Monday, April 30, 2012

Drug pricing in India

Pricing of drugs and medicines in India continues to be a touchy topic. Way back in 2006, the government proposed bringing around 300+ drugs under price control. The rationale was that drugs need to be affordable to all sections of society. This was stiffly opposed by the pharmaceutical industry and has so far not seen the light of day. But the uncertainty over this issue continues. Following a Supreme Court directive to decide the pricing formula for 348 essential medicines, the Department of Pharmaceuticals came out with a proposal last year. It suggested regulating prices of these essential drugs and their combinations at the average price of three best-selling brands. The last part is now proving to be a bone of contention. For starters, several NGOs and the health ministry have rejected the model. This is on the grounds that the best-selling drugs are usually the costlier brands because they are most aggressively marketed. The department has further confused matters by stating that increasing competition does not necessarily lead to a reduction in prices. This statement contradicts the intention of the department to do away with the cost priced based mechanism of fixing prices of drugs. However, the other side of this argument cannot be ignored either. This being that drug prices in India are already one of the lowest in the world. Despite this, the government has not been able to ensure accessibility of medicines to all. Thus there is no guarantee that even if medicines become more affordable, all people will have access to them. Maybe this is one area where the government needs to give equal focus as well

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