Price control unlikely to improve access to medicines in India - IMS study

New Delhi, July 14, 2015: According to a new report by The IMS Institute India, price control is neither an effective nor sustainable strategy for improving access to medicines for Indian patients.

The study, 'Assessing the Impact of Price Control Measures on Access to Medicines in India', is based on both extensive quantitative data analysis of growth and volume trends and in-depth qualitative interviews with industry stakeholders and policy makers.

Following the publication of the Drug Price Control Order (DPCO) in 2013, more than 652 unique formulations in India are now subjected to a price ceiling in an effort to maintain affordability and increase access to drugs, particularly for low income patient populations. According to IMS Health, however, such a strategy is ineffective at best and counter-productive at worst.

Noted economist and author, Dr. Surjit S. Bhalla formally released the IMS study. Commenting on the findings, Dr. Bhalla said, "ln my experience, the poor are the last to benefit from price control interventions. Not surprisingly, this study shows that high-income patient populations have been the main beneficiaries of DPCO 2013. In addition to price control, tariffs on essential medicines completely defeat the goal of making such medicines available to low-income patients."

Some key findings:
• Primary beneficiaries of the DPCO 2013 price controls have been high income patient populations, rather than the low-income targets.
• The consumption of price-controlled drugs in rural areas has decreased by 7% over the past two years, while that of non-price controlled products has risen by 5%.
• The DPCO 2013 has resulted in an increase in market concentration (fewer brands are now listed) and a decrease in competitive intensity (the average number of new brands has gone down since 2013).
• Price control has increased margin pressures for small and mid-sized companies, limiting both employment and investment opportunities in the sector.
Price controls negatively impact internal capability-building and expertise-building initiatives, discourage local talent and undermine the government's 'Make in India' initiative.

These conclusions are corroborated by similar outcomes in China, the Philippines and South Korea, where price controls have consistently failed to improve overall access to medicines.

"Price control has limited impact on improving patient access and, furthermore, is not aligned with the requirements of a vibrant economy like India," said Nitin Goel, General Manager, IMS Health South Asia. "Government's priority should be on strengthening India's healthcare infrastructure and extending universal insurance coverage."

IMS Health's report goes on to provide recommendations for the Indian government to improve the overall strength and sustainability of its public healthcare model. It is recommended that a

 

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combination of healthcare financing and non-financing measures be adopted by the government to address the issues of access and affordability.  Some specific interventions could be:
• Strengthen healthcare financing and extend universal health coverage across population segments with focus on providing cover for   medicines
• Invest in healthcare infrastructure  and capability  building
• Promote joint and bulk procurement mechanisms, e.g. Tamil Nadu Medical Services Corporation
• Levy a cess on the tobacco and liquor industries to fund the healthcare sector and subsidize essential medicines from  taxes
• Introduce mechanisms to ensure availability of generics at lower prices, to improve affordability for patients i.e. set up dedicated generic medicine   stores

In summary: India needs an all-encompassing healthcare model that is truly able to achieve the objective of improving healthcare access in India; with the government in a lead role and supported by all other stakeholders.

This study was sponsored by the Organisation of Pharmaceutical Producers of India and supported by other key stakeholders.

The full version of the report, including a detailed description of methodology, conclusions and recommendations, is available at www.theimsinstitute. org

Please also see IMS study on what constitutes access to healthcare:
http://www.imshealth.coin/dep1ovedfiles/imshealth/Global/Content/Corporate/IMS%20Institute/India/Understanding_Healthcare_Access_in_India.pdf


For more information please contact:
Janhavi Bellare of AdFactors PR at +91 9322854508


About IMS Health
IMS Health (NYSE: IMS) is a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance. End-to-end proprietary applications and configurable solutions connect 10+ petabytes of complex healthcare data through the INS One'" cloud-based master data management platform, providing com pre hensive insights into diseases, treatments, costs and outcomes. The company's 15,000 employees blend global consistency and local market knowledge across 100 countries to help clients run their operations more efficiently. Customers include pharmaceutical, consumer health and medical device manufacturers and distributors,  providers, payers, government  agencies, policymakers, researchers and the financial  community.

As a global leader in protecting individual patient privacy, IMS Health uses anonymous healthcare data to deliver critical, real-world disease and treatment insights. These insights help biotech and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders to identify unmet treatment needs and understand the effectiveness and value of pharmaceutical products in improving overall health outcomes. Additional information is available at www.imshealth.com.


 

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