Health Matters: The Curious Case of Missing National List of Essential Drugs 5 Months After Launch

At least 30 drugs in the National List of Essential Medicines (NLEM) have negligible annual sales between Rs 0-2 lakh per annum, still we call them ‘essential’ medicines. For example: Hypertension drug Methyldopa and antibiotic Cloxacillin registered ‘nil’ sales in the last three years, according to the data submitted to the health ministry. Timolol eye drops registered sales of Rs 1 lakh per year.

The prices of drugs, which are part of the NLEM are kept under control, which means they are kept below a certain threshold so that they remain affordable to a common man. But the data shows that the common man is not even buying those drugs anymore.

While the key list is blocked by obsolete drugs, which are no longer prescribed by the doctors in the real world scenario, several top selling drugs or injections are out of the purview.

Good news is that the government has recognised the gap.

In one of the surprising moves, the Ministry of Health and Family Welfare has re-initiated the exercise of reviewing the NLEM, in fact, after it was released by the Union Health Minister in September.

According to highly placed sources, the list is being re-looked on the orders of health minister Mansukh Mandaviya who told a group of officials that “we are copy-pasting the same medicines, year on year.”

Gliptin family, including popular anti-diabetic drugs Sitagliptin and Vildagliptin are being considered for replacing the non-performing molecules.

“There is a high probability that the minister would now ask officials to take off such obsolete products from the list who are no more in demand and replace them with high in demand, life-saving drugs such as Meropenem,” an official privy to the development told me recently.

He quoted an example of a critical life-saving injection, which is widely used in hospitals, but not yet part of the NLEM.

“Meropenem’s cost to the manufacturer, as per our calculation, is around Rs 220 but its retail price to the customer is Rs 2,500. This medicine is given to almost every patient admitted for the surgeries.”

News18 had done a story in December over the latest exercise following which I received several calls and WhatsApp messages from the industry officials and pharma lobby groups.

Reason: The anxiety to know if any of their top selling drugs is being considered to go come under the purview of the list, and hence, under the price control, which leads to squeezing of profit margins.

What’s Happening Inside Health Ministry?

Top health officials are reviewing the list of essential drugs on the basis of market sales. A top source in the health ministry asked me to not mention the name of officials involved in the drive in my stories. The reason he cited was predictable. “Pharma companies try to influence the decision-making. We want to do this exercise silently,” he said.

So far, the government is considering the inclusion of top-selling, expensive medicines such as anti-diabetic Sitagliptin, anti-bacterial injection Meropenem and drug Cefpodoxime under the price control.

While reviewing the list is absolutely normal, reviewing the list after its launch was a bit abnormal. The industry experts and reporters, in fact, were left confused why the list was not available in the public domain despite the formal announcement.

This list, which was promoted by the government via their official social media platforms, contained 399 formulations.

These formulations were submitted by an expert committee under the Indian Council of Medical Research (ICMR). This list is under review, now with a different lens altogether.

Data Sought to Find Out How Useful is NLEM

After receiving the orders from the health minister’s office, e-mails were shot to two offices under the ministry – the Bureau of Pharma PSUs of India (BPPI) – the department running the central government’s pharmacy outlets called Jan Aushadhi Kendras and the drug price watchdog National Pharmaceuticals Pricing Authority (NPPA).

BPPI and NPPA were asked to send the data on sales of selected drugs (in the NLEM) for the last three years.

The ministry has now received the data, which shows that at least 30 drugs from the suggested NLEM have registered sales between Rs 0 and Rs 2 lakh on an annual basis. This means in an important list of drugs for the country, at least 30 are obsolete with negligible market sales.

Imagine: If your daily doses of commonly used, life-long medicines such as Volibo 0.3 or Januvia 100 mg were replaced in the list, your monthly medical bill will shrink anywhere between 10% and 40%.

In some cases, prices of cancer drugs have come down by 90%.

However, the idea of drug regulation should follow a balanced approach. We must remember, excessive regulation of price is not a solution. Over regulation threatens to drive a crucial drug out of the market as for drug makers, the molecule becomes financially non-viable to continue production.

At the end, patient suffers. While he enjoyed a brief period of increased savings on medical bill, now he/she is unable to find the drug in the market.

PLI Scheme Can be a Game Changer

The latest Economic Survey pointed out that the out of pocket expenditure (OOPE) for health increases the risk of vulnerable groups slipping into poverty because of catastrophic health expenditures.

While in the move of revamping the list, the government can earn kudos by bringing a few big brands or popular drugs in the price control, the way forward needs a much sharper set of reforms.

Start from the Drug Price Control Order, 2013 – the laws that govern drug pricing in India. It is poorly designed for everyone, including patients and even for the industry as it does not respond to genuine and abnormal increases in raw material or input costs that require quick revision of prices.

Also, the ‘Simple Average Formula’, which is used to calculate the ceiling price, does not take into account the cost of production.

An NGO, All India Drug Action Network, had earlier in its petition explained why the formula is inadequate. It calculates the ceiling price as the simple average of prices of all brands that have equal to or more than 1% market share.

Sales of prices of brands of medicines with 1% market share tend to crowd towards the higher side. “That is there are more brands selling at higher prices than at lower prices. Therefore, when you take a simple average, the average also tends to be high,” they had explained in the petition to the Supreme Court.

Also, strangely, the inclusion of a molecule in the NLEM is done only in its particular form. For instance: Paracetamol 500 MG. The pharma companies end up evading the control by releasing other forms by changing strengths (250 mg, 650 mg), dosages, forms (slow release, fast action etc) and combinations.

Designing a list of essential drugs and following a rational strategy based on the cost of production can be explored where pharma companies can be given a decent margin over the actual cost.

The Modi government’s much hyped Profit Linked Incentive (PLI) scheme, not only on papers, but in the real world should be able to make an impact by offering incentives to pharma companies to manufacture life-saving drugs and bring costs down.

This scheme can be a game changer to eradicate the problem of access to affordable medicines without hurting margins of the drug makers.

There are solutions. But start with finding the “essential medicines” first.

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