetics units and 287 other units not covered in the above categories. According to the Director, National Pharmaceutical Pricing Authority of the Government of India (NPPA), the number of APIs (Active Pharmaceutical Ingredients) used in 550, APIs manufactured is 400, formulations marketed are 20,000 under 8000 brand names. The NPPA monitors 20,000 formulations and according to its figures, 56 percent of these formulations available are based on a single ingredient bulk drug, 20 percent on 2 bulk drugs, 8 percent on 3 bulk drugs 4 percent on 4 bulk drugs, 2.5 percent on 5 bulk drugs, and 9.5 percent on 5 or more bulk drugs.

If we examine the list of Top-selling 300 brands (as per ORG-Neilson Oct 2003), we find that only 115 b are of drugs that are mentioned in the National Medicines List (NEML) 2003, i.e. only 38% of brands of the Top-selling selling ones are of drugs mentioned in the NEML, he other 62% are of drugs which do not find mention in the NEML. Among these, 62% brands comprise drugs that are highest priced alternatives without a clear therapeutic advantage, and many drugs that are necessary, irrational and even hazardous.

The number of drugs represented by these 115 brands is only 68. That means the majority of the Top-selling brands are of drugs which are outside the National Essential Medicines List, which means that the majority of the drugs which are the most cost effective for the treatment of priority health needs of the people are not the ones which are selling the most.

A dramatic illustration of the lack of public health relevance of these Top-selling preparations is the case of preparations for iron deficiency anemia, which is one of India’s most prevalent public health problems.

There is not a single preparation in the top 300, which has been the ingredients for an anemia preparation as mentioned in the National essential Medicines List.

It is paradoxical that while essential and life saving drugs are in short supply, more drugs which are therapeutically ineffective, irrational, and may be even dangerous, are being produced with absolute disregard to the country’s health needs. The problem becomes more acute in developing countries where resources for the purchase of drugs are scarce.

Why an Essential Medicines List? 

The proliferation of drugs (medicines) and brands creates further confusion even as it is necessary to ensure policies that conserve society’s resources for only useful drugs. Hence there is a need to select essential drugs from the innumerable drugs, mostly unnecessary ones, available in the market.

It is with this view, the World Health Organisation (WHO) promoted the concept of essential drugs. According to the WHO:”Essential medicines are those that satisfy the priority health care needs of the population. They are selected with due regard to public health relevance, evidence on efficacy and safety, and comparative cost-effectiveness. Essential medicines are intended to be available within the context of functioning health systems art all times in adequate amounts, in the appropriate dosage forms, with assumed quality and adequate information, and at a price the individual and the community can afford. The implementation of the concept of essential medicines is intended to be flexible and adaptable to many different situations; exactly which medicines are regarded as essential remains a national responsibility.”

In 1977, a WHO Expert Committee complied a list of essential drugs. The WHO list is a model which developing countries can use to make their own selection of essential drugs which are considered “basic, necessary and indispensable to the health needs of the population”. They are to be identified by their generic names. The first Model List of Essential drugs of 1977 identified 208 individual drugs that together could provide safe, effective treatment for the majority of communicable and non-communicable diseases. The 14th Model List of Essential Medicines of March 2005 contains 306 individual medicines in 405 formulations.

Basically, an essential drugs policy means the availability of a minimum number of rational drugs that will satisfy the health care needs of the majority of people. The key elements in the concept of essential drugs that they be rational, scientifically proven, therapeutically effective, safe for use, economical and readily available in the country.

The criteria for the selection of the essential drugs depends on such factors as: prevalent disease patterns, available treatment facilities, training of existing health personnel, financial resources, and the genetic, demographic and environmental factors that influence the state of health and illness in a particular country. They should have gone through adequate price and easy availability.

Selection Criteria

Which treatment is recommended and which medicines are selected depend on many factors, such as pattern of prevalent disease, treatment facilities, the training and experience of available personnel, financial resources, and genetic, demographic and environmental factors. The following criteria are used by the WHO Expert Committee on the selection and use of Essential Medicines:-

  • Only medicines for which sound and adequate evidence of efficacy and safety is available should be selected.
  • Relative cost-effectiveness is a major consideration for choosing medicines within the same therapeutic category.
  • In comparisons between medicines, the total cost of the treatment not only the unit cost of the medicine must be considered and be compared with its efficacy.
  • In some cases, the choice may also be influenced by other factors such as properties or by local considerations such as the availability of facilities for manufacture or storage.
  • Each medicine selected must be available in a form in which adequate quality, including bioavailability, can be ensured; its stability under the anticipated conditions of storage and use must be determined.
  • Most essential medicines should be formulated as single compounds.
  • Fixed dose combination products are selected only when the combination has a proven advantage in therapeutic effect, safety, adherence or in decreasing the emergence of drug resistance in malaria, tuberculosis and HIV/AIDS. (Source: WHO EDM Library)

An essential drugs list may vary from country to country depending on the above factors. The selection of essential drugs is a continuous process of evaluating the current health needs of the country. The WHO list serves as a model list for adoption in national health policy. It is revised and updated periodically. (See also Annexure 3 for a sample of country experiences.)

A successful essential drugs programme would:

    • Reduce the number of drugs to be produced and available in the market.
    • Improve the quality of drug management, drug information, and monitoring and utilization.
    • Reduce the cost to the consumer and to the country as a whole.

Advantage of an Essential Drugs List

The advantages of adopting an Essential Medicines List is mainly four-fold. They are: medical, social, economic and administrative.

Medical Advantages.

·        It is medically, therapeutically and scientifically sound, and it ensures rational use of drugs.

·        It limits the use of irrational and hazardous drugs and decreases the risks of iatrogenesis (drug and doctor induced disease).

·        It improves the possibility of monitoring adverse drug reactions in patients.

Economic Advantages.

·        It is economically beneficial to the nation because it prevents wastage of scarce resources on non-essentials.

·        The economies of scale achieved in the larger production of priority drugs brings down their prices.

·        It curtails the aggressive marketing of non-essential formulations.

·        It is economically beneficial to the patient because it prevents wastage on irrational and non-essentials.

Social Advantage.

·        It responds to the real health needs of people.

·        It facilitates the dissemination of correct information about the drugs to health personnel, medical practitioners and consumers in general.

·        It makes it imperative to draw up priorities to meet the most urgent needs of the people for essential health care.

Administrative Advantage.

·        It is organizationally sound because it makes quality control of drugs, because of the limited number of drugs to be monitored.

·        It facilitates the streamlining of production, storage, and distribution of drugs, because of the smaller number of drugs involved.

·        It helps in the clear identification of drugs.

·        It facilitates the fixing from prices as well as revision/ withdrawal of duties, sales tax etc.

An essential drugs programme is to be implemented as part of the rational drug policy. Its implementation depends on the political will of all the governments without which drug marketing will continue uncontrolled with aggressive promotion of useless, irrational, dangerous or expensive drugs. And low cost, essential drugs will continue to be short supply and information on drugs will remain dangerously inadequate.

Essential Lists in Countries.

The WHO’s Action Programme on essential drugs recommended about 306 drugs in its March 2005 list to meet most of the health care needs of any developing country. As of 2002, 156 countries have a national list of essential drugs, of which 81 have been updated in the previous 5 years.

In 1972, the Sri Lankan government selected 600 essential drugs. In 1977, Afghanistan reduced the number of drugs from over 2000 to 400 in private as well as public sector and allowed the sale of only by their generic names. Nepal in 1986 chose 260 drugs for the national level with approved list of essential drugs for various levels, Mozambique chose 343 drugs in 1980, Iran selected 600 in 1980, Kenya a maximum of 200 drugs. Bangladesh issued a drug ordinance in 1982 allowing only 150 drugs (See Annexure 1 for Criteria used in Bangladesh to weed out drugs). Norway and the Nordic countries also implemented the essential drugs list. Other countries which have taken the lead include: Belarus, 1995 (250 essential drugs); Georgia, 1995; Maldives, 1995 (532 drugs by generic name); Turke, 1995 (382 drugs) and South Africa which had an essential drugs list in 24 therapeutic groups for primary health care (1996) with standard treatment  guidelines. The Hathi Committee which was appointed in 1977 by the government of India to study the drug industry in India recommended that greater emphasis be laid on the production of 117 identified essential drugs and recommended abolishing the use of brand names in a phased manner. However this recommendation has been ignored by the Government of India.

The government of India’s Ministry of Health and Family Welfare had come with an essential drug list in 1996 and again in 2003. The latter called National Essential Medicines List (NEML 2003) consists of about 350 drugs. The NEML has to be seen in the context of the National Health Policy and the Pharmaceutical Policy 2002. Both these lists seem to be hanging out in the air without any directions to the public health facilities in India as to how to use the same. In the meanwhile many state governments notable Tamil Nadu and Delhi State and Rajasthan have implemented the lists actively by using them in their bulk procurement exercises for all the Government health facilities in their states. Considerable savings have been reported (see later in the chapter) by the adoption of such lists.

The report of the government of India “Task Force to Explore Options other than  Price control for Achieving the objective of Making Available Life–saving Drugs at Reasonable Prices” (sep 2005) has recommended that all drugs in the National Essential Medicines (NLEM) 2003 would form the basis of drugs for control / monitoring.

Despite the WHO recommendations for the use of essential drugs list and implementation of the programmme and the Hathi Committee report calling for urgent measures to improve the Indian drug situation, the drug formulation market in India remains skewed. This is because as already mentioned many non-essential drugs, or drug combinations that do not find mention in any standard pharmacology textbook are licensed for manufacture in India and therefore also find their way in the Indian market.

Essential drug lists have however not been successfully implemented in most countries due to pressure from transnational countries and other vested interests. WHO’s own double standards are another major reason the essential drugs concept has not got the push that it deserves. Nevertheless WHO’s Essential Medicines Division claims that more than 150 countries have essential drug lists even as the concept itself had its silver jubilee in 2002.

Price Regulation of Essential Medicines

Anurag Bhargava & S. Srinivasan

Source: The Hindu, Open Page, 17 Oct’ 2006

Will the pharmaceutical policy again ignore the predicament of patients, the Indian experience of the free market, and the real costs of drugs?

INDIA HAS the largest number of people, an estimated 649 million, without regular access to essential medicines although it has a large pharmaceutical industry, according to the WHO’s World Medicines Situation Report of 2004. This is because of poor availability of drugs in the public health sector and poor affordability in the private system. India has one of the world’s most privatised health care systems, with patients incurring more than 80 per cent of the expenditure. According to data from the National Sample Survey’s 55th consumer expenditure survey, more than two thirds of outpatients’ expenses goes towards the purchase of drugs. There has been a progressive decline in the number of drugs under price control – from 347 in 1977 to only 74 in 1995. Over the last 12 years no drug has been placed under price control, although many new ones have been introduced. So we have antibiotics that cost a few thousands of rupees a day of treatment, cardiovascular drugs that cost thousands per vial, and cancer drugs that can cost hundreds of thousands a year. Deregulation of drug prices has contributed to increasing costs of healthcare and pushed millions into debt.

Moreover the pharmaceutical policy has deviated significantly from public health priorities. The present list of drugs under price control does not include any vaccines or any drug for anaemia or cancer or even a life-saving medicine like oral rehydration salts. It also excludes most drugs for hypertension, diabetes, coronary artery disease, tuberculosis, malaria, and all the higher antibiotics.

A pharma policy released by the previous government in 2002 would have reduced this list to less than 30 drugs. A Karnataka High Court judgment stayed the implementation of that policy. In 2003, a group of experts evolved the National List of Essential Medicines (354 in all), which could take care of most of the healthcare needs of Indians. The present Government has taken the unusual step of releasing the draft Pharmaceutical Policy 2006 in installments. Part A of the policy, containing issues other than statutory price control, was released in December 2005. In its introduction, it mentioned “price regulation of essential medicines is an important component of this policy.” Part B, which was to deal with price regulation, has still not appeared in the public domain.

After long deliberations on price regulation of drugs over the past three years (involving one committee and one task force), the Minister of Chemicals in July 2006 circulated a draft policy to the Cabinet, which planned to regulate the prices of the 354 essential medicines in the National List. This welcome, and long overdue, correction in the policy, would have greatly improved access to essential medicines. Surprisingly it faced opposition from within the Cabinet. A new joint committee of 14 members, of which 11 represent the industry and three the government, has been constituted to again consider the draft policy and price regulation. How this industry-dominated committee will reflect the public need is anybody’s guess.

The Minister of Chemicals announced on October 2, 2006, measures aimed at reducing prices of certain categories of drugs, by curbing trade margins. These completely ignore the issue of regulation of the inflated retail prices of branded drugs, which comprise the majority of drugs prescribed and sold in the market. The top 300 brands alone sell for more than Rs.18,000 crore annually. On the other hand, they seek to regulate trade margins of “generic generic” medicines, which comprise less than 5 per cent of the market, and those of “branded generic” medicines (a term which is itself a misnomer, and lacks any legal definition). These measures do not specify how many essential medicines’ prices will be reduced.

Price regulation according to the July draft would have allowed a margin of up to 200 per cent of the basic cost of manufacture, which is healthy enough for the profitability of any trade. In fact the policy would curb only profiteering, which is currently rampant. The industry has argued that if price regulation is implemented, units will close down, spurious drugs will increase, exports and R&D will decline, and the country will face drug scarcities. Pharma policies have long provided for drugs developed by indigenous R&D to be excluded from the ambit of price control, but there have been no claimants so far.Medicines are unlike any other consumer goods, because patients procure them under stressful, if not life-threatening, circumstances, on the advice of a third party (the doctor), and with little personal knowledge of their nature. They are such a critical and essential commodity that governments all over the world, even in so-called market economies, regulate their prices. The anarchic retail prices of drugs outside price control provide the clearest evidence of the need for price regulation. Two reputed companies manufacture the same medicine, in the same strength, with a retail price difference of more than 1000 per cent. Aventis charges Rs.95 for a 500mg tablet of the antibiotic levofloxacin, while CIPLA charges only Rs.6.80 for the same tablet. Drug companies charge six times in the case of anti-hypertensive and anti-diabetic drugs, 15 times for psychiatric drugs, and 18 times for anti-cancer drugs, without any intervention by the government. Companies are unable to give a credible explanation how such variations are possible, and yet complain against any regulation of retail prices.

Price regulation implies that the retail price of a drug should bear some logical relation to its manufacturing cost. The real manufacturing cost is often a very small fraction of the retail price. This is revealed by the prices of drugs in competitive tenders, by trade margins that companies offer, and by the huge amounts they spend on drug promotion. The consumers at the retail counter pay many times more than the price at which the drugs are provided to the traders or to the government. They pay heavily for the wasteful, often unethical expenses of drug promotion, and the high profit margins. In quality-conscious bulk procurement processes (for example, those in Delhi and Tamil Nadu), the tender rates for drugs are as low as 2-20 per cent of the market rate. This is unheard of in any other commodity. An example: in Tamil Nadu a company bids to supply a medicine for worms (Albendazole 400 mg tablets), at a mere 35 paise per tablet, while brands of this drug sell for Rs.12.00 in the market.

In this light, the recent offer of the industry to offer drugs to the government at just 50 per cent of the MRP is gratuitous (for procurement prices of the Tamil Nadu Government see www.tnmsc.com) . Profit margins for the company and trade margins in pharmaceuticals are often astronomical, and both need to be controlled by regulating the maximum retail price in relation to cost of manufacture. An antibiotic injection like Amikacin made by a reputed company has a retail price of Rs.64, while the retailer can buy it at Rs.13.50. Two years ago the Ministry of Chemicals investigated trade margins in three commonly used drugs – Cetrizine, Nimesulide, and Omeprazole – and found trade margins of over 1000 per cent. According to The Economic Times intelligence group, in 2004 the top 50 pharmaceutical companies alone spent Rs.5340 crore on drug marketing.

Past experiments with drug price deregulation have led to abnormal price increases of essential medicines. In 1995, for example, the price of a preparation for anaemia rose by 177 per cent, while the price of anti-TB drugs rose by nearly 90 per cent. Moreover, when drugs are placed under price control, drug companies begin producing and promoting irrational or higher priced alternatives that are not on the list. The government should pre-empt this by bringing all alternative drugs at least under a scheme of intensive price monitoring.

Price regulation is clearly a national policy matter, and in no way incompatible with TRIPS. Apart from the prices of drugs, the policy needs to address numerous other pending issues like conduct of clinical trials, regulation of new drug approvals, drug quality, drug promotion, availability of unbiased drug information, removal of unsafe and irrational drugs, and utilisation of the flexibilities under TRIPS/WTO to protect public health. If telephone tariffs, insurance premiums, electricity rates, and trading of shares are regulated in India, surely the regulation of drug prices is no less important. The industry is offering a number of complicated suggestions to the government to escape the scrutiny of price regulation. If the government turns back on its commitment to regulate the prices of essential medicines, the implications for public health will be grave.

(Anurag Bhargava, an AIIMS trained physician, is with Jan Swasthya Sahyog, Bilaspur. S. Srinivasan, an IIT/IIM graduate is an expert on drug pricing and the Managing Trustee of Low Cost Standard Therapeutics, Vadodara.)

Kolkata Declaration on Pharmaceutical Policy and Access to Essential Medicines


Adopted in the

National Seminar on Pharmaceutical Policy and Access to Essential Medicines

Kolkata on 16-17 April, 2005

The National Seminar on Pharmaceutical Policy and Access to Essential Medicines organised by Jan Swasthya Abhiyan, Federation of Medical and Sales Representatives’ Associations of India, National Campaign Committee for Drug Policy and All India Drug Action Network and supported by the World Health Organisation, India country office discussed different aspects of the country’s pharmaceutical policy. The seminar was attended by one hundred and twenty eight activists, academics and experts from all parts of the country that deliberated on different issues related to the pharmaceutical sector in India.

The Seminar noted that the country’s record in controlling diseases that affect large sections of the people has been far less than satisfactory.  The country faces new challenges in the form of increased incidence of “lifestyle” diseases and infections such as HIV-AIDS. This ominous situation admitted in the National Health Policy-2002 needs to be addressed seriously. Disease pattern and common ailments highlighted in NFHS-2 survey should also be taken in consideration.

The seminar also noted the new situation created by the policy of globalisation, privatisation, liberalization and the new product patent regime which together have threatened the national self reliance as well as availability and affordability of essential medicines. The seminar felt concerned about the worsening situation on the drug price front with its disastrous impact on the poor.  With this back ground the seminar expressed the need to formulate a National Pharmaceutical Policy that addresses the critical issue of universal access to essential medicines and of national self-reliance. This policy should be prepared by an intersectoral committee of the Ministry of Health & Family Welfare and Ministry of Chemicals & Fertilizers after discussions with all sections that have a stake in the pharmaceutical sector. The two should jointly constitute a National Drugs and Therapeutic Authority, which should be a statutory body with powers to regulate all aspects of the National Pharmaceutical Policy. Apart from experts, this body should also include representatives from health movements.

Given the above the Seminar resolves the following suggestions be considered while making the National Pharmaceutical Policy.

National Essential Medicines List

1. The Govt., based on epidemiological data, should update the National Essential Medicines List (NEML) and also prepare a Graded Essential Medicines List that is appropriate for each level of the health care system. The National List needs to be adopted by different states and adapted by them based on local conditions and disease profile.

2. The Govt. should monitor and ensure the availability of Medicines listed in the EML. Production of these medicines from the basic stages should be ensured through production control mechanisms.

3. It should be made mandatory that the procurement and use of medicines in Govt. hospitals and public sector undertakings be done based on the NEML .Such procurement should be through transparent procedures. Regular training and incentives to promote use of medicines in the NEML should be provided.

Irrational and Hazardous Drugs

  1. Given the proliferation of irrational and hazardous medicines in the market, a special committee of the DTBA should be set-up to weed out all such medicines including irrational Fixed Dose Combinations (FDC) within a stipulated period. Hence forth medicines and fixed dose combinations which are not mentioned in standard text books and other such authentic sources of pharmacological information should be banned and should not be allowed to be marketed. All existing medicines should be re-evaluated at regular intervals on the basis of expert opinion on their rationality, efficacy and need.
  2. Injectable contraceptives, transdermal implants and anti fertility vaccines should not be used in the National Family Planning Programme.
  3. Adverse Drug Reaction (ADR) Monitoring Centres should be set up in all states of the country and be provided with sufficient resources.
  4. When a substantial number of ADRs are reported either in India or abroad for a drug, the same should be referred to the DTAB for withdrawal.

Generic Drug Use

In order to encourage use of medicines in generic names, all medicines sold under generic names should be exempt of duties and taxes. All packages of medicines should carry the generic name more prominently than the brand name.

Medical Education

The curriculum for medical education should include the concepts of essential drugs and rational prescription practices.

Indian Patents Act

  1. The Govt. should keep advocating for keeping TRIPS out of WTO provisions and advocate for reopening the issue of exempting the developing countries from Product Patent.
  2. The Govt. should ensure that all the flexibilities in the Act are used to promote health and development of the indigenous drug industry.
  3. The Govt. should closely monitor the application of Patentability criteria for granting of Patents to ensure that trivial Patents are not allowed and ever greening of existing Patents does not take place.
  4. The Govt. should liberally interpret the Doha Declaration of 2001 by declaring situations of emergency/urgency in the case of diseases that are present in epidemic or endemic forms or where their prevalence constitutes a health emergency. In such situations Compulsory licenses should be issued without delay.
  5. Govt. should also facilitate the issue of compulsory licenses to remedy situations of non availability or high price of a patented drug or where an export market exists and is not being addressed.

Drug Production and Availability

  1. To ensure production from the basic stage, ratio parameters between manufacture of formulation and bulk drugs should be reintroduced.
  2. Production Control mechanisms should be introduced to ensure that all manufacturers produce a certain proportion of drugs from NEML that are Essential.
  3. The new policy of allowing 100% equity participation of MNCs in the pharmaceutical sector needs to be changed and majority equity participation by the multinational companies should only be permitted if new technology is brought in by them for manufacturing and research.
  4. Restrictions in the form of tariffs and other non-tariff measures should be imposed on the import of bulk drugs or formulation for which adequate production capacities exist in the country.
  5. Prevailing systems of loan license or third party license should be abolished. Mention of the name and address of the manufacturer should be clearly indicated on the label of each medicine, and the license holder should be held responsible for all complaints, compensation and replacement of medicines.

Drug Pricing

  1. drugs should be brought under price control given the fact drug expenditure in India is more than half the health care expense and also because more than  80% of health care expenditure is met by patients themselves.  Mechanisms that are transparent and easy to administer should be put in place to control prices and the system of price control should benefit the efficient producer. In no case should the mark up allowed be more than 100%.
  2. Trade margin, those to including wholesalers and retailers should not go beyond 30%.
  3. National Medicines Pricing Authority should be established as a quasi judicial body which should be given sufficient legal power to punish manufacturer for violation of ceiling prices.
  4. For imported medicines, provision of cost data and manufacturers price certificate should be made mandatory.
  5. All cancer and HIV/AIDS medicines and orphan medicines should be exempt from all taxes and duties, including import duties.

Public Sector

The production of drugs for the poor and the neglected diseases can only be ensured by making public sector companies major producers in these areas. Public sector medicine companies such as IDPL and HAL should be revived and they should be provided with the support in the form of sectoral reservation, preferential treatment in the cases of Govt. purchases, etc. These companies would need to be provided a leading role in drug manufacture in the case of compulsory licenses issued in situations of national emergency and extreme urgency. New public sector companies should be promoted for producing those essential medicines that are not being produced by private companies at an affordable cost.

Research and Development

  1. A major national effort should be made to increase original drug research based on the strength of our national research institutes, laboratories and the Universities and also on the biodiversity and the medicinal plant wealth of our country. The research institutions should be provided with adequate funds for drug research .Regional drug research centres may be established in states where infrastructural facilities are already available. Universities should be encouraged to offer courses so as to produce adequate and high quality human resource pool for modern drug research related activities.  The Public Sector should be promoted to play the leading role in R&D activities.
  2. Public funded Research Laboratories should co-ordinate their activities. The research activities of publicly funded research organisations should not duplicate empirical drug discovery projects in the pharma R&D model, but should concentrate on generating the knowledge base for the identification and exploitation of new intervention points for medicines.
  3. All medicines developed in the country should be exempt from taxes and duties for 10 years.
  4. A comprehensive legislation on the ethical conduct of clinical trials should be enacted in line with the Helsinki Declaration and other international covenants, treaties and declarations so as to provide for strict guidelines for obtaining informed consent, for protection of the health of subjects of such trials.
  5. Outsourcing of clinical trials for MNCs should be closely monitored by a specially constituted Standing Ethics Committee set up in each state.
  6. All information about protocols and the results of the clinical trials approved by the DGCI should be in the public domain.
  7. Phase IV of the clinical trials should be mandatory and should not be replaced by the PMS studies by he pharmaceutical companies.

Quality Control and Drug Information

  1. The manufacturer should be fully responsible for the quality of a medicine. A separate Food and Drug Court should be made responsible for redressal of complaints and for trial of those responsible for manufacture and sale of spurious and sub-standard drugs.
  2. The Drugs and Cosmetics Act should be suitably amended to provide for exemplary punishment to those found guilty.
  3. The drugs control organisation both at state and central levels should be adequately strengthened in terms of infrastructural facilities and human resources.
  4. Each state should have at least one well equipped drug testing laboratory under the control of the state drug controller.
  5. The state and central drugs controllers should have their own websites. Among other information these websites should publish updated information on banned and withdrawn drugs including their brand names as well the current laws in operation.
  6. A consensus should be developed after discussion with manufacturers of all sectors for developing minimum benchmark of good manufacturing practice which then can be embodied in the Schedule ‘M’ of the Drugs & Cosmetics Act.
  7. Consumers should be allowed to get tested medicines of doubtful quality at any Govt. approved test laboratory.
  8. New colleges of pharmacy should be opened to eventually ensure that all retail pharmaceutical outlets have the services of a trained pharmacist.
  9. The outdated Magic Remedies Act should be replaced by a new Act.
  10. To disseminate unbiased information of medicines, Govt. should develop an independent process for information. The National Formulary should be updated and published regularly. Standard treatment protocols and guidelines for common ailments and for every tier of the health system should be prepared and disseminated. Doctors, pharmacists and staff nurses should be trained in treatment protocols and guideline.  All hospitals and medical centres should be encouraged to prepare and use their own formularies.

Drug Promotion

  1. A National Ethics Committee on Promotion of Medicines (NECPM) in which there is adequate representative of civil society organisations should be formed to monitor all promotional efforts
  2. A code of ethics for marketing of medicines should be adopted by NECPM and made obligatory for all the manufacturers.
  3. All promotional materials for health professionals should be screened and approved by NECPM and all advertisements in the regional press be scrutinized and approved by a state level Ethical Promotion Committee.
  4. Gifts except minor items, inducements, sponsoring of meetings and entertainment of the members of the medical profession and those who are related to drug prescription, purchase etc by drug companies should be banned so that these do not influence prescribing practices.
  5. Drug companies should contribute funds to the drug control authority for the conduct of Continuing Medical Education programme for doctors
  6. A cap on drug promotional expenditure drug companies should be fixed and enforced.