Price Controls and Drug Affordability in India: Policy Options

Abstract

Earlier work (Goddard et al. 2006) served to emphasise the significance of drug price controls that are an important policy instrument, because health systems cannot rely entirely on market mechanisms for healthcare delivery. Price controls are a method of regulating drug prices for achieving health policy goals (Gray & Matsebula 2003). The governments use interventions from the supply side by controlling drug prices and/or from the demand side by restricting reimbursements and by raising patient co-payments (Cai & Salmon 2005). From the manufacturers’ perspective, price controls restrict free market activity, limit profits, and restrict return on investment.