How are the prices of drugs fixed?

Health Care Comments Off

Drugs sold in India, whether generic or branded, are either scheduled or non-scheduled drugs as per the Drugs and Cosmetics Rules, 1945.

The prices of all scheduled drugs is capped. But, the Drugs (Prices Control) Order, 2013 (DPCO 2013) allows 16% margin to the retailer, as per para 19 of the DPCO, within the ceiling price fixed by the government. The distributor generally has a 8% trade margin. They are not permitted to increase the price more than 10% in a year.

This means that chemists can give concession up to 16% in controlled drugs and up to 20% in unscheduled drugs. The distributor or the company can directly give up to 30% discount. High cost products are marketed directly by the companies. In most cancer products the hospitals make 30% margins or more.

Non-scheduled drugs, on the other hand, are not under price control. So, the pharmaceuticals are at liberty to decide the margin and they may decide the MRP. They fix the MRP of these drugs in such a way that there is generous amount of trade margin for wholesalers and retailers. However, it is reported by the industry that as a norm rather than the law, the retailer enjoys a trade margin of 20% and the distributor a trade margin of 10% for non-scheduled drugs. This comprises 89% of the market of non-scheduled medicines with 27321 products. So, only about 11% (5503 products) have a trade margin of more than 30%. But, the government can and has been intervening whenever the need arises to cap the prices of drugs when brought to its notice under Para 19 of the DPCO.

Most disposables, reagents, devices, equipments are unscheduled products with no price control.

Here are few related terms and their meaning.

Retail price of a drug: This is the price at which a drug is sold to a consumer. The manufacturer is required to print such a price on the label of the product. In case of controlled formulations, the retail price is a price arrived at or fixed in accordance with the provisions of DPCO, 1995.

Local taxes extra: This now means GST.

Total amount required to be paid: Printed MRP (Maximum Retail Price) plus GST. However, a medicine can be sold below this price.

Loose medicines: If a retailer sells loose quantity (unpacked), the price of such medicine should not exceed pro-rata amount of the price printed on the label of the container, plus 5% thereof.

Price control: Only 74 out of about 500 commonly used bulk drugs are kept under statutory price control. All formulations containing these bulk drugs either in a single or combination form fall under price-controlled category. However, the prices of other drugs can be regulated, if warranted in public interest.

Dr KK Aggarwal

Padma Shri Awardee

President Elect Confederation of Medical Associations in Asia and Oceania   (CMAAO)

Group Editor-in-Chief IJCP Publications

President Heart Care Foundation of India

Past National President IMA

Non-antibiotic antibacterial agents: Has their time come?

Heart Care Foundation of India Comments Off

The discovery of penicillin ushered in the antibiotic era, which dramatically cut down the prevailing infection rate. Since then, antibiotics have successfully treated and prevented many infections and saved countless lives as a result.

But now, many bacteria have developed resistance to these ‘wonder drugs’ reducing their effectiveness. The emergence of resistance to antibiotics was perhaps a development ‘waiting to happen’ given their indiscriminate use since they were first discovered. With no new antibiotics in the pipeline, a ‘pre-antibiotic era’ looms ahead, where many common infections might no longer have a cure and, once again, become a threat to human life.

Antimicrobial resistance (AMR) is rapidly increasing worldwide and has now become a global public health issue.

Given this background coupled with the undesirable side effects of systemic antibiotics, it is time perhaps to look at and explore some non-antibiotic antibacterial alternatives, some of which are available in nature.

Sunlight is a potent bactericide. It is also a natural disinfectant. A review examining the roles of sunlight and natural ventilation for controlling infection published in the Journal of Hospital Infection in 2013 states as follows: “The majority of microbes that cause airborne infections cannot tolerate sunlight”. The article further says, “The World Health Organization refers to sunlight in guidance on preventing hospital infections.”

The WHO also promotes natural ventilation design for infection control in health care in its 2009 guidelines on natural ventilation for infection control in health-care settings.

Many foods such as garlic, turmeric, ginger, honey, oregano act as natural antibiotics with antibacterial action; some of them like garlic may also have antiviral and/or antifungal properties. Oregano has a strong antifungal action.

Then there are medicinal plants or herbs. The all-familiar neem comes foremost in the list. Each part of the neem tree such as the leaves, twigs, seeds have been used for their healing effect. Neem leaves have been used in skin infections. The herb Echinacea is a natural antibiotic, which can treat bacterial infections. Tulsi has antibacterial, anti-viral and anti-fungal activity. The Indian Ginseng (Withania somnifera), locally known as Ashwagandha, has antibiotic, antioxidant, immunomodulatory, antistress and adaptogenic activity.

Use of topical antiseptics on wounds is another approach to prevent and treat infection. Unlike topical antibiotics, antiseptics have the advantage of a broad-spectrum antimicrobial activity, faster onset of action that is long-lasting, good tolerance and less likelihood for resistance.

Then there are some innovative technologies, which have been shown to have antimicrobial effects. These may well become feasible options in the near future, though their long term effect is yet to be studied.

The use of copper-coated uniforms to fight E. coli infection in hospitals has been reported this year in the Journal of Nanomaterials. Researchers have created a ‘durable and washable, concrete-like’ composite material made from antibacterial copper nanoparticles. They have also developed a way of binding the composite to wearable materials such as cotton and polyester. These cotton and polyester coated-copper fabrics showed excellent antibacterial resistance against Staph aureus and E. coli, even after being washed 30 times. Doctors could soon be wearing their white coats and scrubs made of this material.

Researchers have developed silver-nanoparticle-embedded antimicrobial paints. Silver is antibacterial. Surfaces coated with silver-nanoparticle-embedded antimicrobial paints have shown excellent antimicrobial properties by killing both Gram-positive (Staph aureus) and Gram-negative (E. coli) bacteria. These paints may be used in hospitals to fight off infections.

Prevention is better than cure. There is no time like now to re-emphasize that hand hygiene is the single most effective and economical means to prevent the spread of infections.

Dr KK Aggarwal

Padma Shri AwardeeVice President CMAAOGroup Editor-in-Chief IJCP Publications

President Heart Care Foundation of India

Immediate Past National President IMA

The answer to high cost of drugs is Adopt a one drug-one price-one company policy

Health Care Comments Off

The recent comments of the Prime Minister on doctors in his visit to the UK have been widely criticized among the fraternity. Yes, he should not have spoken so.

But, let’s go back to his main allegation that doctors don’t write cheaper medicines.

There are two types of drugs in India: patented and non-patented. It is the non-patented drugs, which are called generic drugs. The only way to differentiate between the two is to give the drug a name, either a brand name or the name of the pharmaceutical company.

Unfortunately, the current policy in the country allows the same generic to be sold under three names: Generic-Generic, Trade Generic and Branded Generic.

Branded Generics are full-fledged branded drugs i.e. they are marketed under a brand name. Trade Generic drugs are high margin, non promoted brand generic drugs. The Jan Aushadhi drugs are generic-generic drugs.

Call them by any name, Generic-Generic, Trade Generic or Branded Generic, their quality is the same, what is different between them is their cost.

It is the government, which is allowing the one company to market a generic drug under three names (generic-generic, trade generic and branded-generic) and also at differential prices.

So, instead of criticizing doctors, the government ought to allow non-patented drugs at one price (one drug one company one price policy).

We respect the sentiments of our Prime Minister; he represents the collective consciousness of all citizens of the country.

But, I would like to say to him, respected Prime Minister Ji, if you want to reduce the cost of medicines, the solution is simple – “adopt a one drug-one price-one company policy”. Also request all doctors to choose NLEM drugs unless there are reasons not to write them.

Dr KK Aggarwal

Padma Shri AwardeeVice President CMAAOGroup Editor-in-Chief IJCP Publications

President Heart Care Foundation of India

Immediate Past National President IMA

« Previous Entries