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Price cap on medicines

Kashmir Times. Dated: 2/23/2017 2:05:48 PM

Well considered and monitored price regulation is a positive step but more needs to be done on maintaining transparency

In the absence of a clear and firm policy on the part of the NDA-government on control and de-control of life saving medicines and medical equipment, there has been a steady increase in their prices in the market causing immense inconvenience to the patients in India. Moreover, knee-jerk reactions from the centre to de-control costs of life saving medicines and drugs particular close to three-years back contributed in three-time price hike of all the medicines, which are required on daily basis. Similarly, capping the prices of medical stents, which are used to treat coronary artery disease, by the National Pharmaceutical Pricing Authority (NPPA) is an extreme regulatory measure necessitated by the market failure that afflicts the overall delivery of health care in India. Rising costs of these equipments have led to impoverishment of families and litigation demanding regulation on the prices. Given the overall dominance of private, commercial, for-profit health institutions, and the asymmetry confronting citizens, correctives to bring about a balance are inevitable. But in this process, the NPPA has forgotten to take into account the quality of the stents available in the market. Fixation of the prices in one bracket for all sorts of stents does not go well down with the beneficiaries. This is mainly for the reason that all sorts of stents cannot be prices at the same level when the quality of the equipment is different. There are important pointers to the price regulation because of the fact that nearly two-thirds of the high out-of-pocket expenditure on health incurred by Indian masses went towards drugs; even the meagre research data available showed that there was irrational use of medical technologies, including cardiac stents and knee implants. Regulated prices can, therefore, be expected to make stents more accessible to patients who really need them, helping them avoid using up the weak insurance cover available, while also reducing the incentive for unethical hospitals to use them needlessly. Moreover, there is also an important fact attached to it that in the government run hospitals, the procedural costs are less and prices of stents are on the higher side whereas in private hospitals the procedural costs are high and costs of equipment are on the lower side. What is going to happen in this scenario is increasing pressure on private hospitals where equipment costs will be lower but their procedural costs will go up. The patients availing treatments in the government run hospitals will be definitely put to disadvantage.
On the other hand, it is important to note that there are over 60 million diagnosed diabetics in the country, and the average age at which the first heart attack strikes Indians is 50, a decade earlier than people in developed western countries. At appropriate prices, and with a health system that pools the cost among all citizens, it would be possible to provide access to stents and other treatments for all. Health-care providers often demand market-determined pricing of medical technologies on the ground that newer ones will not be available under a regulated regime. In the case of cardiac stents, this argument does not hold water since stakeholder consultations held by the NPPA last month revealed that there are 'huge unethical markups' in the supply chain. It would serve the cause of medical innovation if costing is transparent, and a system of risk pooling is introduced to help patients get expensive treatment without high out-of-pocket spending. It was estimated five years ago by the Planning Commission's expert group on universal health coverage that raising spending on public procurement of medicines to 0.5% of GDP (from 0.1%) would provide all essential medicines to everyone. What is necessary, then, is for a two-pronged approach to improve access to medicines and technology. At present, allocation in budget for healthcare is far less compared to the developed countries and under given restrictions, it becomes extremely difficult to medical care to patients. The centre should monitor expenditures jointly in partnership with the community, use regulation where needed, and raise public spending on health. Many developing countries have moved ahead on this path. Well-considered and monitored price control is a positive step, but more needs to be done. The latest measure provides an opportunity to expand the availability of stents, and by extension angioplasty procedures, in the public health system. The government hospitals should offer cardiac treatments uniformly. This should be a priority programme to be completed in not more than five years as has been spelled out by the centre in the budgetary proposals made early this month.