ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Drug Price Control Order 2013

As Good as a Leaky Bucket

The hope that prices of medicines will reduce and super-profits will be curtailed has been belied by the government's drug control measures. As warned earlier, there are many loopholes which will keep most medicines out of price control, while manufacturers are likely to move away from controlled medicines to the production of unregulated ones. There is not even a proper mechanism to record and respond to consumer grievances.

Inputs from Anurag Bhargava and Mira Shiva on a related larger draft are gratefully acknowledged. Omissions are of the authors.

A new Drug Price Control Order (DPCO 2013) was announced in May 2013. The simple average price control formula and other features of the National Pharma Pricing Policy (NPPP 2012) now find confirmation in DPCO 2013.

In an earlier piece in this journal (“Pharma Policy 2012 and Its Discontents”, EPW, 5 January 2013), we had shown how the ceiling price for medicines arrived at by the simple average formula has no relation to its cost of production, and would result in many “price-controlled” medicines continuing to be sold at high margins of 1000%-3000%. We had also commented on other problems with the NPPP 2012 – these of course continue in DPCO 2013. We briefly review some of them below – and point out some new problems in the DPCO 2013.

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