The Union health ministry has reportedly taken a serious note of the practice of pharmaceutical companies charging 'huge' profit margins and has urged the Department of Pharmaceuticals (DoP) to bring all drugs in the national list of essential medicines under price control.

The Ministry has revealed this following widespread criticism, especially by the public interest groups, that some companies were charging upto 500 per cent of profit margin to fleece the customers and the Government was not taking any concrete measures to curtail the practice.

“Government is aware that some Indian companies are charging huge profit margins for some drugs. The Government has taken serious note of this fact,” Union health minister Ghulam Nabi Azad said in the Parliament recently when the issue came up.

“The Ministry of Health & Family Welfare has prepared the National List of Essential Medicines (NLEM), 2011 consisting of 348 medicines. This Ministry has requested the DoP, which administers the Drug Price Control Order (DPCO) to bring all drugs in the NLEM, 2011 under the price control,” he added.

DPCO is a government order under Section 3 of the Essential Commodities Act, 1955, to control the prices of drugs. In the 70s, there were 347 drugs listed as essential life-saving medicines and were under the DPCO. The government admitted that more than 300 drugs were under DPCO in the early 1980s, which was subsequently reduced to 140 in 1987. At present, prices of only 74 bulk drugs and formulations are under the price control regime. Once a medicine is brought under DPCO, it cannot be sold at a price higher than that fixed by the government.

“In the pharmaceuticals sector, the cost of manufacturing a drug is relatively low, compared to the price it is sold at. By selling drugs at inflated prices, big companies and retailers pocket a large share of the money paid out by the consumer. Retail prices of drugs show complete arbitrary variation between brands. There are abnormally high trade margins with wasteful, unregulated and unethical drug promotion. There is a nexus between drug companies, stockists, retailers, Medical Representatives (MR) & some medical practitioners which disproportionately inflates the cost of medicines and the overall treatment,” Dr SS Sharma, IAS, pointed out in his feedback on the draft pharma policy some time back.

“If doctor has to treat a patient of blood cancer, he may advice the salt Imatinib by various brand names. If he has prescribed brand Glivec for a month's course it will cost Rs.114,400 to the patient. Whereas, the same anti cancer drug, but with a different brand name Veenat, tat will cost just Rs.11,400. And Cipla supplies the generic equivalent of this drug (@-imitib) at Rs.8,000 only, and Gelnmark supplies it for Rs.5,720! All these brands contain the same salt Imatinib, in the same quantity, conform to the same quality standards and are equally effective,” he explained.