For affordable health

A recent report by the Competition Commission of India, titled ‘Making markets affordable for healthcare’, focuses on information asymmetry and cartelisation in the health and pharma markets. It focuses on the role of intermediaries in high drug prices, margins in branded generics and the lack of transparency in healthcare services. However, the report, while diagnosing certain pain points, seems to have to have glossed over others. The role of trade margins in ramping up prices has been rightly explained in detail, with the report pointing out the “enormous differences between market prices and the price points at which States such as Tamil Nadu and Rajasthan provide the same drugs procured directly from the manufacturers…” However, public procurement constitutes barely 10 per cent of the pharma sector’s annual turnover of over ₹2 lakh crore ($33 billion). The report does not look into why other States have not gone the Rajasthan and Tamil Nadu way. The absence of political will to commit the required resources, and the role of vested interests, is only too obvious. Its suggestion that e-pharmacies can be a solution is not convincing. Online purchase of medicines are hardly an option for a majority, precisely because of information asymmetry. While focussing on trade margins is all very well, the margins on manufacture too can be inordinately high, as with stents. The National Pharmaceuticals Pricing Authority capped their prices in February 2017, providing relief to cardiac patients. The same relief was extended in the case of aspirin. While manufacturers need to be permitted reasonable margins as an incentive, margins of 1,000 per cent are excessive.