IN THE IE October issue Physician-Scientist Dr Swami Subramaniam refers to the substantial savings in cost that can be effected by switching to generics from branded drugs. Pharma companies led by US multinationals have been pointing to the huge costs involved in discovering new drugs and formulations. The process involved was also lengthy involving long months of work at the laboratories, testing on animals and later on humans in stages, passage through the regulators and in marketing. Pharma companies have been loading all these costs price on the consumer. With increasing affluence and ageing, there has been acceptance of the high prices. In the American model a flourishing insurance sector takes its share.
In the European model, with a socialist bias the public healthcare system has been able to buy the drugs in bulk at well-negotiated prices. Mostly provided by the state (as in Britain’s National Health Service), the burden on the patient is much less than that in the US. However, this is also supported by a high rate of taxation. In countries like Sweden, for instance, tax rates have been pretty high. But then the state takes better care of expenses on health, education and other social services.
India which has the reputation as the pharmacy of the world, built its success largely on its ability to reverse-engineer patented drugs and on its ability to produce generics in large volumes. The country has been able to produce drugs at a fraction of the cost of the branded pharma products of the west.
Sadly however, information on the generic equivalents of popular branded drugs is not widely known.
Several state governments, notably Tamil Nadu, have been able to streamline drug procurement and distribution. Brilliant civil servants like Dr J Radhakrishnan of the state have been able to effect substantial economies in procuring drugs and medical devices in bulk and effectively distribute these through the well-oiled healthcare system. These were best seen in the Covid-19 pandemic months.
An interesting and welcome development is the intense competition among e-commerce giants in marketing pharma products. Hardly a year ago were hospitals and drug distributors and dealers breezily charging the maximum retail price (MRP). This included star hospitals like Apollo, MIOT and Fortis which routinely billed ‘captive’ patients at MRP. Remember patients had little say on such collections made at the knife point. Even the chain pharma stores of Apollo Hospital Enterprises were routinely charging at MRP.
You could easily imagine the ability of such large businesses to buy in bulk with discounts that could even be over 40-50 per cent on MRP. These also related to a large number of simple medical devices like oxymeters, blood analysers… These were mostly Chinese products. At the height of the oxygen shortage in May this year oxygen concentrators, cylinders… were sold at astronomical prices.
Pharma dealers opposed opening drug trade to e-commerce. Look at the sea change brought about by their entry: Netmeds, PharmEasy, Tata 1mg have been offering products with discounts of 20 to 25 per cent on MRP. They deliver the medicines with remarkable efficiency! These also spend humongous amounts on advertising!
There is also a welcome expansion of diagnostic services. A number of hospitals and private laboratories vie with one another offering a range of tests at handsome discounts.
The Centre and states have set new standards in healthcare in handling the Covid-19 pandemic. These efforts should be continued in revving up the public health care system continuously and ensure affordable health care for all.
The next stage should be to popularise generics which would benefit consumers much, much more. But this may not be of great interest either to hospitals, private practitioners, or to marketing companies due to their low prices and low margins.
