Alliance of Doctors for Ethical Healthcare meets NPPA head to ensure uniformity and transparency in drug prices

The Alliance of Doctors for Ethical Healthcare (ADEH), in a memorandum submitted to the chairperson of the National Pharmaceutical Pricing Authority (NPPA), has demanded that the prices of drugs which includes medicines and medical devices should be streamlined.

The profit on these should be capped at 30 per cent from the ex-factory price to the consumer based on this formula:
Landed cost/ ex- factory cost + 30 per cent trade margin = MRP, inclusive of retail and wholesale margin, logistics, inventory cost.

“At present it is up to 5000 per cent in some cases as observed by the Committee on High Trade Margins in the Sale of Drugs. The committee had submitted its report on 9th December 2015 demanding capping of drug prices. But unfortunately the government has slept over it. This is hitting the consumer (the patient) hard as expenses on drugs forms nearly 67 per cent of out of pocket expenditure on drugs,” read a press release issue by ADEH.

The delegation did not agree with the contention of the industry that lowering of trade margin will bring down their sale. “They are talking like this because there is unhealthy completion. The industry has made its share of profit by selling the drugs after taking profit margin. It is the retailer who is making exorbitant profit on these drugs at the expense of the poor patients. Streamlining of the profit will in fact will make the things easy for the industry,” the press release stated.

The delegation comprising of Dr G S Grewal, Dr Arun Mitra and Dr Monica Chandy, members of the core committee of the ADEH, said that same drugs are being sold under different brand names and at different cost. There should be ‘one drug, one price’ formula, they insisted, adding that all the drugs should be sold only under the pharmacological/chemical’s name. Name of the company may be written at the bottom of the product box/wrapper.

They suggested aberration of MRP and actual cost difference in case of generic drugs will be taken care of if product box/wrapper mentions the cost price and the MRP so as to specify the profit margin in a transparent manner. They also demanded steps to ensure that companies do not sell the drugs at inflated cost on the pretext of shortage due to corona virus. All chemicals once they are labeled as drugs should be brought under the category of essential drugs.

“Drug is not a choice of the patient but discretion of prescriber,” the delegation said. A chemical which has been labeled as medicine should be automatically brought under the scheduled list essential drugs, as drugs and governed by the Drug Price Control as drug is not a choice but an essential item to be taken in times of distress on the prescription of the doctor.