The National Commission on Macroeconomics and Health in its report submitted to the government has said that 10 out of 25 top selling brands of medicines in India are irrational, non-essential or hazardous. The list includes Becosules and Corex manufactured by Pfizer, Liv-52 of Himalaya, Dexorange manufactured by Franco-India, E-Merck's Polybion and Evion, Combiflam of Aventis, Ranbaxy's Revital and Heinz's Glucon-D.
The commission co-chaired by Finance Minister P. Chidambaram and Health Minister, Dr. Ramadoss has recommended that all these brands and their equivalents should be weeded out as their consumption results in an additional burden on poor patients.
According to the report, Becosule has irrartional vitamin combination and Corex has irrational cough mixture. Liv-52 is ineffective liver drug, Digene is futile antacid, Combiflam is irrational painkiller, Polybion has irrational vitamin combination and Revital is a ginseng product.
Quoting the data collected by the National Sample Survey (NSS), the report says that over 5 per cent of the total average household expenditure in the country goes into health spending. Out of this, 75 per cent is spent on medicines. Expenditure on drugs is higher in rural areas (83 per cent) and in less-developed states like Orissa (90.56 per cent). Thus, the share of drugs in the complete treatment is extremely high and therefore medicines need to be effective and costs needs to be reduced.
It further says that the Indian pharmaceutical market is flooded with irrational drugs, including Fixed Dose Combination (FDCs). Expensive nutritional supplements, tonics, vitamins, calcium, hemoglobin and iron preparations form a notable share of the total sales of medicines. Multinational drug companies have a dominant presence in the sale of unessential and irrational medicines. These formulations need to be banned, it says.
Commenting on the issue, Dr Prakash Kawli, President, Indian Medical Association (IMA) said, "The drugs listed are being used for several years and we still recommend these drugs. Government should conduct quality control tests before taking any decision on this issue. Unless proved, how can we believe that the drugs are hazardous? There are some drugs like Becosule, the combination of which was altered few years back on government intervention and now the present combination is said to be irrational."
The commission was shocked at a huge difference between the prices paid by public hospitals and individual patients for the same medicine. Individual patients pay 100 to 5600 per cent more. Even in the case of drugs used in the treatment of cancer, the price difference was 275 to 1166 percent. These figures give an idea of the "exorbitant trade margins and sky-high profits in the drug industry," the commission reports.
The report says the worldwide drug prices are subject to controls like ceiling on profits, fixed margins to distributors and retailers, cap on promotional expenses and lower taxes on medicines. The commission has suggested that all drugs in India should be under price control. The control should not be limited to 'Essential drugs' as the industry could then simply switch its production to the uncontrolled category.
Dr. Kawli noted that the hospitals buy the stock in bulk amount and therefore product cost can be reduced. In other cases the drugs are purchased in small quantity. Further, in hospitals there are arrangements to store different drugs at different temperatures, which is not possible in clinics or medical stores. There are various discounts given to the middlemen including the chemists. Therefore, the cost of the same product may vary in hospitals and when purchased individually.
The trade margins are among the highest in the pharmaceutical industry in India ranging from 30 to 1000 per cent. The national commission recommends that trade margins should be fixed at reasonable levels from 30 per cent to a maximum of 45 per cent for the distribution and retail chain. The government has been requested to form a committee of experts to review irrational medicines and wipe them out.
Many countries such as France, Britain and Spain have placed restrictions on promotional expenses ranging between 9 and 14 per cent of the total sales. In India, companies spend huge sums of money on promotion and even more significantly on illegal, unethical inducements to prescribing authority. These practices need to be curbed, the report stated.
The report also recommended that there should be no Value-Added Tax (VAT) on un- branded medicines sold under generic names.