Is there a right price for medicine?
RECENTLY, the Health Ministry announced its intention to make prices of medicines available to consumers. The announcement received a mixed response with some viewing it as an attempt at price fixing while others saw it as the right of consumers to know the price.
The cost of medicines is often cited in discussions or complaints about the increasing cost of healthcare. While the cost of medicines is a component of healthcare costs, it is not the sole, and may not even be the major, determinant.
It becomes a very emotional and sensitive issue when a patient is not able to receive treatment because it is not affordable. More information about prices and pricing may help to address some of these concerns.
The price of a tablet does not just take into consideration the cost of the raw materials, production, packaging and so on. One also needs to consider the 10 to 15 years of research, testing in laboratories, and clinical trials that the innovator companies undertake. A number of compounds could reach the final stages of approval but still not make it to the market because of concerns for safety or efficacy by the industry itself or the regulatory bodies.
It is often stated that the cost of successfully bringing a new drug into the market exceeds US$1bil. Therefore, it is accepted that research-based pharmaceutical companies are given patent protection to allow them to recoup their costs of development and turn in a profit.
After the patent has expired, generic manufacturers are spared the extremely costly processes of research and development. They do carry out research to develop formulations for their products and some limited clinical trials (bioequivalence studies) to prove that they are as effective as the innovator products. However, because they are not saddled with the high cost of original research and development, they are able to sell their products at a cheaper price.
Both original and generic products have to comply with standards of safety, efficacy and quality. In Malaysia, the Drug Control Authority (DCA) through the National Pharmaceutical Regulatory Agency (NPRA) is tasked with ensuring the safety, efficacy and quality of pharmaceuticals.
We must accept the fact that pharmaceutical companies, while providing a useful service, are not welfare organisations but are businesses that are responsible to shareholders and owners. Consumers recognise this and only expect responsible pricing by these companies.
In 2015, increase in the price of pyrimethamine, a 62-year-old drug that was newly acquired by a company, from US$13.50 to US$750, caused an international uproar.
It is not always about profit, however. It must also be recognised that pharmaceutical companies bring to market “orphan drugs” for rare diseases which do not have a large enough market for the manufacturers to recoup their research and development costs.
Many countries offer incentives to pharmaceutical companies to encourage them to produce such drugs that are very useful for a small segment of society.
There are also organisations like Drugs for Neglected Diseases Initiative (DNDI), which take up potentially effective compounds and attempt to develop them as medicines.
It is a very noble initiative but it does face certain challenges. Since its inception in 2003, it has developed and implemented treatments for diseases such as malaria and sleeping sickness.
Malaysia practises a free market system as far as drug prices are concerned. The Government, while trying to get the best price for medicines (which are largely supplied to the patient at no cost) for the public healthcare sector, does not control drug prices. The system has worked satisfactorily thus far and patients have access to most medicines except for some drugs, where the cost becomes prohibitive and therefore the number of patients who receive a particular treatment may have to be restricted because of budgetary constraints.
Recently, the Government announced its intention of asking pharmaceutical manufacturers and distributors to inform the Health Ministry of the recommended retail price (RRP) of a medicine. The idea is to compile a list of drugs in the country with the range of prices for drugs with the same ingredients in the same amounts.
As there is usually a significant difference between the price of a generic medicine and an original patented medicine, and for reasons mentioned previously, the list should separate the prices of generic and original products.
I believe the intention behind this proposal by the Health Ministry is to inform the public that medicine prices are not fixed and there is a range of prices for a particular drug.
If this information is available, consumers and patients would be able to find out if they have been overcharged, given a discount or charged something within the range by the healthcare provider.
Of course, this intention of the Government to inform the consumer of the price of medicines can only be fully realised if the supplier itemises the price of each medicine.
EMERITUS PROFESSOR DR P.T. THOMAS Executive Dean Faculty of Health & Medical Sciences Taylor’s University