Abstract
The contribution of India in making patented drugs more affordable has been recognised widely. Though the prices of patented drugs are lower in India, the retail markets suffer from several imperfections. As a result, despite the existence of large number of manufacturers, substantial price differences exist between different brands of the same drug. In India medicines are purchased mainly by the people themselves rather than by the government or through health insurance. Because of limited public health and insurance facilities, access to medicines has been low in India. India has drug price control in some form or the other since 1963. But India adopted a selective approach—while some drugs are under control, competing drugs have been kept out of control. This provided the opportunity to manufacturers to stop or reduce the manufacture and sale of drugs under control and promote the competing ones out of control. After 2005, India has re-introduced product patent protection. MNCs have started selling new patented drugs at exorbitant prices but these are yet to be included under price control. India has been able to restrict product patents by exempting grant of patents under certain conditions. But potentially the more effective instrument of compulsory licensing has remained unutilized in India.
Professor of Economics, Indian Institute of Management Calcutta. This is an outcome of the research project, “State, globalization and industrial development in India: the political economy of regulation and deregulation”, coordinated by the Norwegian Institute of International Affairs.
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Notes
- 1.
See any standard economics textbook (for example, Paul A Samuelson and W A Nordhaus, Economics, McGraw Hill) for the theoretical link between price and market structure.
- 2.
Cited by Kidron (1965), p. 251.
- 3.
- 4.
MSF, Untangling the Web of Antiretroviral Price Reductions (various editions).
- 5.
See Footnote 1 above.
- 6.
For selected formulations, D G Shah (“Myths about pharmaceutical industry”, Indian Pharmaceutical Alliance, May 2012) has shown that brand leaders are not the costliest. But the same data also shows that brand leaders are not the cheapest. The point is that there are products in the market which are cheaper but sold less.
- 7.
See the Report of the Working Group on Drugs & Food Regulations for Formulation of 12th Five Year Plan, p. 26 (Ministry of Health & Family Welfare (2011).
- 8.
- 9.
- 10.
The text of the 2002 Policy is available in the website of the National Pharmaceutical Pricing Authority (http://www.nppaindia.nic.in/index1.html).
- 11.
The text of the 2012 Policy is available in the website of the National Pharmaceutical Pricing Authority (http://www.nppaindia.nic.in/index1.html).
- 12.
See the text of DPCO, 2013 (available at http://www.nppaindia.nic.in/index1.html) for other features including the details of alternative steps, where there are less than five manufacturers having 1 % or more market share and in case of no reduction in the average price.
- 13.
While notifying the ceiling prices fixed, the government also provided the worksheets used for calculating the ceiling prices. In these worksheets government has also calculated the extent of decrease of the ceiling price. To do so government considered the ceiling price compared to the maximum price among the important brands.
- 14.
The author is the Managing Director, IMS Health—South Asia and the calculations are based on IMS Health, Total Sales Audit March 2013.
- 15.
Note submitted to Bhattacharjea and Sindhwani (2013), by D G Shah of the Indian Pharmaceutical Alliance, p. 50.
- 16.
“NPPA has fixed the prices of Antidiabetic & Cardiovascular in respect of 108 non-scheduled formulation packs under Paragraph 19 of DPCO, 2013 in related Notification/order dated 10.7.2014” (in http://nppaindia.nic.in/whatsnew.htm).
- 17.
“Report of the Committee on Price Negotiations for Patented Drugs”, February 2013 available at the website of the Department of Pharmaceuticals, www.pharmaceuticals.gov.in.
- 18.
- 19.
“US Opposition to Section (d) of the Indian Patent Act”, Statement by Minister of State (Independent Charge), Ministry of Commerce & Industry, in Rajya Sabha, 30 July, 2014 (http://pib.nic.in/newsite/PrintRelease.aspx?relid=107612).
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Chaudhuri, S. (2015). Pharmaceutical Prices in India. In: Babar, ZUD. (eds) Pharmaceutical Prices in the 21st Century. Adis, Cham. https://doi.org/10.1007/978-3-319-12169-7_7
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