A seminar titled “When and how does government succeed and when and why does government fail: economic policy making in pharmaceutical industry in India” was delivered by Prof Sudip Chaudhuri, Visiting Professor, CDS at Joan Robinson Hall, 3 September, 2019.
Abstract: Cancer is one of the leading causes of illness and death in India and the government rightly acknowledges and stresses the importance of making cancer medicines more affordable. In February 2019, Government has imposed a ceiling of 30% trade margins on selected anti-cancer medicines to make these more affordable. Some other anti-cancer medicines have been under price control since the Drug Price Control Order (DPCO), 1970 and currently under DPCO, 2013. The talk analysed how effective has been the government measures to control the prices of anti-cancer medicines. Despite the attempts to fix ceiling prices and to impose trade margin caps on some anti-cancer medicines, the prices have remained high and prices of the same product sold by different manufacturers vary widely. The lower priced products are not necessarily purchased more and even when the prices of some products have fallen substantially, the overall consumer gain has not been significant. This is in contrast to the Patents Act, 1970. The abolition of product patent protection in pharmaceuticals under this Act has been one of the major reasons for the rise and growth of the pharmaceutical industry in India. The talk concluded with a discussion of why the Patents Act, 1970 was successful but why DPCO, 1970 and subsequent DPCOs were not so effective.