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Indicating failure of the National Pharmaceutical Pricing Policy (NPPP), 2012 and the Drugs Price Control Order (DPCO), 2013, two recently-released reports have stated that medicines are still not accessible and affordable for the citizens of the country. The reports that were jointly released by Delhi-based organisations, Public Health Foundation of India (PHFI) and Institute for Studies in Industrial Development, last Thursday, pointed towards policy gaps in pricing of drugs.
One of the reports, titled "Drug Price Ceiling", states that coverage under DPCO, at present, is limited to only about 17 per cent of the drugs prescribed and promoted in the country. This leaves nearly 82 per cent of the medicines out of ambit of the policy, thus resulting in high prices. "Clearly the interests of the pharmaceutical industry have received precedence over the interest of patients," says the report. The second report, named “Access to Medicines”, expresses concern over high prices of drugs and their irrational use.
The reports together highlights the fact that despite being the “pharmacy of the global south”, India has been creating a situation wherein its own citizens have to pay huge amounts of money to buy drugs.
The pricing dilemma
Despite criticism from several quarters, DPCO had used market-based pricing (MBP) formula to determine prices of medicines, instead of cost-plus pricing (CBP) formula. In CBP, price of a medicine has to be calculated on the basis of cost of manufacturing and pre-determined profit. MBP, on the other hand, is calculated taking average of top selling brands, which in most cases are expensive.
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