Medical costs need creative rethink

Medical costs need creative rethink

The persistent thick haze that has blanketed Bangkok in recent weeks has led to growing disenchantment with the government and calls for meaningful action. I find it hard to believe that authorities appear to have put so little effort into planning for such outbreaks of pollution and properly warning citizens.

Nearly everyone in the capital these days is wearing a facemask. But if we really want to protect our lungs, we're told, nothing less than an N95 respirator mask will do. At anywhere from 100 to 800 baht apiece, such protection is not cheap.

That brings me to today's subject, which is the high cost of medical services in general, and for once I think the current military-led government deserves some applause. A lively debate has ensued since Dec 27 when the Commerce Ministry announced a plan to put medical-related fees, including drugs, supplies and service charges, on its price-control list.

The decision was a response to consumer complaints of high charges at private hospitals. The ministry floated the proposal after consulting with the Public Health Ministry, private hospitals, consumer groups and insurers. Pending endorsement by the Central Committee on Prices of Goods and Services, it will go to the cabinet for approval. Then, a committee will need to be set up to decide on reasonable rates for services and establish price ceilings.

This is not the first time the government has attempted to help patients manage medical expenses at private hospitals. In 2015, it declared that private hospitals could not set drug prices above the label price and had to disclose any mark-up for additional costs. Second, they had to allow patients to choose where to buy their medications by giving them prescriptions that could be filled elsewhere.

China has been busy in this area as it pursues the twin goals of creating a less centralised, more market-driven drug-pricing system, as well as combatting monopolies and ensuring that new, branded drugs are made available at affordable prices. Generic drugs are also more costly than they should be.

Under a pilot programme, major cities bulk-buy certain drugs together, forcing companies to bid for contracts under a plan to drive down generic drug prices.

Due to the quirks of China's regulatory system, multinationals have to wait years for approval to import new drugs, while domestic generic makers can do a thriving business in copying, testing and getting local permission for the medicines. At the same time, the industry benefited because of the lack of a centralised system for quality control.

Multinationals like Pfizer and AstraZeneca have been able to win more hospital tenders for their off-patent drugs, based on high quality assurances for their higher-cost medicines. That has kept prices elevated throughout the pharmaceutical sector.

The fact is, drug prices have a huge impact on the health of the population in general. But issues related to prices are changing fast as the economy and technology evolve. In low- and middle-income countries, the price of medicine is the single most important factor determining availability and affordability.

In high-income countries, where insurance plans covering drugs are more widespread, the price may have less impact on affordability for consumers; however, drug prices are important for governments, insurance companies and drug-buying agencies.

In the US, the Democrats in the House of Representative have introduced legislation aimed at lowering medicine prices. Rep Elijah Cummings, who chairs the House Oversight Committee, sent letters to 12 major drugmakers seeking information on price increases, investment in research and development, and corporate strategies to preserve market share and pricing power.

Taking on Big Pharma is a guaranteed vote-getter. But policymakers also have to realise that drugs are the most significant reason behind the past half century of gains against both chronic and life-ending disease. Policies aimed at reducing drug costs must not restrict supply, jeopardise quality or inhibit innovation necessary for tomorrow's cures.

Thus, governments too need to look at how they can eliminate excess regulatory barriers to the supply of new drugs and generics, which would unleash the power of competition.

For pharmaceutical companies, their reputation can be improved by more responsible pricing behaviour and complementary programmes to enhance the distribution of their products to the less privileged at highly subsidised prices.

Both policymakers and businesses need to meet somewhere to find a win-win solution. I and others who are seeing their parents ageing while we battle health-threatening city pollution are hoping for some enlightened and sustainable ideas.

Nareerat Wiriyapong

Acting Asia Focus Editor

Acting Asia Focus Editor

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