A 2005 report of the National
Commission on Macroeconomics and Health says that wholesale prices of medicines rose faster than all other commodities between 1993 and 2004.

Almost 80 per cent of what India spends on medicines is out-of-pocket (see ‘Bearing The Brunt’). Every Indian household spends half its healthcare budget on medicines. In fact, the number of drugs specified in the Drug Prices (Control) Order (DPCO) has shrunk in phases from 347 in 1979 to 74 now. DPCO drugs are a quarter of the total pharma market. “That list is redundant,” scoffs C.M. Gulhati, editor of Delhi-based review Monthly Index of Medical Specialties and a vocal proponent of price control. “There have only been deletions since the 1990s, no additions.” The pricing of the rest has been kept free in the hope that competition will keep prices in check. “That works in some cases, but in others it doesn’t,” says Sengupta. India’s pricing policy is fast outliving its utility. Compounding matters further is that adding more drugs to the existing list is likely to create more problems than it can solve.