Government efforts towards drug price control have reverse effect: Economic Survey
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INDIA - February 1, 2020

Government efforts towards drug price control have reverse effect: Economic Survey

NEW DELHI: The government’s efforts to bring in price controls on drugs has a reverse effect when such drugs become costlier over the years as compared to those whose prices are left to the mercy of market forces, the Economic Survey says.

The Drug Price Control Order (DPCO), 2013, actually does more harm than good, it noted.  

The data the Survey analysed for 1,751 formulations and 49,893 brands, showed that the prices of drugs that came under DPCO increased on an average by Rs 71 per mg of the active ingredient, whereas for drugs that were unaffected by DPCO, the prices increased by Rs 13 per mg of the active ingredient.

Prices of those formulations, under price control sold in hospitals, increased as much as Rs 99 per mg, while those formulations which were not under price control and sold in hospitals, rose by only Rs 25 per mg.

To prove the point, the Economic Survey cited the example of blood sugar medicines — Glycomet (Metformin), which is under price control, and Glimiprex-MF (Glimepiride + Metformin) which is not under price control.

In 2009, Glycomet’s price was Rs 1.2 per tablet, which rose to Rs 4-4.5 per tablet in 2015.

However, Glimiprex-MF, which was not under price control and cost Rs 1.4 per tablet in 2009, was priced at Rs 3.5 per tablet in 2015.

“Price of Glycomet actually increased more than that for Glimiprex-MF after DPCO, 2013,” the Survey analysis said.

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