Govt may buy MNC drugs in bulk and sell cheap
The government is examining the possibility of barring multinational companies who hold monopoly over costly, patented drugs and medical devices from accessing Indian patients directly.
By Gireesh Chandra Prasad, ET Bureau |
NEW DELHI: The government is examining the possibility of barring multinational companies who hold monopoly over costly, patented drugs and medical devices from accessing Indian patients directly. Instead, the government may purchase the entire requirement of the country including that of private hospitals and use the collective purchasing power to negotiate a far lower price than what the companies may charge if allowed to directly sell to consumers.
The move may be the most effective way of making affordable the cutting-edge therapies of multinational companies which even affluent families find difficult to afford.
Direct selling to consumers through retailers or hospital pharmacies involves promotional expenses. Therefore, the proposal would be beneficial for the companies too as it would assure them of a massive contract besides lowering their promotional expense.
Big pharmaceutical corporations like GSK and Merck are aware of the need for affordable therapies and have started selling their sophisticated new medicines in the country at a fraction of the price at which they sell in developed countries like the US.
Merck, for example, sells its diabetes drug Januvia in India at roughly a fifth of its price in the US.
It is, however, unlikely that the government may venture into distribution of medicines to consumers, which may lead to leakages and inefficiency that characterises the country���s public distribution of food. Once procured at the central level for the requirement of the entire country, the drugs may be released to the respective users such as the railways, state governments, corporate hospitals and nursing homes.
Disallowing a company from directly reaching patients is not new to the country. The government had prevented Cipla from selling its version of Swiss drug maker Roche���s bird flu therapy in the retail market. The apprehension was that such sales may lead to panic consumption and lead to the virus developing immunity.
The move may be the most effective way of making affordable the cutting-edge therapies of multinational companies which even affluent families find difficult to afford.
Direct selling to consumers through retailers or hospital pharmacies involves promotional expenses. Therefore, the proposal would be beneficial for the companies too as it would assure them of a massive contract besides lowering their promotional expense.
Big pharmaceutical corporations like GSK and Merck are aware of the need for affordable therapies and have started selling their sophisticated new medicines in the country at a fraction of the price at which they sell in developed countries like the US.
Merck, for example, sells its diabetes drug Januvia in India at roughly a fifth of its price in the US.
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The government���s move is interesting as it would put to efficient use its clout as a major buyer of medicines instead of asking companies to lower prices using its sovereign powers.It is, however, unlikely that the government may venture into distribution of medicines to consumers, which may lead to leakages and inefficiency that characterises the country���s public distribution of food. Once procured at the central level for the requirement of the entire country, the drugs may be released to the respective users such as the railways, state governments, corporate hospitals and nursing homes.
Disallowing a company from directly reaching patients is not new to the country. The government had prevented Cipla from selling its version of Swiss drug maker Roche���s bird flu therapy in the retail market. The apprehension was that such sales may lead to panic consumption and lead to the virus developing immunity.
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