Shakti Chakraborty, Group President India Region Formulations, Lupin Ltd, on why pharma companies are not in favour of pricing control on drugs
B&E: The National List of Essential Medicines includes the reference molecules only and not their “me too” versions that can be made by making minor tweaks. Does it make the list meaningful?
Shakti Chakraborty (SC): There is nothing like tweaking a molecule. So if you list Ibuprofen as a molecule under the NLEM then the molecule is covered. It doesn’t matter by which name it is sold in the market. Any new addition or subtraction to the formulation can be done by introducing a totally different molecule which may or may not be covered by the NLEM. By definition all the derivatives of a molecule are also covered under the list. For example, in Lupin’s case we have a molecule called doxophylline, which is quite different from theophylline (both are used for the treatment of respiratory diseases) Theophylline is listed under the NLEM but the department says that doxophylline is a derivative of theophylline and hence, is covered under the list.
B&E: The methodology to arrive at the price of a drug is by taking the weighted average of the prices of three top selling drugs in a particular category. What could be its implications on drug prices?
SC: As of now nothing has been finalized on the methodology. The health ministry is proposing to take the weighted average of the lowest three priced brands instead the highest three. If you ask me, no company would like to have this kind of control. For a top class company with good R&D effort, manufacturing facilities etc., you need to incur significant costs. By putting a price ceiling, there will be no incentive for a company to do R&D and bring out quality products. The lack of clear policy is also hurting the strategic planning of the companies. I feel that the market is smart enough to decide the price of a drug.
B&E: The National List of Essential Medicines includes the reference molecules only and not their “me too” versions that can be made by making minor tweaks. Does it make the list meaningful?
Shakti Chakraborty (SC): There is nothing like tweaking a molecule. So if you list Ibuprofen as a molecule under the NLEM then the molecule is covered. It doesn’t matter by which name it is sold in the market. Any new addition or subtraction to the formulation can be done by introducing a totally different molecule which may or may not be covered by the NLEM. By definition all the derivatives of a molecule are also covered under the list. For example, in Lupin’s case we have a molecule called doxophylline, which is quite different from theophylline (both are used for the treatment of respiratory diseases) Theophylline is listed under the NLEM but the department says that doxophylline is a derivative of theophylline and hence, is covered under the list.
B&E: The methodology to arrive at the price of a drug is by taking the weighted average of the prices of three top selling drugs in a particular category. What could be its implications on drug prices?
SC: As of now nothing has been finalized on the methodology. The health ministry is proposing to take the weighted average of the lowest three priced brands instead the highest three. If you ask me, no company would like to have this kind of control. For a top class company with good R&D effort, manufacturing facilities etc., you need to incur significant costs. By putting a price ceiling, there will be no incentive for a company to do R&D and bring out quality products. The lack of clear policy is also hurting the strategic planning of the companies. I feel that the market is smart enough to decide the price of a drug.
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