Leisure, Lifestyle & Wellness
Pricing of essential medicines and discounts
Many drug stores, upon request, give 5% discount so as to retain the client, but mostly they do not give this reduction voluntarily
 
National Pharmaceutical Pricing Authority, a Ministry of Chemicals & Fertilisers sponsored organisation, was formed on 29 August 1997.  It has been given powers to implement and enforce the Drugs Price Control Order (DPCO) 1995/2013.
 
A visit to their web site is of interest.  It shows that NPPA advises the Government on matters of drug policies and prices. NPPA is "constantly endeavouring for abundant availability of affordable medicines for all".  The margins allowed for a wholesaler and a retailer, officially, varies between 10% and 20%.  Branded medications, for the same "disease" could be high and not controlled.  These margins are for "decontrolled" formulations.
 
According to the available information, prices are capped at an average of all medicines in a segment having more than one percent market share; for all other drugs, companies (drug manufacturers) are FREE to decide the pricing!
 
It may be recalled that on 10th July NPPA issued a notification capping prices of 108 anti-diabetic and cardiovascular drugs, on the basis of guidelines issued in May, after finding the market prices of some brands varied widely.
 
The government, in a rather sudden move, last month withdrew the power of the drug regulator, NPPA, to cap prices of non-essential drugs.  Perhaps, this was done to appease the US drug makers who have been taking up the issue of intellectual property rights (for sometime) and this matter has been a source of bitterness or has acted as a stumbling block in our trade relations with that country. It is not clear if this matter was raised at all during the recent visit of Prime Minister Narendra Modi.
 
But, in the meantime, the Indian Pharmaceutical Alliance (IPA) and the Organisation of Pharmaceutical Producers of India (OPPI) went to the court against the NPPA's move, in July.
 
According to the press reports, OPPI has moved the court challenging the notification and seeking an order preventing the government from taking any further steps in this matter.
 
As a sequel, the Delhi High Court has asked the NPPA to show the manner in which it is exercising its power to cap prices of non-scheduled drugs, "in view of the recent withdrawal of the guidelines issued for this purpose". And the High Court has directed NPPA to file an affidavit indicating framework within which prices of non-scheduled drugs are now sought to sustain in the absence of guidelines". 
 
It will be therefore in the interest of the public to await the final outcome on this issue, in the next few months.  In the meantime, there are related issues that could be discussed and debated.  Until this matter is resolved, it is presumed, status quo will continue on prices?
 
There are other issues that can be thought about, in the meanwhile.
 
First is the issue of "essential drugs".  As long as a medical practitioner diagnose a sick person and prescribes some medication for use by the patient, should we not consider that becomes "essential" for the welfare of the sick person? With the prescribed medicine, the "sick" may return to health! So, for him/her, the "medicine" prescribed is "essential"!
 
One can understand the difference between a "lifesaving drug" and a simple headache!
 
Second, most corporate bodies today have extended medical facilities to the staff, and in many cases, medical cover includes the whole family. Either the company concerned from their own pharmacy gives the medicines free or the same made available at a "staff" rate.  However, sadly, this benefit comes to a dead stop, once the person "retires" from active service.  It is possible that some well to do organisations, which truly care for their staff welfare, as a Corporate Social Responsibility, extend this till the end, and more often than not, offer employment to the son/daughter in the organisation.
 
The trouble is such organisations are few and far between.  A "retired" person becomes a family liability, not bearing to think that he/she was the bread earner, until the last day in office.  It is a pity we do not have old people's home with all facilities like many other countries.
 
The third refers to a whole lot of people, like our farmers, the backbone of India's agricultural might, who have nothing to bank upon, as they grow older! They go to village quacks to get medication if there are no dispensaries available. 
 
Fourth refers to the need of the Government Directive and the related licensing authorities (who issue shop licenses) that all medical stores must have qualified chemist who should be able to advice on generic medicines. Ministry of Health, in all the State Governments, must publicise details of Generic Medical shops so that patients can obtain competitively priced medicines in lieu of highly priced "branded" medications.
 
Finally, NPPA must make it mandatory for all priced medicines, must contain, on the package, not only the MRP Rates, but also the specially discounted rate for the Senior Citizens. The NPPA website does not show if the senior citizen's discount is 5% or 7%. Many drug stores, upon request, give 5% so as to retain the client, but they do NOT give this reduction voluntarily. NPPA can make this obligatory on the part of drug makers to print MRP and MRP for Senior Citizens.
 
It is time NPPA also prints the email address of the Organisation in their web site.  The list of senior officers, starting with the Chairman, Injeti Srinivas (phone 23746630/6639 and fax No: 23746652) and others must also show details of those who are qualified as Pharmacists.  
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
 

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COMMENTS

Padmanabha Vyasamoorthy

2 years ago

Many voluntary organisations are setting up generic medical shops that sell medicines at 50 % to 70% of MRP. Even these shops are making sufficient profits.There are more than twenty such shops in AP / TS. Without depending upon the govt philanthropic organisations must set up similar shops everywhere.

iPhone 6 priced at Rs53,000 in India: Pre-booking to start from Tuesday
iPhone 6 and iPhone 6 Plus will be available in India from 17th October and customers can pre-book their handsets from Tuesday, 7th October with Apple’s authorised resellers, Ingram Micro, Redington, Rashi Peripherals and Reliance
 
Pre-booking for Apple's latest iPhone 6 series will start in India from Tuesday, 7th October and the handsets would be available from before Diwali for customers. Starting price for iPhone 6 is Rs53,000 for the base version and the higher version would be sold at Rs80,500 during its launch next week.
 
In a statement, Apple India, said, “iPhone 6 and iPhone 6 Plus will be available in India beginning Friday, 17th October, from an expansive network of Apple Authorised Resellers. Customers can pre-order iPhone 6 and iPhone 6 Plus beginning Tuesday, 7th October.”
 
The company did not disclose the price at which it will sell iPhone 6 series in the country, but said, “Pricing details will be soon made available by Apple’s partners: Ingram Micro, Redington, Rashi Peripherals and Reliance.”
 
Even before the official announcement on sale, vendors through e-commerce have starting offering the premium smartphones at price starting from around Rs56,000.
 
Amazon website showed that iPhone 6 is selling for around $750, including shipping cost, in US which amounts to about Rs46,000.
 
Both iPhone 6 and iPhone 6 plus come in three versions in terms of storage: 16 GB, 64 GB and 128 GB. Both the models have 8 megapixel camera and 1.2 MP front camera. Both these phones support 2G, 3G and 4G network.
 
The two models are different in terms of their size.
 
While iPhone 6 has 4.7 inch screen, iPhone 6 plus has 5.5 inch display.
 
Compared to a thickness of 7.6 mm of iPhone 5S, the sixth generation has a thickness of 6.9 mm (iPhone 6) and 7.1 mm (iPhone 6 Plus), respectively.
 
The previous version of iPhone was launched in India for price starting at Rs53,500 which is recently selling at around Rs30,000 per unit on an e-commerce website.
 
According to research firm IDC, Samsung is the market leader with 25.2% share of the global smartphone market, followed by Apple (11.9%) and Huawei (6.9%) during the second quarter of 2014.
 
A total of 295.3 million smartphones were shipped in the April-June 2014 quarter, up 23.1% from 240 million in the same period last year.
 

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Strong US dollar may whiplash Emerging Market Debt
Sadly, the end of easy money will not be as much fun as its beginning. Creating trillions of dollars from nothing and then taking them back does have consequences many of which we still have not seen
 
Central bankers are acting like over indulgent parents. They decry the over indulgence and irresponsible behaviour of their progeny, but continue to enable their activities. Larry Fink, the CEO of the world’s largest money asset manager, BlackRock, says, “You’re hearing from banking sources – whether it’s the BIS or the FSB or the Federal Reserve – a narrative that ‘there’s bubbles’, a narrative that ‘the private sector is guilty of investing in products that maybe lack long-term liquidity at interest rates that in the long run would probably represent some form of losses’. And the reality is, though, they’re to blame – and they’re not taking any of that responsibility.” The problem gets worse when you consider currencies.
 
Central bankers are not worried about the strong dollar. They feel that emerging markets were warned by the so-called taper tantrum in 2013. A senior official of the US Federal Reserve Bank said, “The emerging markets have had an entire year to think about the risks. We have signalled our intentions very clearly.” Then, of course, the Fed, the Bank of Japan and the European central bank created trillions of free money in the hopes that it would help their own economies grow. They should hardly be surprised that much of it found its way into emerging markets or that their ‘warning’ did much good.
 
The central bankers’ policies rewarded debtors and crushed savers. So savers had to hunt for yield in any place they could find it, often that was in emerging markets.
 
This could be a major problem similar to what happened in 1997. In that year a financial collapse known as the Asian crises occurred because of what has become known as “original sin”, the borrowing that is borrowing in a currency other than your own. Many commentators have written correctly that emerging markets have been issuing debt in their own currency to avoid the issue. But it still might not protect them.
 
While it is true that emerging markets have issued debt in their own currency, it is also true that they have issued quite a lot of it to foreigners. This is known as the carry trade. The exact size of the trade is unknown, but there are an estimate that it could be about $2 trillion of foreign capital has been invested in emerging market local currency debt.  
 
As central bankers worked overtime to push interest rates to zero, their currencies declined as well. Investors in emerging market debt not only gained higher yield, they also benefited from currency appreciation. With successive quantitative easing programs (QEs) this has been going on for a long time, but all good things must come to an end.
 
QE in the US will end this month. The result is that the dollar is now at a 17 month high. Local currencies have started to decline (in the case of the Brazilian Real and Russian Rouble – plummet). According to the JPMorgan EMCI index, emerging market currencies have fallen below their 2007 low. When currency losses become higher than the interest rate advantage, the trade will unwind.
 
The other problem is that there is a lot of dollar debt out there. Exactly how much corporate debt is there and in what currency is not yet known. If you look at the amount of debt issued according to a country’s statistics and the amount of debt issued by companies, there could be a discrepancy of over 100%. Why? Much of the debt was issued off shore. For example, a Chinese coal company would not issue dollar denominated debt in China because it is illegal. Instead, they would sell bonds through Hong Kong. Therefore, the amounts are issue could be much larger than many economists now suspect.
 
The final problem is that this market is very illiquid. So as the US tightens interest rates, the dollar will appreciate further increasing the likelihood of an unruly exit.
 
Sadly, the end of easy money will not be as much funded as its beginning. Creating trillions of dollars from nothing and then taking them back does have consequences many of which we still haven’t seen.
 
(William Gamble is president of Emerging Market Strategies. An international lawyer and economist, he developed his theories beginning with his first-hand experience and business dealings in the Russia starting in 1993. Mr Gamble holds two graduate law degrees. He was educated at Institute D'Etudes Politique, Trinity College, University of Miami School of Law, and University of Virginia Darden Graduate School of Business Administration. He was a member of the bar in three states, over four different federal courts and speaks four languages.) 

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