This is my last blog in the series discussing affordability of medicine in India. In my past blogs, we have tried to understand the problem, the nomenclature that confounds this issue, and elements of a solution space that will give us a roadmap to our goal of affordable generic medicines. I have tried to focus the discussion on data, rather than on emotive issues and opinions. But honestly, I have never actually addressed the core issue; is it possible for us to have affordable medicines in this country? I will try and address this issue now and I believe this is the most important topic in this entire discussion.
What we have heard on the television debates and in newspaper reports is a lot misdirection. We have several stakeholders whose opinion often contradicts one-another. We heard that any attempt to regulate the industry more than it is now is a death-knell for this emerging sector of our economy, so much so that the industry lobby linked their ability to command a price to their desire to set up new manufacturing facilities overseas (presumably to supply the domestic market). We heard from the regulator, CDSCO in the past that global quality standards cannot be applied to Indian industry serving the domestic market because it is too expensive for the industry to comply. It will put the domestic pharma industry out of business. The rationale of our regulator therefore is that our countrymen should learn to accept second-rate systems and live with it. Tough!
I have two data points for you to consider.
The Indian Pharmaceutical Industry is second only to the IT industry in terms of its ability to earn foreign exchange by selling its product in overseas regulated markets. Here are some reports that present how much our industry earns from foreign markets. Report 1, Report 2, Report 3 & Report 4. Not just revenue, the industry’s profits from these markets are very healthy. Here are a few reports on the industry’s financials: Report 6, Report 7 & Report 8. All of these reports confirm that our industry does extremely well selling into these regulated markets. These markets are profitable and profits from the regulated markets makeup for a significant part of their bottom line.
Now lets see the pricing data that allows our industry to generate these healthy profits from the overseas regulated markets. Dr David Belk has compiled a list of what an average pharmacy in the US pays for generic medicines. His research is available here: The True Cost of Healthcare. For ease of reading, he has categorized generic drug names alphabetically and for each formulation; his tables tell us what an average pharmacy paid for each drug/formulation in 2016. Let us look at a few examples of medicines commonly prescribed in our country for chronic treatments (cardiovascular and metabolic diseases):
|Cost Per Tablet in the US|
|Atorvastatin 10 mg||$0.11||7.15 ₹|
|Atorvastatin 20 mg||$0.13||8.45 ₹|
|Atorvastatin 50 mg||$0.15||9.75 ₹|
|Atorvastatin 80 mg||$0.17||11.05 ₹|
|Simvastatin 10 mg||$0.03||1.95 ₹|
|Simvastatin 20 mg||$0.03||1.95 ₹|
|Simvastatin 50 mg||$0.04||2.60 ₹|
|Simvastatin 5 mg||$0.04||2.60 ₹|
|Carvedilol 12.5 mg||$0.03||1.95 ₹|
|Carvedilol 25 mg||$0.03||1.95 ₹|
|Carvedilol 3.125 mg||$0.03||1.95 ₹|
|Carvedilol 6.25 mg||$0.03||1.95 ₹|
|Glimepiride 1 mg||$0.07||4.55 ₹|
|Glimepiride 2 mg||$0.10||6.50 ₹|
|Metformin HCL 1000 mg||$0.03||1.95 ₹|
|Metformin HCL 500 mg||$0.02||1.30 ₹|
|Metformin HCL 850 mg||$0.03||1.95 ₹|
|Metformin HCL ER 500 mg||$0.04||2.60 ₹|
|Metformin HCL ER 750 mg||$0.09||5.85 ₹|
|1 USD =||65||INR|
These are just a few examples, the entire list is available on the link above.
Clearly, these prices (converted into Indian Rupees) look affordable to me. Mind you, the industry is still able to generate healthy profits from selling their products at these negotiated prices in the world’s most regulated market (the USA). To comply with the US Standards for cGMP, manufacturing facilities used by our own industry put what they use to make drugs for domestic consumption to shame. They conduct bioequivalence studies to demonstrate therapeutic efficacy, conduct long term stability studies to support expiry dates (which is still not mandatory in India, we just assume the drug is good until the date printed) and submit annual reports both for safety and batch release to the US FDA on schedule. And this is not the whole list. All of these things do take time, effort and money. Despite complying with these standards, our own industry, which accounts for more than 50% of the US drug supply makes a healthy profit selling their product at these negotiated prices.
My question is simple. If our industry can do this for the US market, what is stopping it for replicating this model at home? Why are we told that we have to live with a lower standard, consume substandard medicines and if we dare question the industry’s practices, then all hell breaks loose? What I find absolutely amazing is that the regulator, whose job is to protect public health becomes a vocal proponent of the industry’s arguments.
Our pharmaceutical industry made investments to comply with US standards and is generating healthy profits for their shareholders by selling into that market. Do they do half of that for a license to sell domestically in India? I think we all know the answer to this question. Why is that?
Keep in mind that these negotiated costs include costs to ship the product made in India to the US. Furthermore, it doesn’t address the fact that our patient pool in India is three times as large as the US. Doesn’t that scale warrant additional efficiencies?
Why then, are we told both by the industry and the regulator to suck it up and stop complaining? That if we ask for compliance with global standards, we will kill this industry? What are we missing here?
If there is one lesson from the discussion over the last two weeks about the issue of affordability, it is that we need to remove the issue of “quality” as a variable from the equation. Look at the same issue being debated in the US, do they even bring the issue of “quality” up? It is a testament to their regulator and their administration that the discussion is focussed on price, and just price.
This was the reason I approached the Supreme Court of India in March 2016 with a set of Public Interest Litigations based on two years of grueling RTI work. I was disappointed that the Chief Justice then questioned my standing, because I am a US Citizen of Indian origin to bring such a case in an Indian court. The judge said my arguments were academic, and that the court had more important issues to adjudicate. Now that this issue has been brought into the public awareness by none less than the Prime Minister of India, perhaps there will be a more successful effort in us achieving his vision of providing affordable medicines to the citizens of this country.