Mining of DPCO 2013

Editor's Notes

• #8: (Source: Current prices of DPCO covered formulations are available with company name on the website: http://www.medindia.net/drug-price) There is the need to expand the scope of price control to include all dosages and combinations. In sum, coming in 2013, a decade after the Supreme Court asked for it, the DPCO is clearly late. But even worse, it is too little.
• #9: Price control in already low price market – why and how government is doing that How the NLEM and NPPA decision are irrational What can be modified in the current system To find the ambiguity and inadequacy of current NLEM, DPCO How much DPCO has been effective till now To understand the basis on which price caps applied for latest NLEM – if irrational how it can be modified in future Comparative study with WHO recommendations for NLEM and Indian system Overall scenario scanning of the NPPA, DPCO, NLEM in Indian Pharma system
• #12: As we all are aware of biggest loophole of DPCO 2013 which is its applicability to only those medicines which are included in NLEM 2012. NLEM 2012 contains only 348 medicines with certain strength & route of administration. Moreover, in upgraded NLEM there are very few combinations which have been included. They are trying to make it correct but still majority of fixed dose combinations are out of purview of DPCO2013. Here as it is shown in the graph nearly 50% of the domestic market is covered by combinations in various therapeutic areas, this way majority chunk automatically falls out of control. Amongst remaining plain molecules certain top brands are their which are having different strength, so this way they fall out of control. Thus, it proves that there is there is urgent need for improvement in National List of Essential Medicines. Interpretation : Nearly 50% of the domestic market is covered by combinations in various therapeutic areas, this way majority chunk automatically falls out of control. It proves that there is there is urgent need for improvement in National List of Essential Medicines.
• #13: Interpret : Total 80% market in terms of sales from various therapeutic categories fall outside price control due to different reasons. . Let’s decode it step wise according to therapeutic categories.
• #14: Interpretation : In the Respiratory Category according to IMS MAT April 2013 1st brand in terms of sales is a combination by ABBOTT ~ PHENSEDYL which is worthy 225 crores which is out of price control. Other top selling 11 Brands in this category are also combinations which are not included under NLEM. Around 94% uncontrolled
• #16: Out of those 15 first brand 7 brands including highest selling RAPITHER Inj. (47.8 crore market ) is from IPCA laboratories. So, Price control authorities should keep their eye on the company’s strategy which keeps them out of control.
• #19: About 60 million Indian population is diabetic.
• #25: According to DPCO 1995 pricing method followed was Cost Based Pricing. Later on as per NPPP 2011, weighted average of price top 3 brands according to sales was implied.   Now, as per mentioned under NPPP 2012 pricing method followed is simple average of prices all the brands having market share greater than 1%. So, it means it is market based price which has turn into disastrous situation in medicine pricing decision So, we can say that cost based price was indeed better one. This is not the end. Here comes the real issue that even when doctors are having enough awareness about difference of prices of various medicines, still they don’t prescribe it. So, no matter how much improvement government will bring in NLEM, until unless they bring mandate for doctors to prescribe NLEM medicines there will be no improvement.   This way, output heavily relies on the implementation by doctors.  
• #27: In pharmaceutical industry, the cost of manufacturing a drug is relatively low compared to the price it is sold at. By selling drugs at inflated prices, big companies & retailers pocket a large share of the money paid out by the consumer. (112.67 crore market-cetrizine)   Here is the price comparison of various categories followed by different organizations. From table we can infer it out that medicine like Cetrizine which is in very common use is being sold at Rs.3.75/tablet when the same medicine is being procured by Tamilnadu Medical Corporation at Rs. 0.9/tablet. So, it’s clearly shown that companies are charging 2011% profit on single medicine. While under Jan Aushadhi scheme price kept is 2.75 which is inclusive of cost of manufacturing + Retail margin. Thus, it provides window for pharmaceutical companies to charge profits on their products. So, that can be middle way for balancing both industry as well consumers.   LOCOST (Low Cost Standard Therapeutics) which is public, non-profit charitable trust registered in Baroda, Gujarat which allows poor Indians to access drugs at affordable prices.   TNMSC is Tamilnadu state board for procurement of medicines for their local hospitals & people which has been proved very much successful. The same model is also successfully implemented in Kerala & Rajasthan.   NPPA is in a way to implement the same model at National level inviting all states to take active participation in developing efficient model for medicine procurement.   The Model When TNMSC was set up, drug procurement in the state was scattered, with each public hospital sourcing drugs on its own with no standard procedures.   TNMSC, which relied heavily on information technology systems and processes to streamline drug procurement, helped in dramatically bringing down drug prices.   For instance, the price of 10 strips of antibiotic ciprofloxacin tablets in 1992-1994 (before TNMSC) was Rs. 525. That fell to Rs. 88 in 2002-2003. Similarly, the cost of 100 Norfloxacin tablets fell from Rs. 290 to Rs. 51.30 during the same period.    These improvements have helped bring down the average cost of drugs for inpatients in Tamil Nadu’s public hospitals to Rs. 102, according to the National Sample Survey Organization’s (NSSO) sixtieth round survey in 2004.   In comparison, the average cost of drugs was Rs. 3,268 in Haryana, Rs. 2,166 in Himachal Pradesh and Rs. 3,187 in Rajasthan.   The total average cost of a patient’s hospital stay in Tamil Nadu was the lowest at Rs. 255.                                     Figure 21 : Procurement of Tamilnadu Medical Corporation     (Source : http://forbesindia.com/article/on-assignment/tamil-nadu-medical-services-corporation-a-success-story/15562/1#ixzz30LMuSPJC )   The key to TNMSC’s success is its tendering process and a passbook system for distributing drugs. It floats tenders at the beginning of every year to identify suppliers for about 250 drugs, which are the most used and usually cover the treatment spectrum. When the purchases are state funded, it follows a two-tier tendering process where first technical bids are evaluated and then price bids decide the supplier.   TNMSC follows a stringent testing process — it currently has about 11 laboratories empanelled with it. These labs test the first batches of every drug supplied and subsequently also random samples picked from TNMSC’s 25 warehouses spread across the state. Earlier, drugs used to be supplied in bulk. The corporation put an end to it and insisted on blister packaging and special labeling for it in English and Tamil, which made it difficult to divert them.     
• #30: This kind of move have become essential as innovative medicines from Big Parma’s will remain uncontrolled no matter how much stringent environment we create in terms of price. at one stroke if only the right decisions could be taken!