Bulk purchase of drugs not price control

Bulk purchase of drugs not price control

It has been reported that the government proposes to bring medicines for heart and cancer care under price control. This could prove lethal, rather than beneficial. A better practice would be for the government to coordinate the demand for such drugs and obtain bulk purchase discounts from pharma companies. It has been observed that price-controlled drugs often disappear from the market. Or price controls could deter drug companies from bringing to India the products of cutting-edge research. Neither eventuality helps the patients.

Cancer drugs tend to be extremely expensive, at least at the level of the sticker price. However, it is observed that drug companies, loath as they are to formally bringing their prices down, often give repeat doses away for free, after the initial purchase at the sticker price. So, the effective price is, in most cases, lower than the touted price. In today’s world of globalised travel and transport, selling drugs at differential prices in different markets is fraught. What is sold at a lower price in India could find its way to a market where it is priced higher, without the knowledge of the drug manufacturer. There are better ways of making expensive drugs available to patients who desperately need them but cannot afford developed country prices. The solution is coordination and agglomeration of drug demand, to present the drug company with a very large, assured order that would allow the company to lower the price without any commercial loss.

Insurance companies and hospital chains, besides the health systems of the state governments and the central government, must be coordinated by a central agency to estimate their demand for particular kinds of drugs over the year, and a collective order placed on the drug manufacturer.