Medicine-induced Poverty & the Drug Prices Control Order

Pharmaceutical market trends affect our ability to bring affordable medicines to the rural communities we serve. Through our rural franchise network, World Health Partners markets branded medicines taken from national and international essential medicines lists, sourced from local manufacturers. WHP’s procurement system is thus affected by a new regulatory trend in India which is claiming to improve the affordability of essential medicines by bringing a growing list of medicines under price control. In the media frenzy surrounding the roll-out of price regulation, one critical underlying issue has unfortunately been left out of the debate: rational use of medicines. What India actually needs, even before cheaper drugs, is enforceable regulation preventing the sale of irrational and dangerous drugs and the institution of a culture of rational prescribing of medicines.

The DPCO 2013 and its popularly perceived shortcomings

The central government’s release of the Drug Price Control Order (DPCO, 2013), which takes the 348 medicines included in the national essential medicines list and places them under price control, has attracted criticism from media and industry pundits, who argue that price controls discourage manufacturers from producing these drugs, while not doing enough to regulate prices across the massive range of medicines available in the market in India.

To see how price control works, let’s look at the antibiotic amoxicillin, commonly used to treat pneumonia.Currently, retail prices range from Rs. 34 – 70 (USD 0.55 – 1.13) per 10 capsules of 250mg. With the introduction of the DPCO, the maximum allowable retail price for 10 capsules becomes just Rs. 27.6 (USD 0.45).  This means that, to continue to produce this drug, all upstream players (manufacturers, distributors, retailers) must adjust their margins in order to price the drug at the ceiling cost. Drug prices in India are already lean given the highly competitive market powered by high volumes. Critics state that the further squeeze inflicted by the DPCO will erode profits to the point that manufacturers will cease production of the drugs altogether. Manufacturers will abuse loopholes in the DPCO by manipulating the composition of the drug – adding a component, changing the dose, or creating a fixed-dose combination – so as to evade price control. Meaning: manufacturers ensure their profit while consumer access to essential drugs in the DPCO will be compromised.

Medicine-induced poverty – the truth unraveled

With minimal regulation over the various drug combinations and minimal oversight of prescribers, the real blame for poverty induced by medicines lies with the systems that produce and prescribe drugs. There are an estimated 70,000 different drug formulations on the Indian drug market ranging from the unnecessary to the dangerous. The majority of permutations lack any significance against the tried and true formulations included in the national essential medicines list, which have 100% coverage under the DPCO. The current coverage of the DPCO is quite rational and includes the main formulations scientifically proven to reduce mortality and morbidity for today’s healthcare needs. Many combinations not included under price control are actually irrational or unnecessary, and are peddled for profit.

The public does not under the distinction between essential and non-essential drugs.  For example, the aforementioned article gives the pain reliever paracetamol (akin to acetaminophen or Tylenol) as an example of the inadequacy of coverage under the DPCO because the 500mg strength is included under price control while the 650mg strength is not. But is the omission of the 650mg strength of paracetamol from price control a matter of public health importance? Hardly! 500mg is an internationally accepted, perfectly efficacious dose. If a consumer prefers to take a 650mg “extra-strength” tablet over the price-regulated 500mg option, it is fair that they pay a premium for that choice.

A price regulation list is actually an effective means to restrict prescription practices to only the evidence-based essential drugs, thereby preventing public expenditure on unnecessary combination drugs or new molecules not yet established by evidence. If developed appropriately, the DPCO may just be the start of one such list for India.

Rational drugs & rational prescribing – a fixed dose combination for India’s steady rise out of poverty

The criticism of inadequate coverage is faulty: price control alone will not ensure essential, affordable medicines are available. Citizens must be sensitized to their right to question a prescription containing 8 different drugs and to ask for a treatment plan devoid of the unnecessary fillers (e.g. supplements, unnecessary antibiotics). They must be sensitized to their right to request that the chemist dispense an inexpensive brand of the prescribed generic salt, or to question their prescribing physician whether a fancy new drug may be replaced by an older but perfectly acceptable generic alternative. The government should channel energy into improving affordable access to essential medicines through a public insurance program which provides drug coverage particularly for the most financially vulnerable people.

Most drugs on the Indian market are irrational, and have no place on national formularies.  Beyond a price control strategy, India needs a decisive and rational drug policy which cracks down on the sale of irrational drug combinations that comprise a significant portion of the drugs on the market today. India’s healthcare system needs the introduction of mandatory continuing medical education which imparts evidence-based knowledge to doctors and lessens the grip that medical representatives have on the prescriber’s pen.


DPCO. (2013). Drug (Prices Control) Order. New Delhi: Department of Pharmaceuticals.

Nagarajan, R. (2013, December 1). 80% of medicines not covered by price control order. Retrieved from The Times of India: