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Right of Reply: Price restrictions on drugs: Unfounded fears, says Health Ministry
View(s):The following are the relevant extracts from a Health Ministry statement issued late Friday night reacting to the Editorial in the Sunday Times last week titled “The quick-fix drug price formula is no cure”.
As a responsible national newspaper we are perturbed by the degree of misreporting and misinterpretation of facts in your Editorial of 06 November 2016 pertaining to the price restrictions placed on some commonly used drugs by the National Medicines Regulatory Authority (NMRA) of the Ministry of Health, Nutrition and Indigenous Medicine.
Your editorial alleges that the list of drugs selected for price control is not ‘comprehensive’ and an exercise based on a ‘simplistic arithmetical formula’. The forty eight drugs were carefully selected based on the principle of essentiality which forms the basis of (the) Senaka Bibile principles on pharmaceuticals using the 2013/14 Essential Medicines List of the Ministry of Health. In addition a number of other important issues were taken into consideration including drugs used for a wide range of common medical conditions affecting the general public such as diabetes, high blood pressure, heart disease, various infections, asthma, epilepsy, psychiatric disorders and muscular-skeletal disorders.
We feel that your fears of some multinational companies withdrawing from the market due to the price interventionism (is) unfounded. One of the biggest multinational operating in the country, GSK (Glaxo), the manufacturer of a wide range of pharmaceuticals including a brand of paracetamol (Panadol) has agreed to bring down the price of this product from the current Rs. 3.00 to Rs. 1.30 per tablet with immediate effect.
Regarding your concern of “innovator” drugs pulling out of the Sri Lankan market due to the imposed price fixation, it should be noted that such drugs have been protected by patent rights for a long period of time allowing them to recover the cost of R&D that has gone into developing such products. None of the products brought under this pricing regulation are currently under patent protection, and hence do not need additional cost benefit over and above the stipulated ceiling prices. Please also note, no country depends solely on “innovator” products of medicines. The 2015 WHO Guideline on Pharmaceutical Pricing Policies promote the use of generic medicines as an effective method of managing drug prices. The Ministry regulation on pharmaceutical pricing does that by making quality generics more affordable to the public.
Regarding allowing ‘market forces’ to play their role instead of implementing price controls, we wish to point out that this is not possible due to leverage exerted through brand-name prescriptions and preferred brands being ‘pushed’ at pharmacists, influencing the freedom of customer choice or decision making.
The Sunday Times editorial goes on to claim that the present MRP based price fixation will create illegal parallel imports to the country. lt should be noted that even today this is happening due to massive price differences between India and Sri Lanka. For example an ‘innovator brand’ of Rosuvastatin 10 mg is SLRs 28.00 in India and SLRs 150.00 in Sri Lanka. This massive difference in price for the same branded product has resulted in ‘suitcase imports’ from India. When local prices are reduced this practice is likely to become unattractive to unscrupulous elements. To safeguard the quality and safety of drugs marketed locally, the NMRA and Ministry of Health are determined to end such illegal practices in the future.
The reported jettisoning of the CIF + 85% formula was done for very good reasons as CIF prices are known to be manipulated by importers through various mechanisms such as over invoicing, rebates and discounts in the supply chain. The NMRA has been pressing for a “verifiable” CIF from pharmaceutical importers for a long time. The pharmaceutical chamber, which was silent on this issue all this while has at last indicated their willingness to look into this unethical practice resorted to by its members and work with the NMRA in the future.
The statement that private sector has not been consulted before implementation of price control and has taken suppliers by surprise is incorrect. The pricing formula was presented and discussed with the Chamber of Pharmaceutical Industry (SLCPI) initially in September 2016, and subsequently on numerous occasions with NMRA officials. The Minister of Health discussed the proposed pricing model in great detail with SLCPI officials (including its President, Vice President and Secretary) on two occasions. Further, the Minister has been on record on the special gazette notification on pharmaceutical pricing months in advance, both through public announcements and statements in Parliament.