💊 Costly Medicines Push 5.5 crore Indians into Poverty Every Year!
India has cheaper medicines than most countries but still high costs of drugs are becoming unsustainable for us. Here's how we can solve this problem.
Indians pay 70% less than the world for medicines.
But we still have one of the highest out-of-pocket healthcare expenses in the world!Â
And quite a major portion of these expenses are medicine-related, sending 5.5 crore Indians into poverty every year!Â
So, where exactly are we going wrong? And how can we fix this?Â
ReadOn!Â
🤔 What's In A Name? Apparently Everything
The major problem here is the lack of insurance penetration in India.Â
Most Indians do not have health insurance and have to pay for medicines out of their pocket.Â
And even though Indian medicines are cheaper, sustained costs of buying these medicines are making Indians poorer. So, what can we do?Â
Buy cheaper medicines.Â
Yes, cheaper medicines exist but most Indians don't buy them. Why?Â
Because they don't have a brand name. Huh?Â
Let's make this simple.Â
There are two kinds of medicines in the market:
Name brand innovator drugsÂ
Generic drugs
Name brand innovator drugs are those that pharma companies have created from scratch after years of research.Â
To ensure these companies get some returns on their years of investments, they get a 20-year patent in India. During this time no one can copy their drug.
When the 20-year patent period ends, anyone can use the formula and make these drugs. From specific, they go generic.
Generic drugs ensure that the originator brand doesn’t become a perpetual monopoly.
But 20 years is a long period. It’s enough for the originator to create a high recall in consumer’s mind and ensure that they are the only ones in the market way beyond the 20 year period.
Theoretically, after 20 years, original drugs should reduce prices as competition enters.Â
However, because they are so closely associated with the disease (Fever - Crocin), most people choose to stick to the branded drug and don't go for the generic ones.Â
So, prices remain high.Â
That’s not all, people do believe that the cheaper generic drugs (around 1/5th the price of innovative branded drugs) are of a lower quality.Â
To solve this problem, the government has come up with a solution. Any drug whose patent has expired has to reduce its price by 50%.Â
Though this is just a suggestion right now, it could cut down medicine prices.Â
Great move, no?Â
Wrong. This could only inspire pharmaceutical companies to raise the prices of their drugs when they are in the 20-year patent period, so that even when prices are halved, they could continue minting money (remember cobra effect?).Â
Solution? Widespread acceptance of generic drugs.Â
The government has tried to take a few steps to boost their popularity like:
Suggested that doctors prescribe the name of the underlying chemical in a medicine instead of a brand name. For instance, prescribe Paracetamol instead of Calpol or Crocin.
Set up Jan Aushadhi stores, where unbranded generic medicines are sold to the poor.Â
But doctors and pharmacies still prescribe name-brand innovator drugs because they get a higher sales commission.Â
And there are only 3,200 Jan Aushadhi stores in India.Â
So, what we need to do to make medicines cheaper is:
Make stringent rules regarding the manufacturing of generic medicines to boost public confidence.Â
Educate the public about generic medicines.Â
Increase the number of Jan Aushadhi stores.Â
But wait!Â
Right now, there is another major battle to be won to ensure that our medicines are cheaper: The India-UK Fair Trade Agreement.Â
Curious to know more? Become a Club Member, and get the last bit of this piece on our ReadOn Club WhatsApp group!
Until next time, ReadOn…
âš¡In a line: India can make its medicines much cheaper if it helped popularise generic drugs.
💡Quick question: What other steps can the government take to reduce our medical bills?
Share this with your friends via WhatsApp or Twitter and help them grow! See you tomorrow :)
If you are coming here for the very first time: Don’t forget to join us on WhatsApp to get daily updates! 👇
In my opinion the fear of Indians not purchasing generic drugs is justified. I recently read the book "A bottle of lies", it uncovers all the scams and tricks used by big pharma companies to cut costs. Companies such as Ranbanxy sometimes go to the extent of using less active ingredient to save costs. This means that a patient needs to consume 5 tablets for it to be as effective as 1 tablet. Other issues such as drug release time, in simple terms some medicines should take effect in the body only at a specified pace but it so happens that the generic drugs are not able to control this factor which is fatal for the patients.
And if you think of regulations in India that they must atleast be checking for the efficacy of a medicine then it's basically a joke. Documents are backdated here along with fake trials on non-existing patient being a common practice.
I am not saying that all companies are doing it but most are.