While market based pricing can potentially reduce pricing for two-third essential medicines, there are several critical medicines that are not in the “essential medicines” list. Several Diabetes, TB, HIV, Cancer drugs are not under DPCO 2013 even though WTO lists them as essential
According to Drug Price Control Order (DPCO) 2013, the ceiling of prices is fixed based on the simple average of the prices of all brands of that drug that have a market share of at least 1%. The national list of essential medicines lists 348 bulk drugs, which are sold as 650 formulations. DPCO 2013 itself covers only 14 %-17% of the Rs75,000 crore pharma market, which means only a small subset of the market will be impacted. It is bizarre that many “essential” medicines are actually not in the current National List of Essential Medicines (NLEM) 2011. What constitutes “essential” and “unessential” drugs should not be much of a debate.
NGO All India Drug Action Network (AIDAN) has filed PIL (public interest litigation) in SC contending that market based pricing (MBP) is never used for any price regulatory purposes and under the new policy simple average ceiling prices are in many cases higher than the market leader price.
According to Dr Anant Phadke who is associated with AIDAN, “Very commonly used essential oral anti-diabetic medicines like glimeperide and glicazide are not classified as essentials; very commonly used anti-asthmatic medicines like salmeterol and montelukast too are not in essential medicines list.”
S Srinivasan, managing trustee, LOCOST (Low Cost Standard Therapeutics) has a strong case for several drugs that need to be considered as essential medicines. There are many essential medicines which are excluded from the current NLEM 2011 and they will continue to remain priced/ overpriced by letting the market decide.
Here are facts elucidated by Mr Srinivasan -
Multi-drug resistant tuberculosis (MDR-TB) - While the World Health Organisation (WHO) Essential Medicines List (EML) includes capreomycin, cycloserine, ethionamide, kanamycin and para-aminosalicylic acid for treatment of multi-drug resistant tuberculosis (MDR-TB), the NLEM 2011 does not mention any of these. Drugs for MDR-TB are highly expensive, and only a fraction of the patients with MDR-TB are under the government’s DOTS-Plus treatment.
Vaccines - While the WHO EML mentions 21 vaccines, the NLEM 2011 mentions only nine vaccines. It is another matter that most of these other vaccines are available in the market; they are costly, and prescribed by doctors who should have known better about their need and utility.
Diabetes - India has the largest number of diabetics in the world. Many important and widely used anti-diabetics are missing in the NLEM 2011 and therefore will be out of price regulation. The only anti-diabetics in the NLEM 2011 list apart from insulins are glibenclamide and metformin. Glime piride, the widely used alternative to glibenclamide, has a lower risk of hypoglycemia (low blood sugar levels) but has been excluded – even as it’s top-selling brand Amaryl 1 mg is priced at a 3,000% margin. Not a single medicine out of the seven-eight commonly used anti-diabetics belonging to four different chemical groups are included in the NLEM 2011 and hence would remain out of price control.
If insulins were excluded from calculations, 90% of the anti-diabetics market would be out of price regulation. Even among insulins, imported insulins have been allowed a higher price than those manufactured within India. But after the DPCO 2013 takes effect hopefully the same ceiling prices will be applicable to imported insulins also – as para 4 (2) of the DPCO 2013 says that the ceiling prices notiﬁed by the government will be applicable to scheduled imported formulations also.
HIV/AIDS, Cancer, Asthma, etc - Likewise many other commonly used critical care medicines for HIV/AIDS, cancers, mental health, chronic non-communicable diseases like asthma, rheumatoid arthritis, etc, which are costly and not in NLEM 2011, will be out of reach and be a glaring denial of the right to life.
In the fourth part of the article, we will look at examples of drugs wherein ironically the DPCO 2013 ceiling price is higher than the market leader MRP (maximum retail price). Can we see price increase for these medicines?
The Federal Reserve Bank of New York has asked a judge to throw out a lawsuit by a former bank examiner who says she was dismissed after finding fault with Goldman Sachs’ conflict-of-interest policies.
ProPublica reported the allegations last month by Carmen Segarra, who the New York Fed had assigned to examine aspects of Goldman Sachs in November 2011. She was fired seven months later.
In its motion to dismiss Segarra’s lawsuit, the Fed disputed that she is a whistleblower and characterized what transpired as “a non-actionable disagreement between a supervised employee and more senior colleagues over how to interpret a Federal Reserve policy.”
Segarra had been hired as part of an effort by the New York Federal Reserve to comply with new authority it received from Congress to monitor so-called Too-Big-to-Fail financial institutions. The Fed recruited experts to act as “risk specialists” to examine different aspects of these complex firms.
Segarra, who previously had worked in some of the nation’s largest banks, was tasked with examining legal and compliance functions at Goldman. Her supervisors told her specifically to look at whether Goldman was compliant with Fed guidance that the bank had a firm-wide conflict of interest policy, according to her Oct. 10 complaint.
At the time, Goldman had been buffeted by allegations in media reports and lawsuits over how it handled conflicts of interest. Segarra determined that Goldman did not have such a firm-wide policy. Although her fellow legal and compliance specialists working at the other banks agreed with her findings, however, the Fed’s senior official onsite at Goldman, Michael Silva, ultimately did not, according to her complaint.
Silva and his deputy, Michael Koh, tried to convince Segarra to change her findings, the lawsuit says. Three business days after sending an email to them explaining that the evidence she had gathered made it impossible for her to change her conclusions, Silva fired her. Before being escorted from the building, Silva told her he had lost confidence in her ability to follow directions and not to jump to conclusions, Segarra says.
Segarra’s suit in U.S. District Court names as defendants the New York Fed, Silva, Koh and her direct supervisor, Johnathan Kim. She alleged wrongful termination, breach of employment contract and that the defendants interfered with protected conduct she was exercising as a bank examiner.
Segarra’s lawsuit cites a federal law that allows bank examiners to sue for wrongful termination if they are fired for providing information regarding “any possible violation of any law or regulation, gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety.”
In its motion to dismiss, the New York Fed said that Segarra worked “at will” and so there could be no “breach of contract.” It also said that she was fired for cause and that the guidance she was told to use to examine Goldman was advisory and not a regulation, so the bank could therefore not be in violation. It further argued that since some of the information Segarra used to make her determination came from Goldman, she technically did not “provide” it to the Fed.
In its filing, the Fed cited a Code of Conduct policy and a 2011 Business Standards Committee Report as evidence that Goldman had a firm-wide policy governing conflicts of interest policy. Goldman, which is not a defendant in Segarra’s lawsuit, has said that it has such a policy.
“She rushed to judgments that even her own evidence refuted,” the New York Fed’s motion said.
The 2011 Business Standards Committee Report the Fed cited mentions plans to update and provide to all employees a conflict–of-interest policy but does not detail policies or procedures. As for it its code of conduct, Segarra told ProPublica that Goldman itself did not believe it constituted a conflict of interest policy since it did not provide it to regulators as such.
“My direct management and some of my peers did not think Goldman's Code of Conduct was a conflicts-of-interest policy,” she told ProPublica in an interview. “Policies in banks are actually pretty standardized documents, with clear titles and content directly related to the title/purpose of the document, written in a language meant to be understood by every employee at every level.”
Segarra’s attorney, Linda Stengel, disputed the Fed’s contention that her client is not a whistleblower. “Obviously, Carmen is a whistleblower, and obviously, her work as a bank examiner is protected conduct,” said Stengle. “Those conclusions are simple common sense to most everyone, except FRBNY, apparently.”
Segarra’s complaint asked for reinstatement, back pay, compensation for lost benefits and damages. The Fed’s motion rejected reinstatement or damages, contending that Segarra “misappropriated and published confidential supervisory information” as exhibits in her lawsuit.
All Indian Origin Chemists & Distributors has reported that secondary sales (sales from stockists to retailers) of drugs have come down to -1.7% year-on-year for October after a fall of 1.8% in September 2013.
All Indian Origin Chemists & Distributors Limited (AIOCD) has released domestic market data for the month of October 2013. The secondary sales (sales from stockists to retailers) growth for the India Pharma Market (IPM) has come down to -1.7% year-on-year for the month after recording a sales decline of 1.8% in September 2013.
According to a Quick Note from Nomura Equity Research on the pharmaceutical market in India, the slower sales growth is caused by disruptions in the marketplace as the new pricing policy is being implemented,. The impasse between the trade and the companies regarding margins for the drugs under NLEM (National list of essential medicines) is not yet fully resolved.
As expected, products under price control recorded a sharper decline of 17.9% year-on-year, whereas the rest of the market recorded modest growth of 0.9% year-on-year. In terms of company-specific growth, Glenmark, Sun Pharma and IPCA, with gross sales growth of 17.5%, 15.1% and 15.1% respectively, grew substantially ahead of the broader market, says Nomura.
In contrast, according to Nomura, Glaxo and Ranbaxy recorded growth of -35.5% and -14.5%, respectively. For the IPM, volume growth continues to be low at -6.3%.
Given the disruptions in the marketplace, Nomura expected significant divergence between primary sales (sales from company to stockists), secondary sales (sales from stockists to retailer) and end-market sales. Nomura expected primary sales to be lower than secondary sales. AIOCD reports sales drop of 1.8% for September 2013.
However, the primary sales growth reported by most Pharma companies in 2QFY14 (except for IPCA, Zydus Cadila) has been better than the secondary sales growth reported by AIOCD AWACS.
Nomura shows how the volume growth in the pharma market is weak in the following chart: