Criticizing Policy Decisions

Governments (rightly) get criticized for so many policy decisions. But, as Rahul Matthan reminds us, policy making is hard – the real world is messy; practical aspects have to be considered; there are rarely any perfect solutions; trade offs have to be made; and yes, conflicting interest groups have to be managed.

 

Pranay Kotasthane wrote of the problems with a (well-intended) directive that doctors in central government hospitals should only prescribe generic medicines (unbranded, but equivalent and cheaper options), not branded ones (more expensive). That sounds like a perfectly good policy, right, esp. in a country like India with a huge number of poor people?

 

And yet, even that policy has so many issues, as Kotasthane explains.

Circumventing via chemists: Could pharma companies “incentivize” chemists to say the generic isn’t available and suggest the branded option as the alternative? Obviously, yes:

“So from doctors having the power, the balance will shift to the chemists.”

Quality of generics: We don’t have quality control measures in most domestic companies manufacturing generics. The regulatory regime isn’t strong; the enforcement even weaker. Is it really a good idea to trust generics?

Branded may be the right choice (sometimes): For certain conditions, or combination of diseases, a branded medicine may be the best choice. Whereas the generic one may not be proven to be safe or effective for that combo of conditions. Are we expecting the doctor to now risk breaking the directive and recommend the branded one?

Alternative pricing control measures: If pricing is the concern, he asks:

“Has the government tried any other option like negotiating with pharma companies directly to purchase drugs in bulk and reduce their cost? If yes, what kind of reduction has been possible? Can more be done with centralisation of inventory and purchase decisions?”

Opportunity cost: Every choice has a cost. “Opportunity cost” refers to the other opportunities you miss when you pick a certain course of action.

“In a country where we have an acute shortage of doctors… minimal standards of safety and effectiveness and where we have barely adequate health cover for most of the citizens, is this the area where state capacity be focused?”

 

I felt this was an excellent example of the challenges with policy making. So the next time we are inclined to curse all governments and their policies, it might be good to remind ourselves:

“The road to public policy hell is paved with good intentions. Always.”