Balanced approach for pricing of drug

MEDICINES, as we all know, are a critical component of the budget worked out by any middle class family. And if this budgetary allocation goes haywire on account of spiralling prices of drugs, it has an impact on all spheres of activity.

By (Talk of the Town)

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Published: Wed 22 Jun 2005, 10:07 AM

Last updated: Thu 2 Apr 2015, 8:06 PM

For an economy that is driven largely by the middle class, it is imperative that prices of such essentials are kept under control. The Ministry of Health rightly decided to slash down the profit margins on some drugs, but this led to a furore from the pharmacists community, stating that the move would affect their overall profit margins. Be that as it may, an official has gone on record to state that the drug prices are determined more by market forces than the distributing agencies. This appears a little far-fetched since it is fairly well known that a handful of distribution companies have total control over 50 pharmaceutical companies. If this is not monopoly, then nothing is. And when such companies control the pharmacies market, it would be foolhardy to state that market needs constitute the price mechanism. Another point that the top official made was that the high benchmark standards set by the Health Ministry for import of drugs is also a reason for the high prices. Yes, it is imperative to maintain high standards. But high price tags do not necessarily mean the best drugs. This is particularly important in a place where a vast segment of society is classified as middle class. There are always cheaper alternatives, and effective too. What is needed is a balanced approach, where quality is not compromised and yet, the pricing is done in such a manner as to be within the reach of the needy.

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