KATHMANDU, JUNE 06
Following the COVID-19 pandemic last year, India, which is the world’s supplier of generic drugs, increased the price of raw materials.
It has even restricted the supply of 26 pharmaceutical ingredients as well as finished products to Nepal, making it difficult for Nepalese companies to supply essential medicines at their usual prices.
Since drug manufacturers cannot raise prices on their own, the Pharmaceutical Manufacturers Association of Nepal contacted the Department of Drug Administration (DDA) about the issues they were facing. When the price of the US dollar was Rs. 62, commodity prices ranged between $2 and $3. But the price of the dollar has now risen to 117 rupees and the commodity price to 9 dollars. The association has therefore proposed an increase of around 50% on the prices of essential drugs.
According to the DDA, since medicines are an essential commodity, their price is capped, but this does not mean that their prices cannot be increased.
Although the DDA has looked into the situation, the procedure to increase the price is lengthy, which could lead to a shortage of essential drugs in Nepal. In such a situation, the production of generic drugs might be the best solution to keep drug prices low and also enable uninterrupted supply.
Generic drugs are similar in composition or quality to drugs produced under a brand name. The difference between the two is like the CocaCola soft drink we have in a five-star hotel and the one we drink in a local restaurant.
One point to consider is that generic drugs do not have brand names. So there is no extra production cost on attractive packaging, edible colors and wonderful taste as branded drugs. Examples of generic drugs are paracetamol, ascorbic acid, dapagliflozin plus metformin and hydroxychloroquine.
The brand names of paracetamol are Cetophen and Cetamol.
Thus, the production of generic drugs may be the only way to adjust the price, which will be acceptable to both the producer and the consumer. Due to the drug price cap, the price cannot be shared between producer and consumer like other products.
So the best way is to reduce the importation of unnecessary raw materials to manufacture eye-catching brands and replace brand name drugs with generic drugs. If such an environment is created, there might even be a drop in drug prices.
We can learn from India Sun Pharmaceuticals which is a billion dollar company selling the cheapest generic drugs in the world.
A version of this article appears in the June 7, 2021 printing of The Himalayan Times.