In a strongly-worded letter to Prime Minister Narendra Modi, the economic wing of the Sangh parivar, the Swadeshi Jagaran Manch, has accused several government departments of interfering in drug pricing. This follows the prime minister’s recent statements where he said the government plans on introducing a law so that doctors prescribe generic drugs, thus making healthcare more affordable.
In the letter dated May 1 to which The Wire has access, the organisation has claimed that pharmaceutical companies that are marketing the most essential medicines are “making profits in the range of 500%-4,000%” because the existing formula for ceiling prices is “market-based” and “against the interests of the people”.
Swadeshi Jagran Manch's letter to PM: Calling out Niti Aayog, Min of Health, Pharma Dep & DIPP for messing with drug pricing. Strong letter! pic.twitter.com/KJ9hspAIHW
— Anoo Bhuyan (@AnooBhu) May 2, 2017
Swadeshi Jagaran Manch has further alleged that government arms – the health ministry, department of pharmaceuticals (DoP), department of industrial policy and promotion, and the Niti Aayog – are attempting to “completely dismantle the system of price control.”
“So powerful has the hold of the pharmaceutical companies been that the secretaries and joint secretaries of three ministries, namely health and family welfare, commerce and industry through DIPP [Department of Industrial Policy and Promotion] and chemicals and fertilisers through DoP, are now holding meetings along with the NITI Aayog to completely dismantle the system of price control. Of course, some kind of presence, under the guise of pro-poor policies, will be made that they are going to introduce a better system,” says the letter.
The organisation appreciated the work of the National Pharmaceutical Pricing Authority (NPPA) for capping the prices of cardiac stents in 2016 and capping the prices of diabetes and cardiovascular drugs in 2014. Their letter says that government ministries, particularly the DoP, did not favour the attempts of the regulatory agency to “counter prevalent uncompetitive market conditions,” and that “plans are afoot to sabotage the NPPA.”
The Swadeshi Jagaran Manch further alleged that the actual purpose behind the formation of the ‘Committee for Ensuring Enhanced Accessibility of Drugs to the Poor’ was to “pander to pharmaceutical companies” and negate NPPA’s attempts to do make medicines affordable. The letter says:
“It is now known that ironically a ‘Committee for Ensuring Enhanced Accessibility of Drugs to the Poor’ has been formed on March 31, 2017 and chaired by the Joint Secretary (Pharma Policy), DoP. Its real purpose is to pander to the pharmaceutical companies and undermine the good work done by the NPPA, and ultimately to abort any attempt to do effective price control and make medicines affordable in India
It has also come to our notice that NITI Aayog has contacted representatives of various ministries with the intention of framing a new drug police and revamping the DPCO [Drug Price Control Order] 2013. It is our understanding that this issue is sub-judice before the Supreme Court (W.P. (Civil) 423 of 2003) wherein the final hearing is underway. While the Supreme Court is already seized of the matter and the price fixation methodology, it is not appropriate for the government to make further modifications in the drug policy and DPCO 2013 to suit the ends of the pharmaceutical industry.”
Commenting on Niti Aayog’s “ill-intentioned” recommendation in its ‘Three Year Action Agenda’ that the Drug Price Control Orders 2013 be delinked from the National List of Essential Medicines, the organisation stated that doing so would increase the price of essential medicines, saying that the act is “revealing of the Niti Aayog’s apathy towards the welfare of the poor people of the county.”
Labelling the actions of the government arms as being “against national interests and fundamentally anti-poor,” Swadeshi Jagaran Manch has appealed to Modi to intervene to ensure affordable access to medicines.
Read the letter in full below:
Shri. Narendra Modi
Hon’ble Prime Minister of India
South Block, Raisina Hill
New Delhi – 110011
29 April 2017
Dear Modi ji,
Subject: Essential medicines selling at exorbitant profits
Dept. of Pharmaceuticals colluding with pharma companies
Niti Ayog preparing to sabotage the drug price control regime
It was heart warming to hear statements made by you to the effect that it is your desire that the poor of India get essential medicines at reasonabe and affordable prices. Unfortunately, your departments are acting against what you have promised the people of India.
We are deeply concerned that prices of most essential medicines are too high for the majority of the people and contribute towards the impoverishment of millions each year. The pharmaceutical companies marketing these medicines are making profits in the range of 500% – 4000% and that too after imposing price controls. This is because the current formula for arriving at a ceiling price is an irrational market-based formula that legitimises profiteering and which is against the interests of the people.
Until very recently, i.e., till May 2013, when the Drug Prices Control Order (DPCO) of 1995 was in force, the drug price regulation ceiling prices were calculated as the cost of production, then doubled for certain marketing expenses and profit. This was a rational formula which gave the pharmaceutical companies a reasonable profit.
Unfortunately the pharmaceutical companies could influence the Department of Pharmaceuticals (DOP), which changed the ceiling price formula as a result of which the pharmaceutical companies were able to make super profits. So powerful has the hold of the pharmaceutical companies been that the Secretaries and Joint Secretaries of three ministries namely Health & Family Welfare, Commerce & Industry through DIPP, and Chemicals and Fertilisers through DOP, are now holding meetings along with the NITI Aayog to completely dismantle the system of price control. Of course, some kind of pretence, under the guise of pro-poor policies, will be made that they are going to introduce a better system.
The National Pharmaceutical Pricing Authority (NPPA) which was authorised by the Central Government to pass orders under the Essential Commodities Act read with the DPCO 2013, to control the retail prices of essential medicines, has been doing a rather remarkable job. The NPPA has recently done a commendable job through your support of bringing coronary stents under price control and capping huge trade margins to bring much needed relief to cardiac patients.
Previously in 2014, the NPPA, in another commendable initiative, had capped the prices of several medicines for cardiovascular disease and diabetes, using special powers vested with the Government to act in the public interest under the DPCO 2013, and thereby acting to counter prevalent uncompetitive market conditions and benefit the public. These activities have not been liked by the above mentioned ministries and secretaries, particularly the DOP, and plans are afoot to sabotage the NPPA, possibly by dismantling it altogether.
It is now known that, ironically, a “Committee for Ensuring Enhanced Accessibility of Drugs to the Poor” has been formed on 31 March 2017 and chaired by the Joint Secretary (Pharma Policy), DOP. Its real purpose is to pander to the pharmaceutical companies, undermine the good work done by the NPPA and ultimately to abort any attempt to do effective price control and make medicines affordable in India.
It has also come to our notice that the NITI Aayog has contacted representatives of various ministries with the intention of framing a new drug policy and revamping the DPCO 2013. It is our understanding that this issue is sub-judice before the Supreme Court (W.P. (Civil) 423 of 2003) whereinthe final hearing is underway. While the Supreme Court is already seized of the matter and the price fixation methodology, it is not appropriate for the Government to make further modifications in the drug policy and DPCO 2013 to suit the ends of the pharmaceutical industry. It is to our utter shock that such hurried attempts are being made to ease out the price control, which is only to the tune of 11-12% of the market, in the interest of the pharmaceutical industry, and to the detriment of the poor of this country.
We note that the NITI Aayog has a history of aligning with the vested interests in the relevant ministries to dismantle the regime of price control and wind up the NPPA. In continuation of the NITI Aayog’s attempts to deregulate the pharmaceutical market, it has made the following recommendation in the Three Year Action Agenda, 2017-18/2019-20, 23 April 2017:
“21.27 A balanced approach towards regulation is needed for achievning the twin objectives of access to effective medicines and a strong pharmaceutical industry. There is a trade-off between lower prices on the one hand and quality medicine and discovery of breakthrough drugs on the other. It is therefore recommended that the Drug Price Control Order may be delinked from the National List of Essential Medicines.” (pg. 144)
We strongly protest this ill-intentioned recommendation which will increase the prices of essential medicines to further unaffordable levels and is revealing of the NITI Aaayog’s apathy towards the welfare of the poor people of the country. We are also appalled at the misleading statements that make a false link between price regulation and poor quality of medicines, lesser innovation and deteriotion of the industry.
All these actions are against the national interests and are fundamentally anti-poor. It is shocking to see senior officials of these three ministries and the NITI Aayog acting in such a concerted fashion to lobby for the crass commercial interests of the pharmaceutical sector.
We request you to kindly intervene to thwart the moves afoot to undermine the declared intentions of the Government to ensure affordable access to medicines for all in India. We also suggest that the NPPA be strengthened and made an autonomous body rather than left as a subordinate agency of the DOP.
Dr. Ashwani Mahajan
Swadeshi Jagaran Manch
ShriNripendraMisra, Principal Secretary
ShriPradeep Kumar Sinha, Cabinet Secretary