Price control doesn't help improve access to medicine, says study

Consumption of price-controlled drugs in rural areas down 7% over past two years, that of non-price controlled products up 5%

Price control on drugs, mandated by the 2013 Drug Price Control Order (DPCO), has not helped improve access to these medicines in the country, a study by IMS Health has claimed.

In 2013, the DPCO had mandated a price ceiling on 652 unique formulations in India to make medicines affordable and increase public access.

“Price control has limited impact on improving patient access and is not aligned with the requirements of a vibrant economy like India,” said Nitin Goel, general manager at IMS Health South Asia. IMS Heath is a NYSE-listed healthcare information and technology services company.

D G Shah, secretary-general of the Indian Pharmaceutical Alliance, said the artificial price control has introduced distortions in the pharma sector. “Since it is more profitable to manufacture non-controlled products, smaller companies are exiting controlled products. Competition is being eliminated from market. In the long run, prices will move up.”

The study released on Tuesday said the consumption of price-controlled drugs in rural areas has decreased by seven per cent over the past two years while that of non-price controlled products has risen by five per cent. It said the price of both price-controlled and non-controlled medicines are already among the cheapest in India compared to other developing countries and price increases have been below or at par with inflation.