Domestic diagnostics manufacturers want govt to go slow on prices

As the Centre prepares its Essential Diagnostics List (EDL), taking a cue from the list launched by the World Health Organization (WHO) in May, domestic manufacturers are urging the government not to control the cost of diagnostics the way it controls the prices of essential medicines.  

But on the other side are public health scholars who caution that not having price control could lead manufacturers to form cartels. They want the government to control prices, but through a transparent mechanism, and promote competition in  diagnostics. 

The WHO broadly defines Essential Diagnostics as tests that satisfy the primary healthcare needs of a population.  Its list includes 113 tests of which 58 are basic tests for hemoglobin, urine, and blood glucose to diagnose a wide range of common diseases. 

The remaining 55 tests are for diseases that the WHO considers high priority, such as tuberculosis, malaria, and hepatitis B and C. Some of these tests are required in primary health care centres and some in health facilities that have clinical laboratories. 

The price of diagnostic tests, especially in the private sector, has been prohibitive for consumers. For example, the GeneXpert test for tuberculosis could cost up to Rs 2,000 in private labs.

Ideally, treatment should follow diagnostic tests but in India many doctors prescribe drugs such as antibiotics based on the symptoms, without or with delayed diagnostic tests —  a practice that has made antibiotic resistance a big health crisis. 

Then there are patients who are incorrectly diagnosed or remain undiagnosed. For example, data suggests about 47 per cent of diabetes patients remain undiagnosed. 
 

“For too long, the global health community promoted empirical treatment for many conditions in low-income settings because building a reasonable laboratory infrastructure was considered too difficult and expensive,” wrote Madhukar Pai in The Conversation, a non-profit online platform for academicians. “It is time to reject that mindset.” 

Pai heads Global Health Programmes at Canada’s McGill University. He participated in the first consultation organised by the Indian Council of Medical Research (ICMR) in March to prepare India’s Essential Diagnostics List. 

With the ICMR planning to regulate the cost of the EDL, domestic manufacturers are pushing back. “Products included in the EDL should not be brought under price control,” said Veena Kohli, Secretary of the Association of Diagnostics Manufacturers of India.  Kohli argues that, unlike medicines, diagnostics are not directly purchased by patients but by the service providers or labs. 

“The price of a diagnostics constitutes only 10 to 20 per cent of the total cost of the test to the patient. Bringing this negligible component under price control will not make diagnostics test affordable to patients,” said Kohli.  

If the government controls prices, the fear, said manufacturer Jatin Mahajan Mitra, Managing Director of J Mitra & Company, is that “the industry might not make those products.”

Yet the domestic industry wants the government to primarily procure diagnostics from it. “That will help the nascent domestic industry, currently worth around Rs 5 billion, grow,” said Mitra.

Supporters of price control believe it is essential to discourage monopoly situations. But before advocating for or against, Leena Menghaney, a public health lawyer working with Medecins Sans Frontieres, said a body of technical experts should judge the pros and cons. 

One issue, she said, is price control will lose its purpose unless there is  transparency in costs at each level. For example, how has a machine been priced at a particular threshold? What is the cost of things like reagents? Transparency, she said, will show that an irrational price has not been set by the government, as has happened with hepatitis C medicines. 

Public health experts such as Menghaney believe that the government should encourage innovation and competition to further bring down prices. The interest in the diagnostics field can be gauged from the fact that as much as 60 per cent of the total resources of the Biotechnology Industry Research Assistance Council  that funds start-ups goes into healthcare and 60 per cent of that amount is claimed by diagnostics start-ups, said P K S Sarma, head of BIRAC’s technical unit. The interest in the diagnostics sector is likely to grow now that there is going to be an essentials list, he said. 

T Sundararaman, Professor in the School of Health Systems Studies in Mumbai, feels that while price regulation is important, the government first needs to fix India’s broken diagnostics system: the public lab infrastructure is insufficient, labs are inaccessible to people who live in rural areas, samples collected from them spoil on the way, lab technicians are few, and the quality control mechanism is in a shambles. “The EDL is an opportunity to push for the upgradation of labs and get human resources,” said Kamini Walia, a scientist with ICMR.  

Another issue is whether India should have regional diagnostics lists given the different diseases across the country. This matter, along with price regulation and other issues, are likely to be discussed shortly, and the list is expected to be ready by the year end.