Competition Commission of India releases Policy Note with a view to regulate the Pharmaceutical/ Healthcare Sector by pointing out several issues and recommendations
The Competition Commission of India (“CCI”) has issued a Policy Note namely ‘Making Markets Work for Affordable Healthcare’ which has identified several issues in the pharmaceutical/healthcare sector and documented recommendations suggested by the stakeholders.
The Policy Note discusses the key issues that emerged from the Commission’s engagements with stakeholders, enforcement of the law and competition assessment of regulations.
Following are the key issues and the recommendations that have emerged from these initiatives:
- Issue 1:The Role of Mediators in Drug Price Build-Up.
Recommendation: Public procurement of drugs circumvents the challenges arising from the long distribution chain and make essential drugs available at affordable prices. E-pharmacy brings in transparency and can trigger price competition among platforms and among retailers e-pharmacy.
- Issue 2: Quality Observations Behind Production of ‘Branded Generics’.
Recommendation: The main cause of brand proliferation is the deficit of trust. Therefore, the reforms in the regulatory framework need to be done with a view to ensure constant application of statutory quality control measures across all States and better regulatory compliance, will build the trust for non-branded generic and guarantee equal effectiveness. Practice of creating artificial product differentiation for exploitation of consumers can be addressed through a one-company-one drug one brand name-one price policy.
- Issue 3: Vertical Arrangements in Healthcare Services and Lack of Transparency.
Recommendation: Issuing of periodic validated data statistics by the hospitals relating to mortality rate, infection rate, number of procedure is bound to help patients take informed choices and decisions. The hospitals must be mandated to allow consumers to buy standardized products from the open market which are not required on an urgent basis or which do not involve any high degree of quality issue. Every qualified diagnostic labs have been recommended to meet the same quality standards for getting accreditation. This will guarantee the same degree of reliability and accuracy of test results across laboratories. Further, the hospitals have been mandated to accept and initiate treatment based on test reports of outside labs. Portability of patient data will ensure that a patient is no longer locked into the data silos and do not bear additional cost for switching medical services.
- Issue 4: Regulation of Pharmaceutical sector and Competition.
Recommendation: A mechanism may be devised under the aegis of the CDSCO that ensures harmonization of criteria/processes followed by the state licensing authorities and centralization of training of inspectors to ensure consistency in interpretation and implementation. The approval of new drugs should be time-bound and detailed guidelines should be brought out for each stage of new drug approval process including clinical trials, consultation with experts, selection of experts.
Source: Competition Commission of India