Pricing woes of the pharmaceutical industry Comparisons are difficult to make, however, one should
ask oneself a simple question: Would you prefer to have the average level of health and the accompanying healthcare costs of the 1970s or those of today? Treatment regimes have certainly changed over time. For example, the innovative drugs that have come into the market in the last few years did not exist 20 years ago. Ask any patient what they would pay to cut chances of having a second heart attack or stroke just through prescription therapy and the answer seems likely to far exceed the actual price of the new medicines that can just do that!The
pharmaceutical industry had been known for its exceptional strength and self-reliance and in spite of the curbs and controls, based on pseudo socio-economic considerations, it had managed to survive. Thanks to its caliber, capacity, efficient organisation, sound business and marketing methods and its efforts in the field of research and development. But the industry is practically driven to the wall by the stringent price controls that have made the production of several essential drugs a problem.One is left wondering how such a distressing state of affairs has been allowed to come about in an industry that is supposed to look after the health of the nation. If this industry is sick, it is the people who suffer by being deprived of essential and life-saving drugs they need. It is, therefore, necessary in the short term to sufficiently revise the prices of drugs which have been fixed at un-remunerative levels, and in the long term to modify the Drug Laws 1976, leaving the industry to the operation of the natural laws of competition.Due to directives on 'Direct to Consumer' marketing, the pharmaceutical manufacturers have confined themselves to promoting their products only to health professionals. There is therefore a dire need for the industry to bridge this communication gap and to take the people into confidence not by means of publicity campaigns or hard sell advertising, but by organising and including programs of education and health awareness in their social services network, which many of the pharmaceutical firms have been maintaining for quite some time. This way they can win friends, gain trust, influence people and remove the misunderstandings and ignorance generally prevailing about the industry. One has to, however, realise that there is a vast difference between business and philanthropy, and the two should not be mixed up.There has to be a healthy investment climate, the necessity and importance of profits for the well-being and expansion of industrial enterprises has to be accepted. In the absence of sufficient profits, enterprises do not thrive and progress, production suffers and industrial growth is retarded.As for our country, in matters of economic and industrial policies we have to eschew ideology and be realistic and pragmatic in our thinking and approach. The ideological bias and the absence of pragmatism on the part of our policy-makers have indeed taken a heavy toll of our industry. The pharmaceutical industry has also fallen victim to it, but it should not resign itself to its fate. Instead, it has to take up the challenge vigorously and has to fight its cause with a united front.Adequate profits ensure the health and stability of enterprises, help build up the national reserves, enable expansion to take place and create more employment. Most important - in the case of pharmaceutical industries - the means to ensure research and development for medicines with better safety and efficacy profiles.All of these are beneficial not only to the growth of the industry, but also to the national economy in general. As long as profits are within reasonable and prescribed limits, they should be regarded as something healthy, desirable and necessary for the well-being and growth of industries. Therefore, instead of being discouraged or curbed, a sufficit margin of profitability has to be allowed and ensured, whichever the industry, all the more so if it is engaged in the production of basic necessities.Before considering the prices of drugs, it may be noted that according to a study conducted over a 20-year period by Professor Frank Lichtenberg of Colombia University, who stated that with new and innovative drugs on the market people obtained several benefits which included (a) reduced total medical
expenditure, (b) ensured a longer life, (c) and improved quality of life.The main findings of his study were that with the new innovative drugs:1. The number of hospital bed-days declined most rapidly for those diagnoses with the greatest increase in the total number of drugs prescription and the greatest change in distribution of drugs.2. An average increase of 100 prescriptions for the average diagnosis was associated with 16.3 fewer hospital bed-days for that diagnosis over the time period.3. A $1 increase in pharmaceutical expenditure was associated with a $3.65 reduction in hospital care expenditure. Surely no manufacturer can reasonably be expected to produce and sell something at below costs, whether it is medicines, flour, sugar or other food items, whatever the purchasing power of the people.Drugs no doubt are a vital necessity and should be within the reach of the masses and their prices should be the lowest possible, at the same time, unless their prices are also economic to the manufacturers, it would discourage and inhibit their larger production which alone can ensure plentiful supplies and lower prices.