Is DPCO 2013 the dark side of current order surfacing?

Pharma sector has witnessed in a state of confusion for the last few months after the implementation of new DPCO 2013. In spite of legitimate concerns of pharmaceutical industry and the practical difficulties to cope up with the National Pharmaceutical Pricing Authority (NPPA) and Govt. of India went ahead and pressed the current DPCO which will include 348 active ingredients contained in 614 dosages. One would have understood if the prices were modified from the batches manufactured after the announcement date but instead the order was applicable even to unsold stock lying at lakhs of retailers spread across this country. Recalling all stocks and replacing with new prices within 45 days was a herculean task. Almost all the companies tried their level best to comply in spite of huge financial losses, logistic burdens and the periods of unavailability affecting their business and making it a loosing proposition. But, this is not all. The real negative and dark sides of this order may be surfacing now and can have serious impacts in the long run.

Why was the hurry to increase the number of price controlled drugs from a mere 74 to 348 drugs at one go? It should have been in phases and would have been applied first to chronic therapies, costlier medicines and for drugs used for epidemic diseases affecting mainly poor class of people - like malaria, TB etc. But, unfortunately the list also contains the low costing and short term therapy medicines whose prices are already at lower side due to stiff competition in the market. Take the examples of paracetamol or ibuprofen which are costing less than a rupee and many others which are very effective and well accepted drugs like cefixime, cephalexin, azithromycin, ciprofloxacin, ofloxacin, amoxicillin and its combinations with clavulanic acid, cetirizine, omeprazole, pantoprazole and so on.

Unfortunately, all this is happening in a period where the Indian rupee is falling sharply and all the measures to control it are finding ineffective. This has deleterious impact on pharmaceutical business as many of the bulk drugs and raw materials need to be imported from other countries and their costs has gone up by many times. Apart from that the rising fixed expenses due to high inflation has increased the manufacturing costs of almost all the medicines including the drugs mentioned in new DPCO 2013 order. The serious look may reveal that the manufacturing cost is almost touching the selling cost and still the companies have to sell these drugs to maintain their image and activities in the market. If one adds the marketing costs, which are around 20 to 40 per cent of the total business, selling these medicines is actually inviting the losses rather than profits but still they have to sell till they find the other alternatives. And seriously these companies are searching other alternatives which may prove to be detrimental to all of us. Many companies have changed the inside compositions or added line extensions stopping the promotion of formulations appeared in the order. And they are not wrong. Why should they sale the medicines which are loss making to them? And the period may not be too far from now that these medicines will not be promoted and just vanish from the market in spite of their best efficacy and proven safety for many decades. If these drugs are not available in the market, then what the doctors will do?

Yes, here may be the beginning of long lasting impact affecting in a negative way. The doctors may be forced to change their prescriptions to other drugs which may not be as good as earlier drugs and still costing more as they are not in DPCO list. Here is simple example what could be the scenario. Paracetamol and ibuprofen are the maximum selling drugs and are the choice of medicines in most of the cases to relieve pain and fever. But, if these drugs are not available as they are in DPCO then the next choice may be nimesulide which costs more and still is unsafe for many patients. In fact it is banned in many countries due to its side effects but freely available in India and the doctors may be forced to prescribe it even though they do not prefer it as a first choice.

Secondly, all the companies will be in search of new medicines which are not in the list of new DPCO 2013 and their prescriptions may increase the medicine costs for all including even the middle as well as poor class in the society. This will totally defeat the good cause of price control and in fact may prove to be a bane rather that a boon to common people.

Last but not the least. There is a big concern for many medium or small scale pharmaceutical companies which form the big chunk of this industry providing employment to millions. This is very important as these small entrepreneurs are in big numbers (8000 plus small scale units) compared to just 250 large scale units. These companies may not be able to introduce new molecules due to high research and development (R&D) costs or new formulations due to higher competition and ultimately will have to shut down their business. Then who will be the ultimate gainers? Not the poor people, but few big Indian companies and mostly the foreign multinationals. Is this the one what we want?

And if not, then the Government of India and the NPPA must once again relook the current order and take the corrective steps to make it a real pro-people boon order rather than a bane for the good healthcare of all of us.