ECONOMYNEXT – Patients are asking doctor to prescribe good drugs after Sri Lanka slapped price controls, slashing the prices of many branded drugs, pushing up pharmacy revenues by 30 percent, Health Minister Rajitha Senaratne said.
Senaratne said doctors have related how patients pensioners, are asking for branded drugs, whereas earlier they were uneasy when original drugs, which are more expensive, were prescribed.
"This is the change," Senaratne told reporters earlier this month, at ceremony where the state gave buyback deals for domestic manufacturers outside the competitive tender process.
"We controlled the prices of 48 drugs. That is about 402 drugs produced by different companies."
Unlike a generic drug maker, a company that builds a brand produces a better product, bringing market discipline to quality.
In the pharma industry the efficacy of a generic drug cannot be guaranteed because clinical trials are only performed by the original drug maker. However there are many generic firms who also build their own brands.
Though the World Health Organization and state healthcare systems have tried to undermine branding, most patients and doctors through their own experience know what drugs are more effective.
Senaka Bibile, a Marxist, tried to eliminate branding, for decades, but so far his efforts have failed and doctors in Sri Lanka are still free to prescribe more effective drugs to patients. Price controls were also advocated by Bibile.
Pharmaceutical firms which are protected by government patents, have come under fire even in developed markets for raising prices, several years after they were produced.
Research and development of new drugs are high, when regulatory compliance costs are added on. On average a US pharma firm may spend around 300 million dollars to bring a drug to market. But over time, prices have to fall as the development costs are recouped.
Senaratne says while margins have gone down, pharmacies are experiencing a revenue boom.
Prices of some drugs were slashed to one tenth in some cases, he said. He said a pack of drugs taken for high blood pressure was earlier sold at 2,900 rupees, now it is 280 rupees. Another drug earlier sold for 84.50 rupees is now available for 15 rupees, he said.
Even a Panadol sold for 3.00 rupees is now 1.30, he said.
Some companies were exporting drugs to Sri Lanka with labels saying ‘for sale only in Sri Lanka’ he said.
Senaratne said sales at pharmacies have gone up by 30 percent, though owners said margins of individual drugs were thinner.
"But because sales had gone up by 30 percent, they say they have also got some justice," Senaratne said.
Patients who earlier did not take the full course of drugs were now taking the full amount prescribed.
"Unless they take all the drugs for the period prescribed by the doctor, you cannot get better," Senaratne, himself a dentist said. (Colombo/Jan17/2018)