Diagnosis and treatment of diseases may soon become less expensive in India, if the Indian government's proposal to become
the country's sole purchaser of drugs and medical devices takes shape. Under new proposals to cut costs, the Indian government
is considering monopoly purchases of generic drugs, medical devices, and patented drugs from small and medium enterprises,
The government is also in the process of framing guidelines for compulsory price negotiation with drug companies for their
new products—both patented medicines as well as medical devices—at the time of granting marketing approvals. The government
has asked the National Pharmaceutical Pricing Authority (NPPA) to collect data on price, supply, and availability of all medical
devices and patented drugs in the country.
NPPA is part of the government established inter alia to fix and revise the prices of controlled bulk drugs and formulations
and to enforce prices and availability of the medicines in the country under the Drugs (Prices Control) Order of 1995. The
organization is also entrusted with the task of recovering amounts overcharged by drug manufacturers.
Behind the monopoly idea
Confirming the move toward monopoly, Debasis Panda, joint secretary of India's Ministry of Health and Family Welfare, says,
"The government is mulling such a move as part of its effort toward achieving quality healthcare for all. In the next couple
of months, the government will provide some regulations, especially for the medical devices sector that is literally growing
in a haphazard manner." Panda added that the Health and Family Welfare Ministry is also working toward a switch from a control-type
regime to a regulatory regime to cope with the new technologies and treatments that are now available.
The data gathered by NPPA would provide the government with enough reference information to negotiate prices of medical devices
and drugs accordingly. While this move would ensure that medical device makers price their brands reasonably, the goal is
to benefit consumers who need devices such as stents, catheters, orthopaedic implants, and heart valves, by offering them
at a lower price.
The government's attempt to buy patented drugs, however, has rung alarm bells across the nation and with multinational corporations
(MNCs) operating in India. "It is completely illogical. How can the government decide on the prices of patented drugs?" questions
Ranjit Shahani, vice-chairman of Mumbai-based Novartis India. "The pharma MNC gravy-train might just go off-track in India,
if the government persists with its move," he added.
Shahani recalls that the Indian government proposed to buy and sell generic-generic products last April to add to its national
program to fight malaria and tuberculosis. "The government was keen to buy directly from drug manufacturers and then distribute
it via its own channels," he said. "That was a voluntary purchase." Most drug companies such as those belonging to the Indian
Drug Manufacturers Association, the Organization of Pharmaceutical Producers of India (OPPI), and the Indian Pharmaceutical
Alliance (IPA), supported the move.
However, the current monopoly idea, "to buy the whole lot, could well be the institution of compulsory licensing, under a
new guise," says Shahani, stating that such action should not be considered.