[Ip-health] KM Gopakumar in The Hindu BusinessLine: World Health Assembly has adopted a key resolution in this regard, a welcome move

Thiru Balasubramaniam thiru at keionline.org
Sat Jul 20 02:01:07 PDT 2019


Towards transparency on health product pricing


World Health Assembly has adopted a key resolution in this regard, a
welcome move

The asymmetry of information due to the absence of transparency around the
price of medicines, vaccines and other health products results in the
exploitation of patients, and misapplication of public funds meant for them.

Drug companies often justify the exorbitant pricing of new health products
by citing costs involved in their research and development without,
however, revealing details that would reflect the real costs.

Generic companies too obscure the high trade margins given to institutional
and retail sellers in the MRP (maximum retail price) while the cost of
production often is a fraction of that printed price.

Many developed countries do not make the negotiated price of patented drugs
public. And non-transparency of clinical trial data further helps companies
sell their new medicines as the best-in-class.

Precisely to fix this sort of opaqueness, the recently concluded 72nd World
Health Assembly (WHA) adopted a resolution to bring in a degree of
transparency involving health products, especially on price.

Titled “Improving the transparency of markets for medicines, vaccines, and
other health products”, it urges member states of the World Health
Organization to “take appropriate measures to publicly share information on
the net prices of health products.” The net price is defined as “the amount
received by manufacturers after subtraction of all rebates, discounts, and
other incentives”. This would reveal the final price obtained by the

Ideally, the resolution should have requested members to reveal the prices
at all stages, including mark-up for wholesalers and retailers. But it is a
milestone, nevertheless, specially given the opposition the Italy-sponsored
resolution faced from the UK and Germany, for instance.

The resolution also urges members to improve transparency involving the
costs and outcomes of clinical trials, information on product sales,
prices, units sold, marketing costs, and subsidies and incentives. It calls
for more information on the patent status and marketing approval of health
products, a move that would help Governments take a call on ensuring these
products are pegged at prices affordable to patients.

Urging the WHO to support member efforts on this count, the resolution also
mandates the agency to monitor the impact of price transparency on
affordability and availability of health products.

The WHO Secretariat is to carry out analyses of the available data from
across the value chain, including clinical trial data and price information
with a view to assessing the feasibility of a web-based tool to share
information relevant to the transparency of health products.

Countries like the US have already taken steps to improve transparency
through a presidential executive order. India, as a co-sponsor of the
resolution, should also act as implementation is critical to check the
exploitation of patients.

Presently, the National Pharmaceutical Pricing Authority’s (NPPA) “Pharma
Sahi Dam” databases provides information on the MRP of medicines, besides
the ceiling prices of medicines that fall under the National List of
Essential Medicines and those that do not. However, there is no legal
obligation on companies to provide information to this database and
information is limited to MRP.

While many public procurement agencies of State governments provide public
procurement prices, there are agencies like the Railways, armed forces and
ESI who do not provide such information.

Taking it beyond MRP

The mere revelation of MRP does not bring relief to patients. Often,
private sector hospitals procure health products at low costs but charge
the entire MRP from patients. An NPPA investigation of two hospitals’ bills
in 2018 revealed that they charged margins of 350 to 1,700 per cent on
various health products. Revealing margins helps expose unethical trade
practices and ensures transparency. A similar case can be made out for
patented medicines and their prices to enable the use of public interest
safeguards to ensure better patient access to these products.

The Government also needs to take steps to make information on clinical
trial costs and data available to the public, especially that involving the
efficacy of new medicines and how it compares to existing treatments or
medicines. A combination of these measures will go a long way in protecting
patients against misleading marketing tactics.

The writer is with the Third World Network and had closely followed the WHA
negotiations on the issue. Views expressed are personal

Published on July 20, 2019

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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