Making markets work for affordable medicines

Regulatory safeguards to ensure quality and efficacy of drugs are a necessary pre-condition for effective competition between generic and branded drugs

In September, the Competition Commission of India launched a market study of the pharmaceutical sector, which plays a pivotal role in the public health agenda of any nation. Quality, access and affordability of medicines are key determinants of the overall quality of public health. However, information asymmetry between consumers and suppliers of medicines and supplier-induced demand significantly circumscribe consumer choice. In such a construct, markets by themselves may not deliver optimal outcomes. Achieving these outcomes is paramount as pharmaceuticals contribute 43.16 per cent to the total out-of-pocket expenditure (OOPE) on health. It is reported that medicines worth Rs 1.42 trillion