The problem restricting innovation and trials is not Indian Pharmas not wanting to put in money or the court freezing margins. It is the health ministry’s dysfunctional approval process for trials, and the peculiar market situation in India wrt pharma. 🧵 1. Ethics committee approval is mandatory for trials. But try forming an ethics committee if you’re a healthcare institution. It may take years to get permissions if you get it at all. Of course you can go to a committee that already exists. But the time taken, number of queries raised and conditions put are sufficient to deter the bravest of researchers even if it just a simple observational study with zero patient risk. Hospitals and pharma companies are still waiting for approvals of trials proposed over two years back. 2. The business model of Indian pharma is low cost production and high MRP to pass on maximum margins to sellers. To capture market space, Indian pharma companies keep printing higher and higher MRPs. No international pharma giant gives the kind of obscene margins Indian companies do, they focus on their brand image and pitch product quality instead. 3. For example: Before it’s MRP was restricted under DPCO, the same brand of a higher generation antibiotic (meropenem) made by a good Indian pharma company was sold with printed MRPs ranging from 600 to 3500 depending on what the buyer wanted, the supply price was the same: 300. The hospital pharmacy could then supply it to a rich delux class patient at 3500 and less affording general ward patient at 600. Something akin to bottled water being sold for MRP of 20 in stores and MRP of 60 to 100 at airports and cinema halls due to different captive audience at the point of sale. 4. The problem therefore is not Indian companies being restricted by price control hence not getting funds for research. They can very well readjust their pricing to make provision for research, this remains unrestricted. Their selling price to distributors matters to them, not the printed MRP decided by the buyer. 5. In fact, Indian pharma companies are putting in substantial efforts at research and have brought out some original research molecules that are doing well. It’s a late but good start. Even low cost drug giants like Mankind now have hundreds of scientists engaged in research. India also has not less than 128 startups doing dedicated research into new drugs. Over 1000 new drugs by Indian companies are currently in various stages of trials. So it is a myth that Indian companies are not doing research. The problem is not them. It’s the health ministry. 6. These trials will remain stuck if there is no one to give approvals in the first place. Look at the sad condition of the National Medical Commission. For over two years, all seats on NMC panels were lying vacant and the entire organisation was virtually defunct. Some but all vacancies have still not been filled after SC pulled them up for it. This is the body responsible for medical research and ethics in India and even today, most of the posts at the autonomous board for medical ethics and registration are lying vacant. UG and PG Medical education boards too are lying vacant. Is it not the responsibility of the health ministry to at least have the NMC functional at all times? The solution to the pharma research conundrum is lying in plain sight. Processes that work need functional govt departments. MoHFW Naddaji really needs to get his act together and pull up his socks and his subordinates to get things going.

1. There is really no justification for it. The huge margins offered by drug manufacturers are due to market distortion. Manufacturers view the purchasers and prescribers, ie hospital and doctor, as their clients, not the patient on whom the medicine is used. 2. Controlling the margins on these drugs won’t affect research as claimed by manufacturers, since they are still free to fix their sale price to distributors. Only the subsequent exorbitant margin gets capped. However, corporate hospitals will certainly take a big hit and by and large their overall profit margins are not good enough to fully absorb this impact. 3. Bed charges, even in highest category of rooms, are well below the infra and running cost per bed of the hospital. It is a fact that hospitals cover the cost of stay and treatment primarily from high margins on pharmacy. 4. If margins from pharmacy and consumables too are cut off, you may find that hospitals substantially increase other charges to offset this substantial loss of income. We have seen this happen in coronary angioplasty - when margins on stents was capped, the procedure charges were increased to keep package cost the same. 5. Unfortunately in India, as of now services are not valued as much as products. Most patients are willing to pay 1 lakh for an implant, stent or medicine a lot more readily than giving the treating doctor 50k for his expertise. Additionally in oncology, the fear of cancer is a big incentive for people to spend any amount for medicines in the hope of cure. It is a sad reality that manufacturers, hospitals and doctors do exploit this situation. It is not a grand conspiracy, each of them is in it for their own reasons. 6. Even though I’m not a fan of overarching govt controls, in some situations such as this, the govt does need to step in and correct market distortions. I reiterate that for antibiotics too, rampant misuse due to high margins is causing scarily high rates of antibiotic resistance. The margins on all antibiotics must be made so low that there should be no incentive at all for misuse. 7. My opinion is that it is better for medical professionals to charge directly for services rendered, than rely on such indirect and somewhat unsavoury sources of income. People too should also get used to paying their treating doctors well for good, clean and timely services and treatment.

The cost of every dialysis done for patients will increase 3-4 times with dialyser becoming single use. It’s not just a financial disaster for patients who already struggle with significant monthly costs. Many of them may just fall out and suffer catastrophic consequences. Ayushman Bharat too will take a huge blow. The single most commonly done procedure in private setups under Ayushman Bharat is dialysis and this will suddenly become totally unviable. The volume of dialysis being done at pvt centers under AB will likely come down to zero and hit the total volume of AB itself by as much as 50%. I don’t know who has advised the govt on this, but it is a massive blunder. @MoHFW_INDIA @JPNadda @narendramodi

Consider the cost of an ERCP, a common gastroenterology procedure which requires sphincterotome, guide wire, stent pusher, basket at the least. The cost of an average procedure is 50-60k when these devices are reused. If everything is single use, the cost of devices itself will exceed the cost of the procedure and lead to at least a doubling of the cost to well over a lakh. In advanced laparoscopy, the harmonic scalpel is a vital device. We can use it 3-4 times and bring the cost (60k per piece) down sharply. But with this, every patient will need to be charged 60k for not the treatment but the device. It’s a windfall gain for the manufacturers but a massive jump in cost for patients and insurers. I once again request @MoHFW_INDIA @JPNadda @narendramodi to reconsider this disastrous move.

I don’t think the govt has thought this through. It will lead to skyrocketing of costs of procedures that depend on these devices, from cardiac to gastroenterology and urology. Kindly reconsider this @MoHFW_INDIA