This major step will have adverse effect on manufacturers of branded drugs who expect a revenue loss of about Rs1,500 crore but will be beneficial to the aam aadmi in reducing his cost of medications

The recommendation by the Group of Ministers to bring 348 essential medicines under MRP (maximum retail price), on Thursday, is a major step taken to alleviate the suffering of the “aam aadmi” in reducing his costs on medications.

This fixing of MRP for 348 essential drugs “at an average price of all brands in a segment that has more than 1% market share” will bring much-needed relief to the public.

What is even more gratifying to note is that it will be statutory for doctors to recommend generic medicines, along with branded ones, as this will enable the consumer, the patient, to obtain medicines at the most competitive prices.

Such a move, when it is finally approved by the Cabinet, to which the recommendations of the Group of Ministers will be submitted by next week, should be given widest publicity through the media. In fact, it may be even more worthwhile for all drug stores to put up proper notice, in all regional languages, so that public is aware.

These notice or display boards must be made uniform, except for the language part, as it may change from state to another, so that the buyers are aware that they can now have access to generic medicines from these shops.

While prices may come down as a result of this move and more generic shops will be opened, there is the hidden danger that some manufacturers may indulge in higher trade and other forms of discount so that the store keeper is tempted to push up sales of their products.  We must guard against such a possibility. Another much-needed step is to ensure that all drug stores, which prepare and supply prescription drugs, must have qualified pharmacists on duty and must be identifiable.

This major step will have adverse effect on the manufacturers of branded drugs according to the industry sources, who expect a revenue loss of about Rs1,500 crore.  Years ago, it was reported in the US media that for a new drug to be marketed, the overall cost of research, trials and all related work cost the manufacturer something like $800 million, which is why medications are expensive, resulting in high pricing spread over several years of selling!

You may also want to read: Medical prescriptions: Money spinners or drainers? , Get your medicines at 60% discount! , Proposed changes to expand drug price control .

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was 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. He can be contacted at [email protected].)