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Drug pricing policies around the world and what India can learn.

India exports medicines to more than 200 countries worldwide. Pharmaceutical market in India consists of more than 20,000 manufacturers and is termed as the 3rd largest market in the world, by volume. In spite of that, more than half of its population has no access to essential medications in government hospitals due to heavy dependence of a majority of patients on private sector. But with the benefits, the bill would also bring along with it many lacunas which can prove to be a big ill factor for the foreign pharma companies to lose interest in doing business in the Indian market who until now were the major supplier of many drugs which are not available in India otherwise. What India can learn?

India has been waging a war on drug prices. The list of drugs under price control has steadily expanded from 74 in 1995 to nearly 860 by 2019. The prevailing thinking in the country is that prices should be brought down through measures like listing drugs as essential, diluting intellectual property (IP) rights and imposing price caps.

At present, the Pharma sector in India is following the method of cost-based mechanism to determine the price of the drugs. Unfortunately the cost-based policy not only creates an inefficient and inconsistent mechanism of price calculation but most importantly and above all, it has proved to be a failure to help medicine reach to the needy ones.

Thus, that is being the prime reason for India lacking behind, in comparison with other developed and developing country, in terms of health aspect of its population.

Under the new policy, the recommended method to be used for determining the price of drugs is the WAP, based price policy which will be a simple average of all brands with one percent market share cut-off.


Pharmaceutical companies should be brought on board to partner with the government to achieve the vision of healthcare access for all. There is a wide variation in the prices of different branded drugs and generics that are available in the market.

A broken healthcare system, sporadic interventions in pricing, health financing issues and the lack of trained health sector resources are just a few of the major issues that define where India went wring and can learn from.

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