Last Tuesday, the in our editorial quoted Senaka Bibile policy experts as saying that the Health Minister’s announcement on September 23 giving maximum retail prices of 47 drugs was largely irrational and not scientific. They said Minister Rajitha Senaratne’s annoncment appeared to be more of a political gimmick and was not likely to help in achieving Prof. Senaka Bibile’s goal of providing quality drugs to the people at affordable prices.
The experts pointed out that the Minster and the National Medicines Regulatory Authority’s (NMRA) new chairman Asita de Silva had said the basis of their price formulation was that the brands of a particular drug with a market share of more than 2% were selected and median price of these were taken as the maximum retail price (MRP) of that particular drug.
Importers of brands with prices above the MRP would have to reduce their prices or move the brands out of the market. Brands with prices below the MRP would continue to have present prices and there would not be a reduction.
In his speech, the Minister blamed the NMRA’s previous chairman and the Chief Executive Officer for not acting speedily and praised Prof. Asita for bringing down the prices of drugs within two months of his appointment as Chairman. However, the experts say the non-scientific nature of the pricing structure shows that Prof. Asita has not considered the prescribing patterns, availability of drugs, profits gained by importers and distributors of drugs and pharmacies.
In our editorial we urge President Maithripala Sirisena -- who is known to be committed to the Bibile policy -- to order that the formula be reviewed and the price structure formulated on the basis of Prof. Bibile’s vision.
Some years ago, health rights groups headed by Dr. K. Balasubramanaiam -- a pharmacology expert who for a long period was Prof. Bibile’s main disciple -- submitted a patient-friendly and scientific way to formulate prices. Drug pricing was deregulated by the UNF government between 2002 and 2004. A price regulation method that will give the benefit of the duty waiver to the patients is urgently required. The groups called for the appointment of a committee representing all stakeholders including patients to formulate a transparent patient-friendly pricing policy for the entire range of registered drugs.
The heath rights groups urge that retail prices of drugs be determined by using a fixed formula. These formulas are need to be based on the CIF value or the ex-factory price. But there is no control over the CIF value or the ex-factory price. Therefore different brands of the same drug are available at widely differing prices. Hence the pricing policy should have the incentives in itself for those who deal in less costly brands or generics. One way of doing this would be to make the profit margin as a percentage inversely proportional to the CIF value or ex-factory price of the drug.
To do this drugs may be categorized into several brands depending on their CIF value or ex-factory price. Then the profit margin as a percentage can be determined for each such brand.
The health rights groups say that some drugs imported from different sources under different brand names are being sold at different prices. Therefore prices of such brands may be controlled through selective registration. This will also helps to restrict the number of brands. If there are several suppliers who have satisfied the registration criteria and import good quality drugs, they could be told to quote the price. Then the lowest priced ‘X’ number of products will be allowed into the market. All drugs available for use are subject to mandatory registration according to regulations which cover efficacy, safety and quality aspects only in the registration process. But assessment of the need and cost benefit to the patient are ignored. The NMRA needs to do this on all drugs registered applying the factors of efficacy, quality safety, the cost and need. For testing purposes a high technology quality assurance laboratory needs to be in operation and this may take time. But it is a better way than rushing into ad hoc decisions to please individuals instead of restoring a patient-friendly health service.