Access to Medicines in India
Workshop on IP & Access to Medicines at
Cochin University of Science & Technology
Sakthivel Selvaraj
Public Health Foundation of India
New Delhi
(shakti@phfi.org)
Key Barriers to
Access to Medicines
Unfair health financing mechanisms;
Unreliable supply systems;
Unaffordable pricing;
Irrational use of medicines;
Inadequate funding for research in
neglected diseases;
Stringent product patent regime.
Source of Health Spending
Source: National Health Accounts, 2004-05, GoI, 2009
Share of Households’ OOP Expenditure
by Quintile Groups, 2009-10
Sector
Poorest
2nd Poorest
Middle
2nd Richest
Richest
All
(As Percentage of Household Expenditure)
OOP Exp.
3.74
4.57
5.11
5.84
7.23
(As Percentage of OOP Expenditure)
5.73
26.41
30.69
32.25
34.35
33.81
(As Percentage of OOP Expenditure)
32.74
73.59
69.31
67.75
65.65
66.19
(As Percentage of OOP Expenditure)
67.26
75.42
72.34
68.28
Inpatient
Exp.
Outpatient
Exp.
Drug Exp.
Source: Unit Level Records of NSSO.
70.11
66.81
65.90
Percentage of Households Facing
Catastrophic Expenditure on Health, 2009-10
(>10% of HH Spend)
Quintile
Groups
Poorest
2nd Poorest
Middle
2nd Richest
Richest
All
OOP
Expenditure
Inpatient
Expenditure
Outpatient
Expenditure
Drug
Expenditure
7.656
1.082
6.329
4.523
9.875
1.980
7.394
6.012
12.237
2.770
8.848
7.392
16.197
4.496
10.979
9.591
22.456
7.954
16.207
14.852
13.684
3.656
9.951
8.474
Source: Unit Level Records of NSSO.
Impoverishment Due to OOP Payments in India
(In Millions)
Source: Selvaraj and Karan (2009)
Government Expenditure on Drugs (%)
States
2008-09 (Actuals)
2009-10 (RE)
2010-11 (BE)
Assam
5.7
5.6
5.0
Bihar
6.3
5.9
7.0
Gujarat
6.5
4.9
7.6
Haryana
8.6
6.8
5.5
Kerala
10.6
10.4
12.5
Maharashtra
9.6
5.2
5.2
Madhya Pradesh
Punjab
9.1
1.1
10.1
1.0
9.3
1.0
Rajasthan
3.0
1.9
1.5
Uttar Pradesh
6.9
4.8
5.3
Jharkhand
2.9
2.3
3.4
West Bengal
9.2
6.8
6.8
Andhra Pradesh
7.3
6.8
10.0
Karnataka
8.0
7.2
6.3
Tamil Nadu
Himachal Pradesh
11.2
4.5
9.3
2.3
12.2
1.9
J&K
6.5
5.2
4.3
State-wise Health Insurance Coverage in 2010
25%
National Covergae
5%
Private Health Insurance
Other States and UTs
12%
17%
West Bengal
15%
Uttrakhand
11%
Uttar Pradesh
62%
Tamil Nadu
3%
Rajasthan
12%
Punjab
6%
Orissa
12%
Maharashtra
2%
State
Madhya Pradesh
7%
Kerala
17%
Karnataka
Jharkhand
16%
20%
Himachal Pradesh
17%
Haryana
29%
Goa
17%
Gujarat
27%
Delhi
18%
Chattisgarh
15%
Bihar
3%
Assam
87%
Andhra Pradesh
0%
10%
20%
30%
40%
50%
60%
Percentage of population covered by Health Insurance
70%
80%
90%
100%
State-wise Availability of Free/Partly Free
Medicines at Government Facilities during 2004
Bihar
Jharkhand
Uttrakhand
Uttar Pradesh
Punjab
Haryana
Rajasthan
Chhatisgarh
Goa
West Bengal
Maharashtra
Madhya Pradesh
Odisha
Assam
Himachal Pradesh
Andhra Pradesh
Gujarat
J&K
Kerala
Karnataka
Delhi
Tamil Nadu
0
5
10
15
20
Percentage Availability of Free/Partly Free Drugs in Public Health Faciliites (Outpatient Care)
Source: Morbidity & Health Survey, NSS, 2004
25
A Comparative Scenario of
Drug Availability in TN and Bihar
Stock-Outs at Facilities: Bihar vs Tamil Nadu
(% Stock-Outs)
Drugs Stock Out (%)
100.0
Sakra
Manigachi
66.7
33.3
0.0
Bihar
Tamil_Nadu
Drugs Stock Out at Health Facilities (%)-Bihar Vs Tamil Nadu
Trends in All-Commodity and
Pharmaceutical Price Index
Drug Price Control
DPCO-1979
DPCO-1987
DPCO-1995
1. No. of drugs
under DPCO
347
142
76
2. No. of Drug
categories
4
2
1
Items
DPCO
under
3. MAPE % allowed on normative/national ex-factory costs to meet postmanufacturing expenses and to provide for margin to the manufacturers
3.1. Category I
40 %
75 %
100 %
3.2. Category II
55 %
100 %
N.A.
3.3. Category III
100 %
N.A.
N.A.
3.4. Category IV
60 %
N.A.
N.A.
4. % Covered
under DPCO
90 %
70 %
20-25 %
Distribution Network & Mark-Up
in Indian Pharma Market
Source: IMS-ORG, 2004
Unaffordable Drug Price - Retail & Procurement Price
National Pharmaceutical
Pricing Policy, 2012
Key Features:
•
•
•
•
•
•
•
All 348 NLEM ;
Market Based Pricing;
Only Formulations;
WPI-linked increase;
Only single ingredient medicines;
Only NLEM dosages & strengths;
Patented Medicines not covered.
Market Leaders are Price Leaders
Market Leaders are Price Leaders
Market Share for FDCs Involving Essential Medicines
Market Share of Drugs Involving Dosages of EML vis-à-vis Non EML dosages
Continuing Trend of Profiteering in India’s
Pharmaceutical Sector
Implications of NPPP, 2012
Pharma market is unique because:
• Market Leader is the Price Leader - When competition exists,
leading market players are expected to reduce prices
substantially & yet obtain normal profits.
• Indian pharma industry behaves abnormally.
• Under a therapeutic category, hundreds of players slug it out in
the Indian pharmaceutical sector, but with substantial variation
in prices.
• The prices of leading players very often tend to be the highest,
because of aggressive promotional campaigns.
• High margins provided by industry to stockiest & retailers
encourage them to promote high priced medicines;
• Given information asymmetry that creates supplier-induced
demand, pharma makers have an upper hand in pushing
through medicines that are high priced.
Implications of NPPP, 2012
• MBP legitimizes trend of high prices;
• Likely to induce players in lower priced segment to
drive up prices to closer to highest priced medicines;
• Exempts essential medicines - weighted average price
of less than or equal to Rs. 3 - would increase in prices
of essential medicines (including anti-histaminics, antiasthmatics, some anti-diabetics, anti-hypertensive etc.).
• Prices of APIs which are only manufactured by a limited
no. of suppliers in India or internationally should be
monitored to ensure that a cartel does not emerge that
would drive prices up.
• WPI-linked price rise;
• Price controls & profitability;
• Negotiation on patented medicine prices;
• Unethical to use proprietary data for public policy;
Irrational Medicine Use in India
Product
Rank
1
2
Product
Sales (in
Crore Rs.)
135.88
124.31
Market
Share
0.497
0.455
Product Description
95.85
92.48
0.351
0.338
Useless liver drug
Irrational vitamin
combination
Blood tonic
Irrational analgesic
combination
Needless antacid
Irrational vitamin
combination
Needless antacid
Oral ginseng tonic
5
7
COREX
PHENSEDYL
COUGH
LIV-52
BECOSULES
17
18
DEXORANGE
COMBIFLAM
77.04
76.03
0.282
0.278
27
35
DIGENE
POLYBION
63.49
54.24
0.232
0.198
38
40
GELUSIL-MPS
REVITAL
53.25
53.09
0.195
0.194
Source: IMS-ORG, 2006
Irrational cough mixture
Irrational cough mixture
Irrational Prescription in
Public Health Facilities
Bihar (%)
Tamil Nadu (%)
Average number of drugs per encounter
2.6
3.1
Percentage of drugs prescribed by
generic name
Percentage of drugs prescribed from
essential drug list
73.5
88.0
66.8
88.0
Percentage of encounters with an
antibiotic prescribed
Percentage of encounters with an
injection prescribed
Percentage of fixed dose combinations
versus single agents
66.0
59.6
4.9
1.4
6.9
0.0
Percentage of encounters with a
syrup prescribed
26.2
2.6
HLEG Recommendations
• Scale Up Public Spending on Drugs (0.4% GDP):
– Expected to reduce OOP;
• Strengthen Public Procurement System:
– Supply quality generic drugs and enforce rational use;
– Centralised Procurement & Decentralised Distribution
System;
– Warehouses at every district level;
– Retail outlets can be set up (or contracted-in) atleast
one at every block level and 4-5 at district
headquarters.
– Drug supply to such stores linked to centralized
procurement at state level, so that drugs are of equal
quality & costs are minimized by removing
intermediaries.
Key Characteristics of an Efficient & Reliable
Procurement & Distribution System
– Atleast 15% of public funds;
– Procure EDL medicines (National and state level
EDL at three levels; periodic revisions);
– Traditional medicines list;
– Prescription and Dispensing through STGs;
– A two-bid open transparent tendering process;
– A 2 passbook system;
– Warehouses at every district level;
– An Empanelled laboratories for drug quality
testing;
– Enactment of Transparency in Tender Act;
– Prompt Payments;
– Prescription audits & social audits;
Drugs and Vaccine Security
• Revive Drug PSUs by infusing capital with
autonomous status;
• PSUs will offer opportunity to produce volume
drugs & help in 'benchmarking' drug costs;
• Revisit FDI rules to bring down share of foreign
players to less than 49%.
• Co-opt medium & small scale drug industry to
produce quality generic medicines for UHS by
helping them to transit to GMP-complaint status.
• Revive old vaccine mfg. units with additional
infusion of capital and new vaccine park with
autonomous status.
Drug Price Caps
• A pervasive price control on all essential
drugs is called for;
• Price decontrolled drugs to be monitored
continuously;
• State and Central Cell for price control of
drugs;
• Price of all new patented drugs to be
brought under DPCO automatically;
• Weed out irrational drugs: hazardous,
irrational, non-essential drugs from mkt;
Drug Quality Control
• Strengthen Central and State Drug Control Dept.,
for effective quality control with adequate human
resource, technology & institutions;
• Regular/periodic monitoring/study of drug
production and distribution for quality –
blacklisting offenders;
• Build a network of drug quality testing
laboratories, to be accredited by NABL in each
state with periodic renewal;
Product Patents
• Restrict patenting of insignificant or minor
improvements of known medicines (under
section 3[d]);
• Make use of CL provision under TRIPS;
• Data exclusivity clause proposed by EU as
part of Indo-EU trade pact needs to be
removed to avoid ‘ever-greening’;
• Invest in neglected disease R&D by opensource drug development model.
Expected Outcomes
Expected Outcomes:
– Reduction in OOP (reverse ratio – OOP:Govt);
– Cost Savings;
– Rationality of care ensured;
– Quality Generics prescribed & dispensed;
– Acute shortages & chronic stock-outs eliminated.
Time-Frame:
- 1 year (Public Procurement & Public Distribution);
- 3-5 years (Public Procurement & Private Distribution.
Scaling Up To Achieve Universal Access to Medicines