Drugstore Deception: The Shocking Truth about India's Medicine Market
Subhash Chandra Agrawal 29 December 2023
Jan aushadhi kendras are now being opened under Pradhan Mantri Bhartiya Janaushadhi Pariyojna, claiming a huge saving to commoners ranging from 50%-90% on purchase of generic medicines from these about 10,000 centres throughout the country with an average monthly sale of just Rs1.50 lakh per month for each centre. Much more could, and should, be achieved simply by fixing a maximum trade margin on all medicines and medical consumables including generic medicines of say 30% between ex-factory price and maximum retail price (MRP). 
 
At presently, there is a huge trade margin, especially on generic medicines where a box of 10-20 strips is available with distributors at about one-tenth of the printed MRP including those marketed by renowned drug manufacturers of branded medicines. Even branded medicines had varying trade margins with a box of 10 strips of 10 capsules each of Bifilac-HP with a total printed MRP of Rs2,100 per box available with the distributor at just Rs1,140 per box. 
 
The World Health Organization (WHO) established that even essential drugs in India with the lowest printed MRP are exorbitantly priced over manufacturing cost followed by abnormally high trade margin between ex-factory price and MRP. The same holds good for other medical consumables like a box of 200 Accu-Check Safe T Pro Uno single-use lancing device with printed MRP of Rs2,200 which used to be available at just Rs400.
 
Drug manufacturers, at times, pack just eight lozenges per strip of commonly advertised cough medicines instead of the usual 10 because consumers usually judge by price per strip rather than per lozenge. Many drug manufacturers have started packing medicines in strips of 15 rather than the earlier 10 to boost sales because most chemists sell complete medicine strips rather than cutting the strip to sell in loose. 
 
The national pharmaceutical pricing authority (NPPA) should direct all medicines to be compulsorily packed in units of 1, 2, 5, 10, 20, 50, 100, 200, 500, 1,000 and, likewise, higher multiples, unless permission is sought from the concerned authorities to pack certain medicines in units other than these for dose-wise administration. 
 
The name of the medicine is usually printed just once on the side of a medicine strip. Wrapping foil must be so designed that the name of the medicine may appear for each packed tablet or capsule with the name of the medicine also embossed and printed on each tablet or capsule. 
 
Ex-factory prices of different branded medicines for the same basic salt have a vast difference. Branded medicines from different renowned companies are priced with a heavy difference depending on the popularity of the brand like Calmpose and Valium-5 both having Diazepam-5 as the basic salt have a huge price difference. Government-owned Indian Drugs & Pharmaceuticals Ltd (IDPL), since closed, sold Diazepam-5 under the brand name Calmod at a still lower price. Medicines are put into different categories for price regulation with Calmpose and Valium-5 put in a category where there is no price regulation. The system of having multiple categorisation for medicines must be removed because patients have to take the prescribed medicine irrespective of their categorisation. 
 
A study conducted by a prominent newspaper in the year 2018 revealed that five chemist shops around the premier Post Graduate Institute of Medical Education and Research (PGIMER) at Chandigarh were selling a particular medicine having a price ranging from Rs255 to Rs1,550. There is a regular price increase for many branded medicines, with NPPA being a mute spectator. NPPA should devise a mechanism whereby drug companies may be allowed to have some basic profit margin on all types of drugs, irrespective of their categorisation, allowing any price revision only once in a year, say in January or April every year. 
 
The Madras High Court once directed the income-tax (I-T) department to submit details of claims made by pharmaceutical companies towards tax deduction for gifts made to doctors, the names of doctors and penalties paid by these companies for drug overpricing. Any type of gifts by drug companies must be banned. Paying a commission to medical practitioners by pathological laboratories, investigating centres and hospitals should also be a criminal offence to ensure economical medical investigations. Private hospitals should be directed not to take any share from the consulting or visiting fees of medical practitioners. Some upper limit should be fixed for consultation fees of medical practitioners. 
 
Since the wholesale medicine market of Bhagirath Palace (Delhi) has virtually turned out to be a retail market giving 20%-25% discount even on single strips of medicines, tenders can be invited for opening chemist shops in government and private hospitals at least in big cities where branded medicines may be available even in single strips at 20% discount. 
 
It is quite usual that, many a time, some medical practitioners including in unani, ayurvedic and homeopathic fields mix strong doses of allopathic steroids in unbranded medicines like powders and syrups in a bid to exhibit their self-acclaimed expertise in curing diseases. Only branded medicines should be allowed to be prescribed in all fields of medicine including allopathic, ayurvedic, unani, and homeopathy with the Union government having its large production units for every type of medicine by reviving IDPL in a big way and popularising and extending the scope of its ayurveda unit Indian Medicines Pharmaceuticals Corporation Ltd to develop a healthy competition to force big drug companies to bring down the heavy prices of branded medicines.
 
The central information commission (CIC), in its order dated 1 October 2018 in file number CIC/NPPAT/A/2017/152869-BJ, recommended NPPA and others concerned to consider all these suggestions in the larger public interest. But shockingly, NPPA challenged the CIC-decision just on recommendations (and not directions) at the Delhi high court vide WP(C) 10366 of 2019 and CM No. 42777 of 2019. Soon after, the competition commission of India (CCI), in its policy note, also pointed out towards unreasonably high trade margins as the reason for exorbitant drug prices. But no corrective measures are seen at least on non-essential and generic medicines.
 
Bharatiya Janata Party (BJP)’s member of Parliament (MP) Bhartruhari Mahtab raised the issue of generic drugs in the Lok Sabha on 19 July 2019, rightly demanding an inquiry to find out the efficacy of generic drugs quoting a study that Indian drug manufacturers were producing quality generic medicines for the US and European countries with sub-standard generic medicines marketed in the domestic market. 
 
NPPA should ensure that generic medicines sold in Indian markets are of export quality. The export of world-class generic medicines can provide the country with adequate foreign exchange and reputation because Indian generic medicines are economical compared to foreign-branded medicines of which a major part is the royalty of drug manufacturing companies.
 
The Lucknow bench of the Allahabad High Court, in the year 2018, imposed a fine on three doctors for illegible handwriting on injury reports. The Odisha High Court, on 13 August 2020, advised doctors to write legible prescriptions preferably in capital letters. Medical practitioners should compulsorily issue computerised prescriptions. An exemption may be made for aged ones not familiar with using computers. 
 
The Union health ministry should develop user-friendly software separately for hospitals, pathological laboratories and medical practitioners providing a unique ID for each patient so that the complete medical history may be available even online to the patient. Dual pricing must not be allowed in health services, including for pathological and biochemical tests for normal patients and those covered under the Central government health scheme (CGHS).
 
Vegetarian cellulose capsules should be encouraged to replace non-vegetarian gelatin capsules, presently having 98% market share, to respect the sentiments of the majority vegetarian population. The Supreme Court ruling of the year 2013 had made it possible to distinguish between vegetarian and non-vegetarian medicines by having green and red dots.
 
Providing land at subsidised cost or lease is substantial government-funding. All such hospitals should be directed to suo motto declare themselves as public authorities under Section 2(h) of the Right to Information (RTI) Act, or pay the market price of land provided to these hospitals at current market rates.
 
The Union health ministry, in the year 2018, banned 328 fixed-dose combination drugs out of a total of 349 recommended to be banned by the Chandrashekhar Kokate committee with six more allowed with restricted sale. Medicines considered harmful are banned in India years after these are banned in foreign countries. The Union health ministry should take an immediate decision once some medicine is banned in other countries. 
 
Action is necessary against celebrities advertising popular medicines without having knowledge about the advertised medicines. There should be a total ban on advertisements of medicines in view of the ban imposed on commonly advertised medicines.
 
Reports emerged in the media with opinions of medical experts about artificial health food and cosmetic surgery being possible reasons behind the cardiac arrest responsible for the sudden, untimely death of Hindi film actor Sridevi (54) on the night of 24 February 2018 in Dubai. The fast lifestyle has made youngsters switch to costly gyms from natural walks. The trend of cosmetic surgery for looking beautiful and fit is also increasing at the same pace. 
 
The Union health ministry should set up an expert committee to study the after-effects of artificial health food and cosmetic surgery and only certified health food should be permitted to be sold. 
 
(The writer is an RTI consultant holding the Guinness World record for most letters published in newspapers.)
Comments
gbrhyd
7 months ago
It is the open secret that the hospital business is an evergreen business and it’s like mafia…doctors and pharma companies are minting money. That’s why there’s a heavy demand for MBBS in our country. All governments are responsible for this…
sn_sinha
7 months ago
What I fail to understand that why all manufactures , be it medicines or any other product, are permitted to print very high MRP when the actual cost of the product is much lower. MRP has become a joke since all products are sold at considerable discount on MRP which may be as high as 50%. Thus, the consumer never knows what is the correct price of product and the wholesalers and retailers enjoy large profit margins at the expense of consumers.
iaminprabhu
Replied to sn_sinha comment 7 months ago
Agree ???? %.
What are Consumer Organisation's & Consumers doing to get this corrected ? We all should write collectively & individually to GOI, Consumer Affairs & PMO to get the situation corrected ASAP.
r_ashok41
7 months ago
NPPA is a mute spectator on all the above mentioned facts.Even in Jan aushadhi shops the sales can be increased by keeping the prices low when compared to other retail shops and for this NPPA can play a big role since the profit margins of drug manufacturers are huge and very less is given to the consumers who are faced with higher pricing
iaminprabhu
7 months ago
The day D9CTORS ARE MANDATED BY LAW, to prescribe GENERIC DRUGS with active molecules,

Rather than BRANDED MNC Drugs the situation will improve for poor & Common Consumers !
tuneer73
7 months ago
only in India doctors are let off despite killing patients of medical negligence
recently a new act was passed to free doctors from medical negligence
even selling substandard drugs and harming patients is allowed in the new act
doctors are the greatest mother Fu6king species in India
every year thousands of poor ppl die because of negligence and sub-standard drugs
there was a doctor called Bidhan Chandra Roy who was considered GOD in Bengal as he was the most honest & credible doctor ever born in modern India but sadly none of the doctors could ever come close to him
99% of doctors write blindly most expensive drugs to poor patients and operate on patients when not required
ramaninv1953
7 months ago
Very good article. It should be an eye-opener for the Government to put an end to the profiteering of Drug Industry.
pankajpandya58
7 months ago
Only "GENUINE" compitition can assure real lowest prices. Businessmen have thousands of ways to circumvent any damn regulations. I had been in wholesale business before I retired a few years ago. The merchandise in which I dealt was in a category where it was mandatory to indicate both ex factory price and MRP on the product package. Government thought this would stop rampant profiteering. But all involved in the trade had ways to manipulate prices and the scheme failed miserably.
iaminprabhu
7 months ago
Excellent Article on MURKY WORLD of medicines & related loot of Consumers!
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