Industry experts expresses their concerns and reservations about the inappropriate focus on pricing in the nation’s pharma policy as they fear that it will have negative impact on the industry and on efforts to boost universal healthcare access. They stressed that a cost-based pharma pricing policy would be counterproductive and further hinder efforts to improve access.

In a separate move, three industry bodies Organisation of Pharmaceutical Producers of India (OPPI), Indian Pharmaceutical Alliance (IPA) and Indian Drug Manufacturers Association (IDMA) have jointly demanded that the government stick to its draft policy to fix maximum retail price of drugs based on market-based model.

Daara Patel, secretary general, Indian Drug Manufacturers Association (IDMA); Amit Bakliwal, managing director, IMS Health; and Kewal Handa, managing director,  Pfizer India stressed that with drug prices in India already one of the lowest worldwide, it is more important to focus on the core issues that impede access.

“Attempts to advance healthcare access via cost-based pricing miss the point that lack of infrastructure and appropriate delivery systems are needed to boost access. Moreover, Indian pharma companies have always risen to the occasion and supplied medicines free of cost to needy patients or for deserving causes. To facilitate access, the government could abolish excise duties and taxes on the free medicines donated by pharma companies,” said Daara Patel, secretary general, IDMA.

Apart from this, Patel said the government could encourage public-private partnerships to provide universal access to healthcare, since it was not possible for public sector entities to themselves address all the complex issues involved in improving access.

Amit Bakliwal, managing director of IMS Health, concurred that cost-based pricing was not the proper solution to better access. He pointed out, “In spite of India having a high disease burden, delivery systems have not improved in the country, impeding access. Although affordability is part of access, individually attacking drug prices is not the solution. Given the importance of research and innovation in the pharma industry, it is necessary to strike a balance between access and innovation. We also need to understand that even having free drugs will not solve the issue of access, unless the basic problem of inadequate health infrastructure is not addressed squarely.”

According to Kewal Handa, managing director of Pfizer India, “It is not only a question of making medicines affordable, but also making them affordable in the right place for the right people. Cost-based pricing would simply not achieve this objective. Going by the state of healthcare infrastructure in India, efficient healthcare delivery is far more critical than the pricing of drugs. Furthermore, the focus is more on treating the disease rather than preventing it. Before the issue of pricing comes to the fore, it’s imperative to work for ensuring that adequate medical infrastructure is developed at a fast pace. This includes augmenting the number of doctors, nurses, midwives and auxiliary healthcare providers.”

It is best to leave pricing to market forces, according to Handa, rather than trying to impose a cost-based pricing model that may finally fail, as it did in many nations, including the Philippines. The pharma veteran is also averse to the idea of treating imported drugs on par with generics.

“Every nation has its unique inbuilt cost structure that takes into account aspects such as quality, research, and delivery systems. Attempting to subsume diverse elements under a single price spectrum undermines competition, which underpins the spirit of competitive pricing and affordability. Any imported drug that is overpriced would not survive, pricing itself out of the market. Cost-based pricing may only lead to unscrupulous manufacturers inflating input costs, while those who go by the book may find the margins unviable and thereby withdraw from certain categories. This could finally affect the quality of drugs and lead to the rise of substandard drugs that endanger the lives of patients. Such a scenario would only make the mission of universal healthcare access all the more distant,” concluded Handa.