The cost of medicines is a subject that is close to the heart of many and evokes reactions. Recently, the Ministry of Health announced its intention to make prices of medicines available to consumers.
This announcement received mixed responses, which ranged from it being viewed as an attempt at price fixing – to it being the right of consumers to know the price.
The cost of medicines, or its increasing costs, 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 determinant and may not even be the major determinant.
It becomes a very emotional and sensitive issue when a patient is not able to avail of a 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 that we hold in our hand does not just take into consideration the cost of the raw materials, the cost of production, packaging and so on – but one also needs to consider the 10 to 15 years of research, testing in laboratories, clinical trials that the innovator companies undertake.
A number of compounds could reach the final stages of approval but may not make it to the market because of concerns of 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$1 billion. Therefore, it is accepted that research-based pharmaceutical companies are given the sole right to market their product for 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 for the development of the formulations for their products and some limited clinical trials (bioequivalence studies) to prove that their products 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. The NPRA uses internationally accepted standards and testament.
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 the pharmaceutical companies.
In 2015, the 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. However, it is not always about profit.
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 manufacturer to recoup their costs of research and development. 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 they do face challenges.
Since its inception in 2003, it has developed and implemented treatments for diseases such as malaria, sleeping sickness and just this week, news about a cheaper alternative for Hepatitis C.
Some countries regulate the prices of medicines sold in their country. Malaysia practices 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 by the government to the patient at no cost), does not control drug prices.
The system has worked satisfactorily thus far and patients have access to medicines except for some drugs, where the cost becomes prohibitive, and therefore, the number of patients that 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 Ministry of Health 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 originally 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 Ministry of Health Malaysia is to inform the public that medicine prices are not fixed and that there is a range of prices for a particular drug. If this information was available, then consumers and patients will be able to find out if they have been overcharged, given a discount or charged something within the range by the healthcare provider.
The professional relationship between the healthcare provider and the patient is important, thus it is good for the consumer to be informed of the reason why the price of a medicine is high or even low and if there is an alternative.
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. PT THOMAS is Executive Dean of the Faculty of Health & Medical Sciences, Taylor’s University.