Source: THE ECONOMIC TIMES-1st February,2020
The government’s
move to regulate prices of essential drugs has actually led to increase in
their cost against similar drugs that remained unaffected by the price control,
according to the Economic Survey for 2019-20. “Our analysis shows that increase
in prices was witnessed for more expensive formulations than for cheaper ones
and those sold in hospitals rather than retail shops, reinforcing that the
outcome is opposite to what Drugs Price Control Order (DPCO) aims to do —
making drugs affordable.”
The data was
analysed for 1,751 formulations and 49,893 brands and showed that prices of
drugs that came under DPCO increased on an average by ₹71 per mg of the active
ingredient, whereas the prices increased by Rs13 per mg of the active
ingredient for those unaffected by the price control. Prices of those
formulations, under price control, sold in hospitals increased as much as Rs99
per mg, while those formulations which were not under price control and sold in
hospitals, increased by only 25 per mg. Thus, “the difference-in-difference
estimate for formulations sold primarily through hospitals was ₹74 per mg, it
added.
