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ACCESS TO ESSENTIAL
MEDICINES
ACCESS TO ESSENTIAL MEDICINES
Dedicated to the campaign of Jan Sasthya Abhiyan
for People's Charter for Essential Medicines
FEDERATION OF MEDICAL AND SALES
REPRESENTATIVES' ASSOCIATIONS OF INDIA
Access to Essential Medicines
A booklet published by
Federation for Medical and Sales Representratives’
Associations of India
372/21 Russa Road East,
Kolkata-700 033
Phone: 4242862
Email: fmrai@vsnl.net
Kolkata, January,2002
Price : Rs. 5.00
fti
Text by—A'mitavaGuha on behalf of the Drug Sub Committee ofFMRAI.
Cover design—Protish Bhowmik. Other drawings have been collected
from various publications of People's Health Assembly. Dhaka. Layout and
printed by Satyajug Employees Cooperative Industrial Society Ltd.,
13 Prafulla Sarkar Street. Kolkata-72.
Endangered Access to Essential Medicines
A serious concern has been globally expressed that the access to
essential drugs are rapidly receding. There are many factors relating
to health and drugs which are responsible to such situation. Most of
the third world countries have become victim of the globalisation
causing rapid privatisation of health when survival has become
profitable commodity to the investors. The investors in health and
drugs are now multinational corporations who are rapidly capturing
the third world countries with the help of conditionalities of World
Bank, World Trade Organisations, etc.
Nations in the third world are being compelled to change their
domestic laws or policies to allow free profit earing of the
multinationals at the cost of health of the people. Even the United
Nation organisations like World Health Organisation (WHO) is
heavily influenced by these agencies for the benefit of the business
interest of the multinational companies.
In recent times, it has been established that the multinational drug
companies do not bother for human life, if people die due to lack of
affordability to medicines even when epidemic outbreaks. Some
countries have taken bold steps in ignoring the dictates of
international agencies. In contrast, the government of our country
have started changing laws and policies to enable the World Bank
and WTO for making profit out of the illness of our people. It is a
serious concern that even if someone pays, there is no guarantee for
getting an appropriate medicine of good quality.
It is, therefore needed that a campaign should be built up for
appropriate policy aimed to benefit the people not only the industry.
For the purpose, we have taken this step to introduce the issues
regarding endangered access to essential medicine in this booklet.
FEDERATION OF MEDICAL & SALES
REPRESENTAIVES’ ASSOCIATIONS OF INDIA
3
Globalisation & Health
Without considering the issues of health, drugs and its need could not be
addressed. The modern technocentric, specialist dependant and drug
dependant health concepts overshadow most of the vital areas of drug
need. To begin with, it is therefore, necessary to understand the politics of
health.
Major Players in Health:ln the recent times World Bank has become the
largest single investor in health. Concern was expressed in The Lancet in its
July 1993 issue that this effort of World Bank may influence health policies
of nations. British Medical Journal in its 27th March 1999 issue stated that
‘Since 1990 the bank's health, nutrition and population division has lent $9
billion to the health and usurped the World Health Organisation’s leadership
role in developing global health policy.’ Intervention on health has come an
obvious package of globalisation as conditions of loan. For the last several
decades the International Monitory Fund (IMF) and World Bank are the
major players in making decisions and managing debt policy for the third
world. They have functioned as an important instrument for the developed
countries of South for dominating world economy and earning higher profit.
Between1980 and 1992 the World Bank has made profit to the extent that its
net earning rose to 172% to over $1.6 billion. The accumulated earning of
the World Bank amounts over $14 billion.
Who has gained from the economic domination of IMF/Bank? It is
obviously the multinational corporations (MNCs) of UK, USA and Japan.
These MNCs have gathered enormous wealth which surpasses wealth of
many countries. Sales of General Motors yearly is $164 billion which is
more than the Gross Domestic Product ofThailand and Norway.The market
value of Microsoft is $507 billion which is much higher than GDP of our
country.These MNCs alone thus became much powerful to dictate internal
policies of the countries of the third world.
IMF and World Bank forcing policy changes:
World Health Organisation (WHO) is an United Nation’s body created for
helping the nations for developing proper health systems with appropriate
techonology support. All member nations have equal right in decision
making and they support with financial contribution fixed according to their
own ability. Largest contributor is USA. WHO has been helping the nations
with required funds for improving their health situations to attain health for
5
all. From the mid-eighties, the IMF and World Bank combine has also been
contributing to provide loans for healthcare, sanitation and control of
diseases. In tune with the IMF’s structural adjustment programme, World
Bank in 1993 in their annual report devised a detail document for the
developing countries titled as 'Investing in Health'. By the end of eighties the
World Bank became the largest investor for health. Fundamental objective
of the structural reform prepared by IMF are- more privatisation
- reduce subsidies in the welfare activities
- devaluation of currency
- export orientation at the cost of consumption need of the people
- liberalisation for aggression
multinational corporations
of
domestic
market
by
the
- reduction of employment
Economic stability of countries after country collapsed while following
these directives
even
causing political unrest.
There is no instance in the
entire world that any
country has gained in any
way by following the
directives of IMF.
In tune of the above
prescription of IMF, World
Bank in their report
directed the developing
nations to adopt major
changes in their own
health policies. It aimed to
develop private-led health
infrastructure so that the
role of the government
significantly reduced and
the health sector is
allowed to be utilised by private sectors for earning profit. Even in the
developed countries health and education are considered as social
investment for benefit of the country though the imminent benefit may not be
visible. But for the developing countries it was made mandatory to transform
health sector for earning profit. The conditions of World Bank for loan had
forced the third world countries to change domestic health policies despite
knowing that these may cause immense harm to the people.
It is envisaged in the policy that practically no health benefits should be
6
given to the people and user’s charges should be imposed for every bit of
healthcare utilities. Priority should be given to the profit generating sectors.
No much scope should be given to the old and unemployed sections, which
do not contribute to income generation. Schemes for eradication of
prevalent and communicable diseases particularly preventive measures
can not generate direct profit and hence they should not be kept in the
priority sector. Countries are advised to introduce health insurance system
for which the foreign insurance sector should be allowed to invest. It is
beyond any justification that where vast majority of people live under
poverty line and remain partly or wholly unemployed, how health insurance
system would be available to them.
Instead of improving health conditions of the third world countries, World
Bank loan and their conditions are causing subsequent changes in
domestic policy and had created all-round deterioration of health situation in
these countries. Prices of healthcare and particularly prices of medicines
have gone up so high that mortality rate in some African countries are
expected to go back to that of seventeen years back.
State of health in our country:
While preparing ‘Draft National Health Policy-2001’ our Govt, have
admitted that ‘Malaria has staged resurgence in 1980s before stabilising at
a high prevalence level during 1990s. Over the years, an increasing level of
insecticide-resistance has developed in the malarial vectors in many parts
of the country as a whole. In respect of TB, the public health scenario has
not shown any significant decline in the pool of infection among the
community, and, there has been a distressing trend in increase of drug
resistance.’ The new factor added to the list is HIV/AIDS about which the
Govt, has no proper estimate but by all means it is increasing at an
alarmingly high rate in a very short period. Common water borne infection
like gastro-enteritis, cholera and some forms of hepatitis continue to
contribute a high level of death.
Health Policy
Our existing health policy was declared in 1983. This policy emphasising
the need of primary health decided- “India is committed to attaining the goal
of ‘Health for All by the year 2000 AD’ through the universal provision of
comprehensive primary health care services.”
In the mean time, the pattern of disease insurgence has been changed.
Importantly with the influx of World Bank money in health, pressure on
policy change has also mounted. Our government in September.2001 had
7
prepared a new drug policy and put it in the internet asking for suggestions
to be reached within a month. A policy that was required to be changed
amidst the complicated national and international situation was at last
prepared after seventeen years. Health comes under the list of concurrent
subject-for both the central and state governments where the state
governments bear major responsibility. While preparing this draft policy, the
government had ignored the National Council of Health and Family Welfare
that consists of representation from each state of the country.
In preparing the last national health policy in 1983, the Health Ministry
sought for the help of two premier institutions like Indian Council of Medical
Research and Indian Council of Social Science Research. Now this policy is
formulated from the recommendations of the 'Policy Framework for Reforms
in Health Care' drafted by the Prime Minister's Advisory Council on Trade
and Industry headed by big industrialists like Mukesh Ambani and
Kumarmangalam Birla. It is obvious that the policy would not necessarily
depend on the interest of the poor people.
The draft health policy can be divided in to two major parts. The first part
deals with the health parameters and conceptual area while the other part
deals with the recommendations for implementation. There is no co-relation
among them. Problems described in one part do not provide remedies in the
other.The first part admits that though a few diseases could be eradicated in
the last two decades but insurgence of malaria and spread of multidrug
resistantTB and HIV/AIDS have become a serious concern. Along with this,
water borne diseases like diarrhoea, cholera and hepatitis have increased.
Diseases those were confined to the urban areas have spread in the rural
sectors also, thereby the disease pattern has taken up a new shape.
The policy draft described that the health expenditure of the government
as percentage to GDP has declined form. 1.3 percent in 1990 to 0.9 percent
in 1999. In fact, in India lowest expinditure of the governement is made in
health. In the developed countries this expinditure is 8 percent and even in
the countries of sub Saharan countries of Africa it is at least 5 percent.
It was confessed that the health infrastructure is highly inadequate to
meet the need of the people. It has been estimated that less than 20 percent
of the population seeks the Out Patient Department service and less than
45 percent avails of the facilities for in-door treatment in public hospitals.
There is dearth of doctors, nurses and other paramedics. The draft policy
dealt with many other topics like, medical education, urban health, mental
health, medical research, diseases surveillance, etc. which are all relevant.
But the most unattended area in the draft is primary health and community
health. Due to this shift, the policy can not reach to the objective to provide
better health to the people. This has been done with an intention.
8
In the other chapter of the draft policy, no cognition was given to the
problems mentioned in the first chapter. For example, it is recommended
that only 2 percent of GDP should be spend for health. This amount takes us
to the level of 1990 only and noting more. Though decentralised health
structure was recommended but disease eradication and other national
programme shall remain under the domain of the bureaucrats of the central
health ministry. Issues like mother & child health, child nutrition, etc was not
found worth to mention even.
Ours is the most private dependent health care system in the world. Our
governement has far less control in health than USA, UK or even than that of
our neighbouring country like Sri Lanka.
% earns less than $1 day
health expenditure
Infant mortality/1000
India
44.2
70
17.3
China
18.5
31
24.9
Sri Lanka
6.6
16
45.5
UK
nil
6
96.9
USA
nil
7
44.1
Country
% of public exp. to total
Source: Draft National Health Policy- 2001
The Draft policy gave much importance to privatise the already highest
privatised health system. It is proposed that to attract foreign currency, private
health enterprises would be encouraged to develop sophisticated health
institutes. They would be given all facilities as applicable to export oriented
industries. Private owned large hospitals have been developed in some
countries of Southeast Asia where no common people have any access.
Similarly promotion of private insurance companies to invest in health is also
recommended. In a country where unemployment is ever increasing, wide
spread poverty is also expanding and more people are loosing jobs due to
policy of the government how health insurance can improve the situation.
On medical education, highest priority has been given to post graduate
level. Highly specialist dependent health system may serve the purpose of
expensive private sectors but not the common people. The policy suggested
that two more specialisation should be introduced namely, ‘public health’
and ‘family medicine’. Without education in these two subjects no one can
imagine a graduate doctor. Therefore specialisation is not necessary.
Policy also recommended on medical research. Instead of developing
9
research on social medicines, the policy referred to research on developing
drugs.This should be the purview of the drug policy. The draft recommends
that government funded medical research should be to a level of 1 percent
of the total spending by 2005; and thereafter should be increased to 2
percent. This amount is highly insufficient as it is mentioned that several
million dollars are required to develop a new drug whereas the draft hopes
that with this paltry sum, drug development would be possible for not only
one but forTB, malaria and even for AIDS.
The only area where the draft policy had made bold recommendation is
on impact of globalisation on the health sector. The policy expressed anxiety
that strong patents system poses a threat to the health security which may
increase prices of drugs and vaccines. The policy suggested that the
government exert full influence in all international fora United Nations, World
Health Organisation, World Trade Organisation, etc.
The other important issue that the draft policy has totally ignored is the
drug policy. Present drug policy is prepared and controlled by the ministry of
chemicals and fertilisers which is a industry oriented Ministry. Medicines are
important part of health care. The policy frame work on medicines if not
looked under the purview of health, it is bound to serve purpose of profit by
the industry. The Health Ministry through its drugs control machinery is
responsible for controlling the quality, prices and licensing of drugs.There is
very little mention in the draft policy even in these areas. On the contrary, the
draft envisaged introduction of users charges in every stages.This is simply
aimed to convert the health system to profit earning sector. There will be
virtually no free treatment available to vast number of TB patients, leprosy
patients or even to the cancer patients. People will have no choice to suffer
painfully to die without any health care.
Rational Use of Drugs
Pharmaceutical system has become highly dynamic since there is always
introduction of new better drugs replacing the old drugs. It is also a fact that
with more wide use of a drug, its illeffects manifest when it is considered as
hazardous drug and a decision needs to be taken to either withdraw the
drug or to replace it with newer drugs with more efficacy and less illeffects. A
drug may also become irrational if it is applied to wrong diseases.
The above fact is often over looked for the interest of the industry. In our
country a very large number of drugs are found which are either irrational or
hazardous and should be withdrawn from the market. It is observed that in
most of the developing countries where resource is limited spending money
for these kind of drugs is a big waste. In 1S85 WHO in the World Health
10
Assembly decided that a list of essential drugs should be prepared by them
and all nations also should prepare a list of essential drugs suitable to treat
most of the diseases of which majority of people suffer. Since then WHO
has prepared the list of essential drugs which is revised once in every two
years. Despite assuring the WHO, our government did not prepare the list of
essential drugs suitable for our people. Many organisations in the health
movement demanded that such list should be prepared immediately. Only in
1996 a list was prepared but no one knows about such list and the
government is also not interested to use the list. It is expected that the
government should ensure production and availability of these 279
essential drugs at cheaper price.
It is also essential that the concept of rational use of drugs is included in the
medical education and the government should enforce priority use of these
drugs in all level. Sales of the irrational drugs in our country is very high. From
the data available from Operational Research Group which audits sales of
drugs in the chemist shops shows that vitamin tonics, pain killers, sexhormones are sold in large number than the anti-TB drugs or vaccines.
Market Share %
Therapeutic Group
Antibiotics
15.50
Anti-inflammatory & analgesics
7.38
Vitamins and minerals
7.26
Cough & Cold
5.14
Antacids
4.23
Cardiac
3.69
Anti-TB
2.83
Anti-anaemic
2.82
Sex hormones
2.07
Hypotensives
2.23
Vaccines
0.83
Source : ORG, Dec. 1997
This shows that irrational use of drugs is a big problem in the country.
(From the list of most highly sold brands of drugs it can be found that most of
tthe top selling drugs are irrational.
11
Banned and hazardous drugs
There are large number of drugs which are not only irrational but
dangerous also. They are being sold without any hindrance and captured
good sales. Taking advantage of weak, inadequate and faulty law dishonest
business practices are let loose to sell such drugs. There is no drug to cure
most of the diarrhoeal diseases, cold infection, influenza, etc. But good
amount antibiotics, anti allergies, vitamins and tonics are uses for these
diseases which is not only waste but may worsen disease progression. A
tendency of prescribing vitamins for any ailment is not rational. Lot of
adverse criticism about using vitamins at random has reduced use of
conventional vitamin mixtures but new types of drugs are now promoted.
Combination of Zinc, selenium, low dose Vitamin A and various forms of
calcium are replacing the conventional vitamin mixtures. Some are more
harmful and all of them are more expensive.
The process of banning these drugs are very difficult. In our country some
drugs have been banned only when they were challenged in the court of law
landing to lengthy legal process spread over years. Even if some drugs were
banned but some producers including the multinationals found method to
market them. For example, the government banned combination of Vit B,. Vit
B6 and Vit B12. But the producers added other vitamins with this combination
and freely marketing them. A list of some drugs banned is given below.
1. Combination of Panchreatin or panchreatic enzymes with any other
enzyme: Brands available in the market-Digiplex-T; Enzer Forte;
Festal; Merkenzyme;
2.
Combination of Phenobarbitone with anti asthamatics.
3.
Combination of Penobarbitone with Hyscyamin, or Belladona.
4.
5.
Combination of Nitrofurantoin with Trimethoprim.
Combination of Nalidixic Acid with any antiameobics including
Metronidazole.
Brands:Aldigram; Basigyl; Bactomet; Genogyl-N;
Gramoneg-M; Gramogyl; Microneg; Nagyl; Qugyl-N; Spagyl.
6.
7.
8.
9.
Combination of Loperamide with furazolidone.
10.
Combination of Nimesolide with Paracetamol.
Combination of Cyproheptadine with Lysine or peptone.
Combination fo Diazipam with Diphenhydramine hydrochloride.
Combination of Metochlorpropamide with Aspirin or Paracetamol.
It may be noted that a large number of drugs which have high sales in the
market but are more dangerous or more irrational which is consciously
overlooked by the authority and are freely enjoying sales and profit thereof.
All these established that there should be strict regulation for banning of
12
drugs. It is also required that all drugs available in the market should be
periodically screened and objectionable drugs must be withdrawn forthwith.
It is also necessary that before marketing any new drugs or a combination
of drugs the producers should establish its therapeutic validity.
How bad drugs are sold
The drug companies use various marketing techniques ethical or
unethical to promote their irrational drugs. Some methods are discussed
here.
Use bias information: The companies use literatures excellenly printed
and projects misinformation in a most authentic manner. Tall claims are
made about the benefits of their drugs. Sometimes they quote partly from
the medical journals and in many occasions they were found to quote from
some obsecure journals which has no international recognition. Many a
times they simply quote data on (their own) files. It is surprising that many
persons are convinced with such misleading information and happily
prescribe them.
Neurobion Forte
Help maintain structural
&; functional integrity
of neurons.
MERCK
Neurobion Forte
50 Tablet*
UaaIi Mm crmUvl tabL*t mnudnn
Thiansno MunoultratnlP.
• - ........ .. 1Urr»
Pyridoxine Ilyiirw+dortdc TP ................ .. . -........ 0 uax
CJnnrooMbwnfn Crlturnle In Oelnliii rjjtuvMlenl to
Cyanoco<jo'..unii> IP .
. limng
NiivlirujiiiifU ip.................
tOOnif
Caka.ua> Pantothenate IP............ - ...... ...... ............. 50 cig
Cokxirw UMd: Pctxy'ou 4R Lake a«<1 Titanium dlaxada
Appropriate ^vrage»_o<k*^d
Uwe'
6tofe In • oool. dry pkvM,
M I.. No. 144
Manufactured ty
E. Merck (India) Limited. •
M.LO.C . Talnja - 410 2M
rT-
MERCK
13
The above is an example on promotion of combination drug withVit B,, Vit
B6, Vit B12 which is banned. But the German multinational, E.Merck sells the
drug yearly of Rs.35 Crores. Without mentioning any reference they have
claimed in the literature that ‘Neurobion’- “ help maintain structural &
functional integrity of neurons’’. It gave photographs of three persons- one is
an alcoholic, the other is an age old and another is suffering from muscle
cramp. No stadard medical literature says that such combination can cure
alcoholic neuritis, senile dimentia or relief muscle cramp.
Entertaining the Doctors: Most unethical task practiced by almost all
drug companies are entertaining the doctors in various ways. They invite
them for wine and dine parties. It is a pity that all such parties are always
over crowded by the doctors. One such example is given here showing that
the doctors are invited in a cruise party in the river where wine and dinner
would be served along with various other entertainments.
Gifts and bribes:Nowadays the companies openly offer money or gifts
for prescribing their drugs. Direct relation is made with the doctors with offer
to prescribe their drugs for which they would get a percent of share in cash
or through gifts. Now companies are spending in direct deal with doctors
than making efforts to communicate scientific information.
All these actions have serious repercussion. Any prescriber who joins
drug companies in the deals would try to prescribe as many drugs as
possible in the shortest possible time. That means that they would not
hesitate to prescribe drugs to the patients who do not need them even. This
14
may endanger their life. The drug
companies are corrupting the
medical profession rampantly.
Patent System
and impact on
Drugs
What is Patent: Patent is a
right
conferred
by
the
government to inventor for a
certain time for a product or
process to produce it, for
commercial utilisation of the
invention. It is argued that patent
is given to the inventors for his
investment of his talent and cost
for his invention. In reality, patent
is a monopolistic right and is
optimally
utilised
by
the
multinational drug companies to exploit the developing countries.
Indian Patents Act, 1970: This Act is well known for helping the
development of Indian pharmaceuticals industry and considered as a model
Act for the developing countries. This Act do not permit 29 materials for
patenting of which drugs and agricultural materials are important since they
are concerned to human life. The Act only permits patenting of process of
producing (Process Patent) a drug but not the drug (Product Patent).This
has given a scope to the Indian drug companies to introduce a new drug
within two to three years of their first introduction in the world market. Before
the Act was developed, the multinational companies brought new drugs in
India 10 to 12 years after their first introduction.
Provision like Compulsory Licensing in the Act is very significant.
According to this, if a drug is found to be very important for public need, the
Govt would allow any person other than the patent holder company to
produce it provided he gives royalty to the patent holder. Indian drug
companies could get a chance to develop the process of manufacturing new
drugs and started producing them in our country. This could not only give
the scope to produce new drugs but the prices of the drugs became more
competitive. In fact, in India prices of drugs are even now is one of the
cheapest in the world.
15
The Patents Act also provided the scope to the Indian national sector
industry to flourish and now almost all essential drugs are produced in the
country. Not only this, many drugs are now exported by the Indian
companies in the developed countries. The pharmaceutical market in our
country was dominated by the multinational companies. Now the Indian
companies have successfully competed the multinationals and established
their domination in the domestic country. Out of the top 50 drug companies
at least 25 are Indian Companies. Some Indian companies have been able
to establish production units in other countries also. Indian companies have
also established research laboratories. Some of the companies have even
developed drugs in biotechnology route and patented them. India has
become self reliant in the drug industry. This is a unique situation not found
any countries of the third world.
WTO and Access to Essential Drugs:
The Associations of multinational drug companies in USA, Europe and
Japan has strongly lobbied to include patent in the GATT system. GATT was
a platform to negotiate trade among the countries. There was no basis to
include the monopolistic right like patent
in the trading system. Only objective of
this was monopolistic capture of the
market in the vital area like drugs. WTO
Agreement finally provided such scope
to the multinational drug companies.The
multinational companies had utilised.
Patenting system in many developing
countries by compelling them to import
drugs from the parent countries of the
multinationals. They took patent of their
drugs in these countries and never
cared to produced them in these
countries. With the help of weak patent
system in these countries, they did not
allow any others to manufacture even if they were able to produce them
indigenously. Many countries had suffered form this to the extent that they
were not able to supply drugs to control epidemic situation. Tragic deaths
have taken place when they could be avoided by simply supplying
appropriate drugs at cheaper cost.
The WTO Agreement compels all the member nations to enforce a strong
patent system which would not allow compulsory licensing system and
parallel import. It was possible earlier to import cheaper drug from any
country if the drug of the patent holder was found costly. This is known as
16
parallel import. The imminent result of WTO was found in South Africa
where nearly 25 percent population suffer from HIV/AIDS. People were
dying of this disease for high cost of drugs. Even due to high price of
miconazole, drug needed to treat fungal infection in the mouth, AIDS
patents were dying. Pfizer, a US company, priced this drug very high. Apart
from this, three drugs regimen required for treating was patented by
multinationals like Bristol-Mayer, Glaxo, etc. Costs of therapy of all these
drugs were as high as $11,000 per year. Large number of AIDS patients in
South Africa were dying as they could not afford such high cost. When
South Africa started importing these drugs from India which offered a cost
of $350 per year only, 38 multinational companies filed case against
government of South Africa. Global voice was raised against such inhuman
action of the multinationals. Finally the case was withdrawn. Not only this,
some of the multinationals declared that they would reduce the prices of
their drugs. It was thus established that multinational drug companies were
charging very high for their drugs.
In recent time when US government was facing the threat from large scale
anthrax infection, drug like ciprofloxacin was needed. Indian companies
offered very low price for supplying the drug. At this point, the original patent
holder of ciprofloxacin, Bayer negotiated with US government and offered a
low price but not lower than the price offered by Indian companies.
All these instances exposed that the multinational drug companies are
keeping the prices of their drugs high and would not bother the national
emergent situations.
Role off EPublic Sector
After independence, our Govt, requested the western countries to develop
pharmaceutical production units in the country. When none of them came
froward, WHO and UNICEF helped the Govt, build first public sector drug
company, Hindusthan Antibiotics Ltd. (HAL) in the year 1958. Some times
later with the help of former Soviet Union another public sector drug
company, Indian Drugs & Pharmaceuticals Ltd. (IDPL) was developed first
in Rishikesh and later in different parts of the country. IDPL was the largest
pharmaceuticals factory in Asia. It was capable to produce many drugs, had
a research and drug development infrastructure. Many small and medium
drug companies also came up where large amount of bulk drugs were
supplied by these companies.
As a result of this drugs of quality became available at much cheaper
price. These companies were catering the need of Govt, procurement of
drugs and thus a lot of money could be saved. Govt, gave all priority to these
17
companies. In due course of time, due to competitiveness, foreign drug
companies started their drug production units in our country.
Right from the beginning, conspiracy was hatched to destroy the public
sector drug companies. Lack of accountability, inadequate marketing plan
and corruption started eroding these companies. By mid eighties, the Govt.
ceased from giving priority to these companies and allowed the other
private companies to earn profit at the cost of these public sectors. The
Govt, also took over three other private companies namely, Bengal
Immunity, Bengal Chemicals and Smith Stanistreet to save their sickness.
Later the Govt, started to neglect these companies also.
HAL was a profit earning company, but the Govt, allowed the company to
wrought and showed it as a loosing company. Now the company is given on
lease to Max GB and RPG Health Care which are making profit out of this
so-called loosing company. The tragic situation was created in IDPL which
remained closed since 1996. This has forced the country to import a large
amount of drugs like tetracycline, Vit B2, Vit B6, Folic Acid, etc. A large
number of workers, technicians and scientists became jobless. The Govt.
institutions are now forced to buy drugs from the private companies at much
higher price.
©rug Pi?ises
Prices of drugs had always been considered as the most important factor
for earning profit. Due to the development of pharmaceutical industry in
India and the priority role played by the Public Sector drug companies,
prices of drugs here remained one of the lowest in the world. The Central
Govt, first in the year 1970 kept all drugs under price control. Following the
first drug policy declared in 1978, the Govt, kept 387 drugs under price
control announcing Drug Prices Control Order (DPCO). There was
tremendous resistance against DPCO from the drug companies particularly
from the multinationals who went to court to stall the price control order.
Many of them stopped production of essential drugs to create a crisis.
Subsequently the Govt, in their DPCO 1986 reduced the control on only 167
drugs. This resulted to rise of prices of many essential drugs immediately.
The Govt, argued that market competition would not allow rise of prices. In
fact pharmaceutical market is always dominated by brands, which is
established by high-pressure marketing technique used by the drug
companies. The drug companies continued their pressure in this area and
was successful in reducing the span of price control further. In the DPCO
1994 the Govt, kept control on prices over only 63 drugs. Recently the Govt.
constituted a committee to review DPCO. The committee travelled several
developed countries to find out the state of price control and commented
18
that prices of drugs are directly or indirectly controlled in all countries. Even
though, the committee recommended that there should be a mere notional
control on drug prices in India.
It has been found in several occasions that the drug companies have been
deceiving the Govt, in submitting the cost data of their drugs.Immediately
after 1986 Drug Policy was introduced, through court case it was revealed
that well known multinational companies like Hoechst, Glaxo, Pfizer, etc.
had highly over charged prices of some of their bulk drugs. Some of the
instances are given below.
Company
Drug
Glaxo
Hoechst
Boehringer
Price
Shown
Actual
Price
% over
Charged
b methasone
Rs.1,10,00
Rs.2,20,000
100
Baralgan
Rs. 24,735
Rs. 1,810
1267
Euglocon
Rs.
Rs. 2,450
300
9,800
The Supreme Court directed the governement to recover such
overcharged amount which stood at that time a total of Rs.200 crores. But
the government could not do much in this regard. As a result, many other
companies continued to over charge their drugs even violating the Price
Control Order. Recent reporting in the news papers on this issue states that
“the tenure of Drug Price Review Committee has been extencded up to
1998 for settling the Rs. 220 crores unpaid dues by the pharmaceutical
industry under Drug Price Equalisation Account (DPEA). The
pharmaceutical industry has challenged the government’s claim under
DPCO. However, the Supreme Court in a case between Department of
Chemicals & Pharmaceuticals and Cyaanimid company had upheld the
validity of provisions under DPCO. Notwithstanding the Supreme Court
verdict and appointment of DPLRC, the government could not obtain much
result in realisation from the the industry. According to an official release, till
date only Rs. 22 Crores has been deposited by the industry.”
Rise of prices in the recent times have been very high. A study of over
820 brands for different diseases shows that there has been rise of price
in the last three years; for some drugs were aboout 300 per cent even.
Barring few antibiotics, pain killers and drugs for gastrointestinal diseases,
prices of almost all drugs increased. In a note circulated by the Govt, in
November ,1997 it was stated that “Experience has shown that product
wise price control mechanism has led to stagnation in terms of newer
products and to proliferation of existing products in numerous different
strengths and pack sizes, creating confusion in the minds of consumers as
also rendering price control system impractical.”
19
In the recent times the drug companies have successfully established a
new regiem of prescriptions where old and cheaper drugs are being
replaced by new but of no significant advantages. These drugs are priced
high and are promoted with high thrust by the drug companies. When a
painkiller like aspirin costs Rs.0.30, new pain killers costing Rs.2.40 or more
are prescribed.
All new drugs are highly expensive. Some Examples areDrug
Company
Used for
Price
Cefizox
Glaxo-Welcome
Antibiotics
Rs.315 each inj.
Magnamycin
Pfizer
Antibiotics
Rs.284 each Inj.
Antifungal
Lambisil
Novertis
Amicor
SamarthPharma
Amaryl
Hoechst
Rs. 121 each Tab
Rs. 1200 each inj.
Rs. 103 for 10 Tab
Antidiabetic
For drugs, patients have no choise. Prescribers often forget the
affordability of the patients. It is the drug companies which pursue sales of
such high priced drugs even though cheaper alternatives are available.
The other phenomenon which exposes that drugs are really exhorbitantly
priced can be found in the branded generic drugs. Some drugs are
marketed by well known companies in generic names with some brands
mentioned. These drugs are sold in bulk with a very a high margin of profit to
wholesalers. But the retail price with which the drugs are sold to custormers
are same like other brands. Some examples of such drugs are given below.
Drug
Company
Generic
Pack
Price to
MRP
Difference %
Wholesalers
Nausdan TabsAlchem
Domperidine
Zedonac Mr TabAlchemjDido+paratChlorzox)
25X10
96.85
540
457.56
10x10
68.05
380
458.41
Filikem
Alchem
Folic ACID
25x10
34.4
200
481.40
Aginal5
Alembic
Amledopine
100mg
2.9
17.6
506.90
Zedonac TabsAlchem
(Dido+para)
20x10
51.6
320
520.16
Cisapride
25X10
119.78
9025
653.46
10 Tab
4
35
775.00
Cisachem
Alchem
Odinol AM TabAlembic
Oxicam dt
Alembic
Pyroxicam
10 Tab
3.45
31.5
813.04
Cetral Tab
Alembic
(Certrizine)
10 mg.
2.2
25.6
1063.64
Pyrimide MD Alchem
Nimesulide 100
25X10
60.9
725
1090.48
Tab PyrestalRanbaxy
Nimesulide 100
10 Tab
1.7
25
1370.59
25X10
39.1
625
1498.47
Pyrimide
Alchem
Nimesulide 100
20
Black Marketing of Drugs
There is a novel way to earn extra profit by the drug industry by unethical
business practice. It may not be exactly called as black marketing which in
traditional experience is hoarding and
selling of goods at inflated price. In
drug industry it is done in a different
way. One of the processes is to sell
drugs with extra unofficial discounts.
This discount is given with the consent
of the officers at the head office so that
some favored wholesalers lift more
goods than the usual to earn the extra
discount. Huge amount of stocks are
sent to some selected wholesalers
who in turn sell them to wherever
possible. Drugs being sold under
maximum retail price, there is no relief
available to the consumer out of these
undercut prices. It is the drug
companies and a few wholesalers
who enjoy additional profit. This also
establishes that in the existing price
structure there remains enough profit
margin which allow the companies to
sell their drugs at under price.
It was found that in big wholesale markets in Kolkata, Mumbai, Delhi,
Chandigarh, Agra, Varanasi, Kanpur, etc. drugs, particularly injectable are
sold in cheaper price. People do not know how this happens. There are
instances that the big drug companies when manufacture their drugs under
third party license in another company’s factory, there is always scope of
evading excise duty. There is some other process when large amount of
drugs are sent from one state to other where sales taxes are lower. Thus it is
established that selling drugs evading of government duties and taxes are
possible and finally it is found that there is proliferation of counterfeit drugs.
It was published in the newspapers that the authorities have unearthed big
rackets in the outskirts of New Delhi those are counterfeiting the well-known
brands of drugs. Consumers can not identify these spurious drugs since
they are made with high counterfeiting skill. Even if someone doubts that a
drug is not effectively working and it may be spurious, there is no proper
way available for him to file complaint and ask for immediate remedial steps.
Now it is admitted by the Drug Controller of India that a very high percent of
spurious drugs have flooded the market which has a serious health hazard
21
■t?f 0 7 J33po2^~ < .
potential. In a recently issued circular to State Drug Controllers, the Drug
Controller of India informed that they had detected 78 spurious drugs of
different brands including those of very well known companies. Some
instances from the circular are given below.
Drug
Batch No.
Amoxy Caps, 500mg
G9564
Cadila
60600X 10’s
Acilox, 150mg
0179
Cadila
12240 X 10’s
Acipro, 500mg
ACTM0219N
Alkem
9210 X 10’s
Cipolx,250mg
Y91203
CIPLA
6630 X 10’s
Combiflam
210265
Hoechst
1032 X 10's
Rulide150mg
020024
Hoechst
4450 X 10’s
Dolonex DT
020-04105L
Pfizer
3690 X 10’s
Oxytetra 500mg
020-51257L
Pfizer
1475 X4’s
Phexin, 500mg
M135
Glaxo
110X10
Becadex Forte
H4467
Glaxo
1100 X 10’s
Zinetac,150mg
NE606
Glaxo
955 X 10’s
Duphaston
LJ3176
Dupharlnterfran
2700 X 7
Ciprobid
ZH9028
Zydus Cadila
2510X10
Mobizox
JO1000
Ranbaxy
10450X6’5
Nimegesic
91843
Alembic
10800 X 10’s
Esgipynn
9J136
Sarabhai Piramal
13800X 10’s
Company
Quantity
Drugs are procured by the Public and large institutions like hospitals in
cheaper rates since they purchase in large quantities under rate contract
and in some cases, drugs supplied to these sector bears no taxes. It is
made conditional to drug companies that they would not sell drugs cheaper
than the prices offered to the institutions. Generally it is required to write on
the labels of the drugs supplied to institutions that the retail chemists can not
sell them. There are many instances that the companies in the name of
institutional sale raise bills and the drugs are sold to the wholesalers at
much cheaper prices.
In adopting such unethical business practices, large number of the drug
companies big or small are involved. This system involves top Executives
down to the local level mangers of the company. To compensate the
undeclared discounts, adjustment is made by the managers of the company
by providing physician’s samples in large quantities since no taxes are
imposed on the samples and cost of samples are considered as expenses
of the company for promotion which again reduces income tax burden.This
22
situation has spread so widely that the industry is itself facing crisis. It has
become difficult to conduct normal business without involving in dumping,
unauthorised discounts, selling of institutional supply in the open market,
etc.
It was first FMRAI which pointed out the government to take steps to stop
unethical business practices and demanded for inquiry by CBI. In 1997 the
Secretary General of Organisation of Pharmaceutical Producers of India
(OPPI) wrote to the Drug Controller of India drawing attention about this
black-marketing sales at discount prices without any bills which they states
as illegal. They also mentioned that spurious and substandard drugs might
also be sold in such a situation causing tremendous health hazard and risk
to the public at large. Further this sales deprive state exchequer of genuine
receipt of sales tax. This was enough for them and no further action is
possible since their member companies are thickly involved into such illegal
operation. The media reported that a group of large companies has recently
formed investigating set up with Mr. K.P.S. Gill, retired Police Commissioner
of Punjab as its head to detect the spurious drug racket. But so far, no
outcome has been heard from them.
Role of Multinationals
At the time of independence, the multinational drug companies shared
about 90 per cent of the market. Report of the Hathi Committee exposed
that these multinationals established their business with a meagre amount
of invenst ment and thereafter they have spent nothing but developed a
large business in pharmaceuticals industry. They have repatriated large
amount of money in the name of royalty, technical know-how, rawmaterials
cost etc. Initially they used to import all drugs but after the establishment of
public sector drug companies and due to Indian patents Act, 1970, they
were compelled to establish manufacturing units in our country. The units
they installed, in course of time became old and no innovation of technology
was tried to update these plants. Only the capacity of the plants was
expanded. In contrast, the Indian companies introduced new technology
and established modern plants. Thus they were able to compete the
multinationals and could share Indian market almost equally with the
multinationals. Not only this, Indian companies are now exporting a number
of drugs to the developed countries including the USA.
It was the multinationals which influenced in making the WTO agreement.
They are now happy that there will be no compulsion for producing drugs in
India following the terms of the agreement. Even before the amendment of
Indian Patents Act, 1970, these multinational companies are either closing
their plants or selling them to other Indian companies. As a result, large
number of pharmaceutical units are closed.
23
CIBA Giegy:
Closed its Bhandup Plant
Sandoz:
Closed its plant at Tahne
Boehringer Mannheim:
Closed its plant at Thane
Roche:
Closed its Plant at Tardeo
Parke Davis:
Closed its plant at Saki Naka
Rhone Poulenc:
Closed all plants
Boots:
Closed all plants
Abbott :
Closed all plants
Glaxo:
Closed its plant at Thane and Worli
Pfizer:
Closed its plant at Thane
Burroughs Welcome:
Closed its plant at Bhandup
Thus nearly 40,000 workers, technicians and scientists were thrown out
of job from these plants. The drugs which were produced by the
multinational companies in these plants are now mostly being imported
taking the advantage of liberal import policy of the Govt.lt is now found that
the multinational drug companies are now importing many drugs which
were once produced here. According to Director General of Commercial
Intellegence, since the country signed WTO Agreement, import of finished
formulations have surged from Rs.173 crores to Rs.680 crores during the
nine months this year.
Drug Policy
After through debate in the Parliament, the Govt, constituted Committee
on Drugs & Pharmaceuticals known as Hathi Committee. This Committee
made certain important recommendations. The Committee observed that
the multinational drug companies are marketing many irrational drugs that
too at a highly inflated price. They recommended that initially the equity of
the foreign companies should be brought down to 26 percent and then
gradually they should be nationalised. The Committee also prepared a list of
113 essential drugs and recommended that the Govt, should ensure
production of essential drugs by giving priority to the Public Sector drug
companies.
First Drug policy was declared by the Govt, in 1978, which gave priority to
Indian sector particularly the Public Sector. But the Policy ignored many
important recommendations needed for the people. The policy helped the
Indian sector to grow substantially. Govt, research institutions like Central
Research Institute (CDRI), National Chemical Laboratories (NCL) and
24
Indian Institute of Chemical Technology (IICT) developed process
technology of many essential drugs which were taken up by the Indian drug
companies. As a result, India became almost self reliant in production of
essential drugs. Not only this, Indian companies are exporting large number
of drugs even to the developing countries including the USA.
Following the liberalisation policy, the Govt, has abolished many decisions
causing serious crisis to the Indian sector.There is hardly anything left in the
original drug policy now.
Change in the Drug Policy:
The government of India has started to make ail efforts for changing
drug policy. Through a secret document titled as ‘Pharmaceutical Policy2001’, the Govt, have shown their real intention to serve the interest of
the multinational drug companies more vigorously. The document has
been kept secret so that at opportune moment this can be turned into a
policy in haste. It is necessary to expose this move of the Govt. The
document was prepared on the basis of the report of the two Committees
formed earlier by the Govt.-Drug Price Control Review Committee and
Pharmaceutical Research and Development Committee. Therefore it is
obvious that the future policy will remain confined to these area only.
It was mentioned at the very beginning of the document that in the era
of globalisation, regulatory control of the Govt, in the pharmaceutical
industry would deter growth. The document admitted that many decisions
have already been taken by the Govt, which affects drug policy. They are-
•
Abolition of industrial licensing: No Industrial licensing would be
required for bulk drugs, their intermediates and formulations if cleared by
Drug Controller General. This decision has affected drug industry
adversely. Withdrawing of industrial license has forced the country to
import more. Reservation of certain drugs for production in the public
sector has been withdrawn and its consequences are already felt. Now
any one, multinational or Indian sector would be allowed to manufacture
any drug or intermediates in our country.
•
Foreign InvestmenbThe decision that foreign direct investment with
100 percent equity in pharmaceuticals industry was taken some time
back. Earlier only 39 percent foreign equity was allowed. Instead of
attracting foreign investment, the industry experienced a wave of de
industrialisation. Nearly all multinational companies have closed their
production plants in India. But all of them had maintained their activity.
25
Now with the given chance of 100 percent foreign equity investment
without any compulsion of production activity, these companies will
happily import drugs from their parent county.
•
Imports: Earlier drug policy had put some embargo on free import
of finished formulations. The Govt, has withdrawn all restriction on import
of formulation. This has allowed a sharp rise of import of drugs in our
country in the last three years. There will be further jump in this figure in
the near future.
•
Foreign Technology Agreement: There will be automatic approval
for foreign technology agreement in the cases of bulk drug production.
There has been no response from the multinationals in technology
agreement following this liberalisation. On the contrary, import of bulk
drugs have increased to such extent that the Indian inustry is now
demanding for imposition of dumping duty on several imported bulk drugs.
It is recommended in the document that a corpus fund would be formed
with Rs. 150 Crores which will provide funds for research. It was not clearly
spelled as to from where this fund would come. It is obvious that this fund
would be generated through tax on the people. This fund will be given to all
private companies-national and multinationals. It means that people will pay
for research but the drug invented would remain patented for which people
will have to pay high prices. There is no similar system in any other
countries. For managing this fund formation of Drug Development
Promotion Foundation has been proposed. Nothing has been proposed to
fund the Govt, drug research units which have invented process technology
for production of largest number of essential drugs so far. It shows that the
Govt, is no longer interested to encourage these premier institutions. In the
document, definition of research based industry is kept in such a manner
that virtually no Indian drug industry would be able to utilise such scope. For
example, in order to enable such facility a company must have 100 Indian
research scientists and should have ten patents to their credit. Ultimately,
this advantage would be utilised by the multinational companies only.
Most of the recommendations in the document have been made in the
area of drug prices. The document in the tune of the industry stated that it
aims ‘to remove rigors of Price Control particularly in view of the ongoing
process of liberalization.' Drug prices Control Order (DPCO) is now
applicable to a meagre 63 drugs only. The spate of price rise has now
become enormous. The document also spelled that any abnormal rise of
prices would be kept on watch. But how the prices of drugs beyond price
control could be performed has not been thought of. The document
26
mentioned that the price control on drugs will remain vey notional only.The
other process of the existing DPCO was that price of the single brand is
controlled if its sale goes more than Rs. 4 crores in a year. The document
recommends that this limit should be raised to Rs.20 Crores. With this
immediately about 40 top selling brands would go out of price control.
Anxiety was expressed in the document about the high prices of the
imported formulations. It recommended that not more than 50% profit to
the landed cost of the imported drugs would be allowed. It is paradoxical
since the largest amount of formulations are imported from the
multinationals, the prices would be kept high much before importation.The
multinational drug companies in number occasions were caught for
inflating prices through transfer pricing system.
It was admitted in the document that the manufacturers provide a large
amount of commission to the wholesalers which should be controlled.
There is no process so far evolved by the Govt, to control the
unannounced sales commission given by the drug companies. Apart from
the declared commission, drug companies provide excess goods as
undeclared commission where no documents are maintained. No
measure has so far been recommended in this regard.
There is very little mention in the document about quality control. It was
proclaimed that the Ministry of Health and Family Welfare would
progressively benchmark the regulatory standard against those adopted
in developing countries, for manufacturing. With the present inadequate
machinery, it is impossible to assure quality control watch. The large
amount of fund required for developing testing laboratories and the drug
control structure in the sates, it is beyond imagination that how the Govt.
can think of benchmarking the standard to those of the developed
countries.
The 'Pharmaceutical Policy-2001 ’ envisaged in the document is simply a
devise to provide more advantages for the multinationals and complete
destruction of self-reliance of the drug industry. This policy by all means
should be opposed.
Interestingly, the document made its recommendations with a
conjecture that Indian Patents Act has been changed totally as envisaged
in the Patents Amendment (Second) Bill. The fact is that the global opinion
against the IPR chapter of WTO agreement had forced the Doha
Ministerial meeting to agree to reconsider changing certain provision for
the shake of people's health.
27
People's Health Assembly
In the world of commercialisation of health and
gradually diminishing of rights to essential
medicines, people of different countries are fighting.
In our country various groups and individuals jointly
decided to campaign on health rights throughout the
country. After a year of joint campaign, they came to
Kolkata where a historic rally was held for the first
time by the end of November,2000. They discussed
on verious aspects of health and drugs and prepared a ‘People’s Charter for
Health’. Nearly 2000 delegates from all over the country decided to launch
campaign on this charter continuously. After this assembly, 200 delegates
from India went to Dhaka, Bangladesh to attend international People's
Health Assembly. 1400 people from 93 countries attended this assembly,
analysed the cause for failure of the international agencies like World Health
Organisation , UNICEF, etc. in resisting the commercialisation of health and
from deterioration of helath of the people. The Assembly decided that global
movement would be launched through co-ordiantion among the nations.
The Assembly adopted a People’s Health Charter for guiding the future
movement and shapeing of demands.
Peoples Charter for Access to
Essential Medicines
No privatisation of the public healthcare system.
More per capita budgetary expenditure on healthcare.
Increase the number of National Diseases Eradication Programmes
and enhance budgetary support to each programme.
4. Revitalise public sector drug companies.
5. Develop a public distribution system for cheaper essential drugs.
6. Formulate a rational drug policy under the aegis of the Health Ministry.
7. Ensure production and availability of all drugs in the national Essential
Drug List.
8. Control imports of bulk drugs, intermediates and finished formulations
and rationalise duties on imports. Restrict import keeping in view the
needs of domestic producers.
9. All drugs should be assessed periodically, in order to ban hazardous
and irrational drugs.
10. Formulate a new Drug Prices Control Order to bring all drugs under
price control and to reduce prices of essential drugs.
11. No change in the fundamentals of the Indian Patents Act,1970, that
allow domestic manufacture of patented drugs to counter monopoly,
high prices and imports.
1.
2.
3.
28
Utilisation of third party licensing by big companies to evade taxes,
reduce employment and utilise cheap labour should be stopped.
13. Uniform tax structure for all drugs, maximum retail price should be
inclusive of all taxes.
14. Strengthen quality control mechanisms to stop proliferation of spurious
and sub-standard drugs.
15. Enquire into corrupt practices by drug companies involving tax and duty
evasion.
16. All government purchases should be made through a central
procurement system, based on the list of essential drugs.
17. No Foreign Direct Investment (FDI) be allowed in the pharmaceutical
sector, except where there is clear indication that such investment will
be accompanied by transfer of technology not available in the country.
12.
Background of People's
Charter for Essential Medicines
The government of India has changed certain policies and declared that
some other policies would be changed which will have direct effect on
healthcare system of our country. To ease investment of the multinational
insurance companies, the government had adopted Insurance Regulatory
Authority Act. This is step to introduce private health insurance so that the
government can withdraw its investment in healthcare for the wage earners.
The government have also stated that the number of drugs under Drug
Prices Control Order (DPCO) shall be further reduced
Public healthcare system is under attack. In most of the states central
government’s investment in healthcare has been stopped. Instead, states
are compelled to accept World Bank’s loan. This loan envisages that the aim
of such loan is to develop private led health infrastructure in states. Some of
the conditions of this loan is to introduce users’ charge system purchase of
medicines for foreign countries. Money invested by the World Bank has to
be realised for the patients and the debt is to be repaid within 25 years with
5 percent interest.
Already actions are taken in the districts and states to gradually shift the
administrative responsibility to private organisation and groups tasking
away the role of authorities elected by the people. This will pave the way for
the commercial enterprises to take over the public health infrastructure.
Interference of the World Bank in health has caused forced changes in
national health policy and ruined better healthcare systems in the countries
of Latin America which is to some extent admitted by the World Bank also.
Therefore the government should stop such investment of World Bank and
provide responsibility to manage health system keeping the objective of
primary health care by giving more power to local self-governments.
Government’s budgetary investment in health has come under two
percent of the budget. Per capita investment in health is only Rs.57 a year
whereas the Govt, spends ten times more in military investment. India’s
expenditure in health is one of the lowest in the world. The Govt, has not only
29
reduced expenditure for eradication programme for diseases but reduced
total number of programme also. While spread of disease had not remained
confined in the traditional areas but epidemiological concern is fond in
newer diseases. Therefore national diseases eradication programme
should be expanded for more diseases and expenditure should also be
enhanced.
Instead of the appropriate Ministry, the Finance Minister announced that
the drug policy would be changed. This is simply under the direction of the
industry not for better health of the people. Since first introduction of drug
policy in 1978 subsequent decisions of the Govt, in this area was to curtail
the provisions of the policy to accord the benefit of the industry. Virtually the
drug policy has now been made redundant. The Govt, had appointed two
committees- one to prepare policy on R & D and the other for review of the
DPCO. Both the committees have prepared their recommendations. The
committee on R & D among other recommendations proposed to constitute
a corpus fund of Rs. 150 crores for its distribution on R & D of private farms.
Role of private farms in developing new drugs is devastatingly poor.
Whereas the Govt, research institutions contributed significantly in
developing process technology for nearly all essential drugs rendering
Indian drug industry almost self reliant.They have also invented several new
molecules. The Govt has not yet decided as to how to develop this large
fund of Rs. 150 crores. It is apprehended that this fund would be created by
imposing more taxes on drugs. Thus private enterprises will be allowed to
benefit more by increasing the prices of drugs. It is therefore needed that the
Govt. Should invest more for research by the Govt.'s own research
organisations.
Till today, largest drug manufacturing structure is maintained by the public
sector. The Govt, rented out most of the production units of Hindusthan
Antibiotics Ltd. to private enterprises who are making profit out of it. Indian
Drugs and Pharmaceuticals Ltd. (IDPL), the largest drug producing
company of India has been kept non-functional since 1996. Now BIFR had
recommended to close this company. These two public sector companies
have been producing largest number of drugs helping the country to attain
self reliance. These companies also helped small scale drug units by
supplying rawmaterials at cheaper price. Keeping these companies idle has
forced the country to import many drugs. It is therefore needed to prioritise
the role of the public sector drug companies by revitalising them which also
include Bengal Chemical, Bengal Immunity and Smith Stanistreet for
producing bulk drugs, vaccines, and formulations at cheaper price.
The Govt, should also establish public distribution system of drugs. In this
vast country, access to drugs in remote villages does not exist. All essential
drugs at subsidised price should be distributed through chain of retail stores
in the interior places.
Keeping aim to rational use of drugs, the Govt, should prepare a new drug
policy. Regulatory authority for this policy should be the health ministry
instead of the industry ministry. The policy should aim to cater the need of
drugs based on the list of essential drugs. It should ensure production of
quality drugs at cheaper prices and minimise import.The policy should also
30
devise process of utilisation of the rational drugs by the medical profession
and pharmacists. Large number of hazardous and irrational drugs floods
present-day market. This has been possible due to laxity of Govt, law and by
the high-pressure unethical marketing practices by the drug companies. In
absence of appropriate law and vigilance of the Govt, the manufacturers are
freely promoting these drugs without following any ethics. Though the Govt.
assured World Health Organisation that the Govt, would prepare
appropriate regulation following the ‘Criteria of Ethical Promotion of
pharmaceuticals’ prepared by WHO, but no such steps have been taken so
far. In the recent years tendency of marketing highly priced new drugs has
spouted up. Most of these so called new drugs do not have any significant
new efficacy than the existing drugs but are priced high and fetch more
profit. Various kinds of inducements are used to promote these drugs. Many
of these drugs are imported. Therefore the drug policy should include
criteria of ethical drug promotion and stop import of hazardous and nonessential drugs.
Due to liberalisation of import, the multinational drug companies are
closing down their production units in the country and these drugs are either
imported or partly being manufactured in the small scale companies. This
has enhanced import of drugs manifold in the last two years. Closure of
large production units has caused unemployment of thousands of workers.
Further, merger, acquisition and brand selling had closed many production
units. On the other side investment in the industry remained insignificant. All
these situations together have created severe unemployment and severe
loss of job security. Cheaper bulk drug import has also forced closure of
many medium sector bulk drug companies. Therefore the Govt, should take
proper measures to stop rampant import of bulk drugs and impose anti
dumping duty. Drugs, which are manufactured indigenously, should not be
allowed to import. Import norm for drugs should include validity clause and
remodelling of duty structure should be worked.
There has been sharp rise of prices in the recent years. Prices of
essential drugs like anti-TB, anti-leprotics, cardiovascular drugs are rising
every year even more than the rate of the raise of prices of other
commodities. Span of DPCO is reduced from 387 drugs in 1979 to only 75
drugs in 1994. There has been raise of prises of drugs under control
category also. The National Pharmaceutical Pricing Authority (NPPA)
reduced prices of some drugs after examining cost data provided by the
manufacturers. Most of the manufacturers are reluctant to submit cost data
of drugs. Apart from this, the Govt, machinery for analysing cost data are
highly inadequate. Taking this chance many drug companies are openly
flouting DPCO and enhancing prices of drugs. Even though the Govt, has
declared that they would reduce the span of drugs under DPCO. The review
committees on DPCO constituted by the Govt, only worked up on the
procedure of quickening the price rise. Industry has attacked NPPA which
would be liquidated soon. It is therefore needed to formulate new DPCO
aiming to reduce prices of all essential drugs and to control prices of other
drugs also.
Indian Patents Act,1970 has helped the country to achieve self reliance in
production of drugs. This has also helped introduction of new drugs almost
simultaneously to their first introduction in the world market. This act has
encouraged development of process technology by the Govt, research
institutes for nearly all essential drugs. It has also helped reducing the
prices of drugs. The Govt, with a plea of threat from WTO has been all set to
change the Act thoroughly, which will reverse the benefits achieved due to
this Act. Even now, many provisions of WTO can be bypassed by carefully
pursuing the need of the people for survival. The clauses of compulsory
licensing and automatic licensing right are vitally required for self-reliance of
the industry. Scope of parallel import of drugs should not be given up. In the
recent occasion some countries have withstood the threats of the
multinational drug companies to provide the essential drugs to the people.
India should not succumb the unique benefits of Indian Patents Act, 1970.
The Govt, had allowed the industry to manufacture drugs in small
companies even if they have own manufacturing units. Taking this
opportunity many large companies have closed their factories. This third
party manufacturing provides the big companies to utilise exemptions
provided to the small scale. They also exploit the cheap labour cost of the
small scale. On the top, the question of quality and giving rise to spurious
drugs has now become a big question. Complaints have been made that
with this process large quantity of drugs are sent to market without paying
any taxes and duties. This has posed a serious question on health hazard.
Demand was made to the Govt, to constitute enquiry on selling spurious
drugs and selling of drugs with unannounced discounts and by various
unethical process of dumping drugs in the market. No actions have been
taken by the Govt, so far. Both the Govt.s at Centre and states are loosing
several crores of rupees in taxes and duties because of these unethical
sales. Even the associations of the industry and trade had not denied that
such activities are taking place.
The tax structure on drugs is anomalous. It varies from state to state
which is another reason for illegal proliferation of drugs from one state to the
other. While buying drugs people are charged according to the whim of the
sellers. It is therefore needed that there should be uniform tax on drugs and
the price printed on the drugs should include all taxes and should be uniform
everywhere.
Purchase of drugs by the Govt.takes place in various level and states. If
the Govt, regulate the purchasing procedure centrally it provides very big
bargaining power. The Govt, can reduce procurement price by directly
bargaining with the industry. This kind of procedure has helped reducing
prices of drugs in many countries. ■
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