Bhaskar A Bhat La 2018

India Studies in Business and Economics
Ajay Bhaskarabhatla
Regulating
Pharmaceutical
Prices in India
Policy Design, Implementation and
Compliance
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Ajay Bhaskarabhatla
Regulating Pharmaceutical
Prices in India
Policy Design, Implementation
and Compliance
Ajay Bhaskarabhatla
Erasmus School of Economics
Erasmus University Rotterdam
Rotterdam, The Netherlands
ISSN 2198-0012 ISSN 2198-0020 (electronic)

ISBN 978-3-319-93392-4 ISBN 978-3-319-93393-1 (eBook)
https://doi.org/10.1007/978-3-319-93393-1
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To my mother
Acknowledgements
I thank the AIOCD for generously sharing the data. I also thank a number of students
at Erasmus School of Economics, who have assisted in writing the book. In
particular, I would like to thank Andreea Beznea, Sophie de Clercq, Farhan Haider,
Huibert van der Hart, David November, Matej Opatrny, Henning Sökeland, and
Clément Staner. I would also like to thank my coauthors on research papers based on
the Indian pharmaceutical industry, Priyatam Anurag, Chirantan Chatterjee, Bas
Karreman, and Enrico Pennings. I would like to thank Erasmus Research Institute
of Management for financial support. I also thank S. Srinivasan, Malini Aisola,
and T. Srikrisna for their insights into the Indian pharmaceutical industry. Finally,
I would like to thank my wife, brother, and sister-in-law for their encouragement
and support.
vii
Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Part I Historical Context and the Motivation for Regulation

2 Brief History of Regulating Pharmaceutical Prices . . . . . . . . . . . . . 11
3 Is the 2013 Price Control Regulation Necessary? . . . . . . . . . . . . . . . 33
Part II The Design of the 2013 DPCO Regulation

4 The Proposed Design to Fix Ceiling Prices Under 2013 DPCO . . . . 71
5 Challenges with Fixing the Ceiling Price Under the 2013 DPCO . . . 81
Part III The Impact of the 2013 DPCO

6 How Effective Are the 2013 DPCO Regulations? . . . . . . . . . . . . . . . 119
7 Firm Strategies to Mitigate the Impact of Price Control
Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
Part IV Enforcement and Compliance

8 Enforcement and Compliance with Price Ceilings on Essential
Medicines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
9 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235
ix
Chapter 1
Introduction
Providing affordable access to essential medicines in developing countries remains a

significant challenge, and it is an integral part of the global efforts to achieve
Millennium Development Goals (Pécoul et al. 1999, UN.org 2015). Recent surveys
show that essential medicines are available in only 58% of the healthcare facilities in
the public sector and 67% in the private sector in developing countries. Also, the
median prices of essential medicines are, on average, 2.92 and 4.62 times higher than
international reference prices in public and private sectors respectively (UN Report
2015).1 To improve access to essential medicines, many developing countries
regulate the prices of country-specific lists of essential medicines, adapted from
the World Health Organization’s (WHO) model list to suit the local needs (IMS
Health 2015). The impact of such regulations depends as much on the design of the
policy as on implementation. Rarely if ever studies examine, in detail, the design,
enforcement and compliance aspects of such price control regulations (see, for an
exception, Bhaskarabhatla et al. 2016).
In this book, we examine these issues by focusing on the case study of the Indian
pharmaceutical industry. India is a useful context to explore the impact of regula-
tions on the pricing of medicines for several reasons. First, India is an emerging
economy that has increasingly adopted policies of economic liberalization and
deregulated several sectors and industries. At the same time, India expanded the
decades-old policy of price control regulations on essential medicines, providing an
opportunity to study the design, implementation, and enforcement of such policies.
Second, India’s price control regulation on medicines affects hundreds of millions
of uninsured people spending money out-of-pocket on healthcare needs, including
the 20% of its population that lives below the poverty line (The World Bank 2017,
Selvaraj et al. 2018). Ensuring the success of such regulations and learning from
1
International reference prices (IRPs) are median prices of quality multi-source medicines offered to
low- and middle-income countries by not-for-profit and for-profit suppliers, as available from
Management Sciences for Health (MSH) International Drug Price Indicator Guide (MDC Gap
Task Force 2015).
© Springer International Publishing AG, part of Springer Nature 2018 1

A. Bhaskarabhatla, Regulating Pharmaceutical Prices in India, India Studies in
Business and Economics, https://doi.org/10.1007/978-3-319-93393-1_1
2 1 Introduction
their limitations is useful for India as well as for other countries around the world
undergoing similar policy changes (Selvaraj 2013).
Third, several civil society groups have successfully argued before the Supreme
Court of India that the prices of essential medicines, which form a significant
component of the healthcare expenses, are soaring, reflecting the need for a govern-
ment response in the form of price control regulations to make medicines more
accessible and affordable. Although India expanded price control regulations
recently, these groups continue to argue for a further expansion of the scope of
regulation. They demand the inclusion of substitute medicines under the price
control regime, greater alignment of price controls with India’s public health
needs, an improvement of the methodology for determining the ceiling price, and
a mechanism to control the exorbitant margins on several essential medicines
(Shankar 2014). There is also a concern among the civil society organizations that,
under pressure from the pharmaceutical companies, pharmaceutical policies and
price control laws that protect access to affordable medicines will quickly erode
(Chatterjee 2013). As a cautionary note, they point to the challenges in access to
essential medicines for chronic diseases such as diabetes and asthma (e.g., Kotwani
2010).
Fourth, the pharmaceutical firms and their trade associations argue that price
control regulations have led to a significant loss of revenue, that the price control
regulations have been ineffective, and that better alternatives, such as bulk public
procurement, exist to make medicines more affordable and accessible (McLain
2014; Silverman 2015; IMS Health 2015).
Fifth, the Indian pharmaceutical industry is considered an extremely competitive
market with tens or hundreds of firms competing with each other in narrowly-defined
medicine markets, reflecting a thriving entrepreneurial culture and raising concerns
among many as to why price control regulations are necessary (Saberwal 2006).
The presence of price control regulations, some argue, leads to the delay in the
launch of new, patented medicines into India, exacerbating the negative conse-
quences. However, others argue that although India is a net exporter of cheap generic
medicines, many medicines are either out-of-stock or too expensive in the domestic
market (Selvaraj 2007). Also, the price control policies apply mainly to out-of-patent
medicines and a policy to control the prices of patented medicines has not been
finalized in over a decade (Francis 2016). While prior research on pharmaceutical
regulation is focused on intellectual property protection in developing countries, few
studies examine the capacity to regulate pharmaceutical markets, most of which are
out of patent protection (Pezzola and Sweet 2016; Sell 2003).
Finally, the regulator responsible for implementing the price control regulation on
essential medicines, the National Pharmaceutical Pricing Authority (NPPA) itself is
fighting a battle for relevance and survival (Francis 2014a). Some observers have
expressed concern that the government is attempting to dismantle the NPPA and
dilute price controls (Shankar 2014). The NPPA is also concerned about the poten-
tial shortages of medicines that enter price control regulations, one of the many ways
in which firms can mitigate and circumvent the regulations. For example, the NPPA
received reports of shortages of several essential medicines such as anti-malarial
1 Introduction 3
medicines and considered invoking special powers to instruct pharmaceutical firms

to produce human albumin (Nautiyal 2014, 2015a). The NPPA is also in need of
greater investment to improve monitoring and enforcement of the price control
regulations. We document the successes and failures of the NPPA in designing
and enforcing price control regulations, which can help regulators in other low- and
middle-income countries.
Many economists question the usefulness of price control regulations, as such
regulations can introduce inefficiency in the market and also allow firms to respond
in a manner that often defeats the intended purpose of the regulation. We argue that
some level of regulation is essential in these medicine markets for several reasons
unique to the Indian context. They include but not limited to: (i) the branding of
generic medicines; (ii) the cartelization of the pharmaceutical distribution system;
(iii) the use of restrictive vertical trade practices; (iv) the opposition to retail chains
and online sale of medicines; (v) the promotion of more expensive brands of a
medicine by retail pharmacies and physicians when less expensive substitutes are
available; (vi) the weaknesses in drug approval processes that lead to the introduc-
tion of irrational fixed-dose combinations; (vii) the lack of enforcement mechanisms
for ensuring transparency in pricing and profit margins of pharmaceutical firms;
(viii) and the inexplicably high variation in prices of medicines. Although some of
these issues are being addressed through the enforcement of India’s newly reformed
competition laws, these efforts have not translated into lower prices or margins.
Previous literature suggests that a decline in the scope of price controls in India in the
1990s and early 2000s increased medicine prices, sometimes surpassing prices in
Canada and the UK and that the market mechanisms at the time were ineffective in
stabilizing the prices of medicines (Mehta 2005). Prior studies also suggest that
pharmacists and hospitals in India receive substantial margins, sometimes as high as
1000%, indicating the need for regulation (e.g., Mathew 2004; Nautiyal 2015b).
Previous analyses of the 2013 price control regulation on essential medicines in
India are mostly anecdotal and conducted by activists and journalists, and often
contain far-reaching conclusions. For example, in examining the potential impact of
the 2013 price control regulation, Ray (2013) stated,
Indian consumers will undoubtedly be the biggest beneficiaries of the new DPCO [Drug
Price Control Order], as ceiling prices will now be based on roughly 91% of the pharma-
ceutical market by value, resulting in up to 20% price reduction in 60% of the NLEM
[National List of Essential Medicines] medicines. The prices of some drugs will fall by even
up to 70%.
By contrast, a study sponsored by the Organization of Pharmaceutical Producers

of India (OPPI), an association of research-based pharmaceutical firms in India,
claims that the 2013 price control regulation has little effect on access to essential
medicines compared to a matched set of unregulated medicines in the same thera-
peutic area. The study is conducted by IMS Health, whose market data on pharma-
ceutical firms formed the basis for the NPPA to fix the ceiling prices in 2013. The
study proposes alternatives to price control regulation such as taxing alcohol and
tobacco to subsidize essential medicines. As PharmaBiz.com (2015) notes:
4 1 Introduction
Some key findings of the study are[:] primary beneficiaries of the DPCO 2013 price controls
have been high-income patient populations, rather than the low-income targets; the con-
sumption of price-controlled drugs in rural areas has decreased by 7% over the past two
years, while that of non-price controlled products has risen by 5%; and the DPCO 2013 has
resulted in an increase in market concentration (fewer brands are now listed) and a decrease
in competitive intensity (the average number of new brands has gone down since 2013).
In this book, we address the need for a systematic and comprehensive analysis of
the nature and impact of the 2013 price control regulation on several essential
medicines in India. Our study is based on an analysis of the data collected by the
AIOCD, known among the industry observers in India by its product name,
Pharmatrac data. The NPPA used the IMS data in 2013 but, under criticism from
several firms and disputes arising from fixing ceiling prices using the IMS data, the
NPPA switched to the Pharmatrac data in 2015 (Francis 2014b). We exploit
Pharmatrac data to examine quantitatively the method used by the NPPA to fix
ceiling prices, and the challenges that arose in fixing them. Pharmatrac data cover the
period from January 2011 until July 2016, which makes it possible to analyze the
trends before and after the DPCO 2013. The data are disaggregated at the level of the
stock keeping unit, which allows us to compare different brands and dosages of the
same medicine as well as different medicines within the same therapeutic category.
Moreover, the data distinguish between different delivery forms of the same med-
icine, such as a tablet, injection, capsule or syrup. Such disaggregation along with
the partial nature of the regulation allows us to study the impact of the regulation by
comparing regulated and unregulated dosages of the same medicine.
The book is divided into four parts. In the first part, we provide a historical
account of the price control regulations on pharmaceuticals in India. We examine the
efforts leading up to the 2013 regulation and elaborate on the policy process that
unfolded. We also document the essential characteristics of the Indian pharmaceu-
tical industry that motivates the need for introducing price control regulation. We
illustrate, using Pharmatrac data on medicines, the extent of margins firms obtain for
essential medicines and the need for controlling them. The second part of the book
focuses on the design of the 2013 price control regulation. We examine the details of
the design and highlight the inherent challenges and shortcomings. We also study
how firms have used the slowly unfolding policy process to their advantage. The
third part of the book examines the effectiveness of these regulations. In particular,
we focus on the many ways in which pharmaceutical firms have mitigated the impact
of the regulations. We discuss, using several case studies of individual medicines, as
well as analyses of comprehensive lists of price-controlled medicines, the nature,
and extent of coverage of price regulations, their effectiveness, and impact. The
fourth part describes the nature of enforcement and compliance. In particular, we
examine the extent of compliance with price ceilings imposed on essential medicines
in India in 2013 and how it has changed in response to enforcement efforts. We
estimate how much firms overcharged above the ceiling price and the total
overcharged amount. We also reflect on whether the regulator has followed a
targeted approach to enforcement to induce compliance and whether such targeting
has had any impact on overall compliance. The book concludes in Chap. 9, which
1 Introduction 5
examines recent developments to strengthen price control regulation by expanding

the scope to include medical devices such as stents.
Overall, our analysis identifies several limitations of the design of the regulation
due to its partial nature. The exclusion of closely related substitutes and dosages of
the same medicine has weakened the effectiveness of the regulation. We also
identify limitations due to the weaknesses in the existing enforcement regime to
regulate pharmaceutical prices in India. The powers to regulate pharmaceutical
prices are distributed across different organizations, often with competing interests.
The pharmaceutical industry falls under the supervision of the Ministry of Chemicals
and Fertilizers, which, naturally, attempts to promote industry-related interests.
However, the Ministry of Health, responsible for access to healthcare and affordable
medicines does not oversee the regulation of pharmaceutical prices in India. A
proposal to consolidate the multiplicity of regulatory authorities and unify them
under a new Ministry of Pharmaceuticals exists, but strict enforcement of pharma-
ceutical price controls may not happen even after such a reorganization if there is no
clear enforcement strategy (Business Standard 2015). Chief among the reasons for
the lack of enforcement is perhaps the limited political mandate to pursue enforce-
ment vigorously. Another important limitation is that the regulator at the national
level has a limited enforcement budget of Rs. 100 million for the year 2015–2016,
minimal presence across various states in the country, and seemingly receives little
cooperation from the state drug controllers. Compounding these issues is the regu-
lator’s decision to allocate Rs. 50 million for consumer awareness schemes, such as
building mobile applications to solicit complaints from the citizens, rather than
streamlining data collection and enforcement. A third limitation is that the regulatory
authority likely underestimates the extent of the violations of price ceilings. An
internal study of the regulator shows that in January 2015, 99.4% of the medicines
sold in India are in compliance, which is at variance with our estimates of the
potential fines based on Pharmatrac data. A vital contribution of our study is to
identify the firms and markets in which the most flagrant violations of the ceiling
prices have occurred. The regulator can build on these results to focus its enforce-
ment rupees.
As our study shows, even with minimal resources, it is possible to document, to
the fullest extent, price ceiling violations in each month during the 3 years of the
implementation of price control regulations. The prices and unit sales are easy to
monitor, as they are displayed on medicine packs, and sales data are compiled
monthly in several readily available databases such as IMS Health and AIOCD
Pharmatrac. If these data are appropriate to determine the ceiling prices, surely they
must also be valid for detecting cases of overcharging. The sale of medicines through
online platforms has meant that the prices of several brands of medicines are
displayed online. Bringing in retailers, hospitals, online platforms, and dealers into
the ambit of enforcement can potentially improve compliance. The regulator cur-
rently reports the price of a regulated medicine per tablet or injection. As we will
discuss later, pharmaceutical firms are creative in their design of stock keeping units
(SKU), which makes determining whether or not a given brand of medicine is in
6 1 Introduction
violation of the price ceiling regulation challenging for the average citizen.2 The
regulator’s efforts to publish a searchable list of the SKU-specific ceiling prices
rather than per-tablet ceiling prices is a useful step, as it becomes easier for the more
than 750,000 pharmacists in the country to know whether the medicine brands they
sell are in violation of the regulations.
As noted earlier, one of the challenges in effective regulation of medicine prices
in India is the manner in which the regulatory system is currently organized. The task
of providing affordable healthcare is distributed among the ministry of health and
family welfare, the ministry of chemicals and fertilizers, which oversees the depart-
ment of pharmaceuticals, and the ministry of commerce. The administration and
regulation are distributed over the Central Drug Standards Control Organization
(CDSCO), the National Pharmaceutical Pricing Authority (NPPA), and various state
drug controllers. In recent years, there has been a vocal criticism of the manner in
which some of the regulators have operated and the Drug Technical Advisory Board
(DTAB) and proposed to rename the CDSCO as the “Indian Drug Administration,”
which would ensure a dedicated pool of qualified workforce to enforce the regula-
tions (Vijay 2017). While the book does not offer solutions to improving the
organization of the pharmaceutical regulatory system in India, it provides a context
for the debate by documenting the limitations of the current efforts to design,
implement, and enforce price control regulations in India.
References
Business Standard. (2015, December 10). Govt to create a separate ministry for pharma in one year:
Ananth Kumar, Business Standard.
Bhaskarabhatla, A. S., Chatterjee, C., Anurag, P., & Pennings, H. P. G. (2016). Mitigating
regulatory impact: The case of partial price controls on metformin in India. Health Policy and
Planning, 32(2), 194–204.
Chatterjee, P. (2013). India’s patent case victory rattles Big Pharma. Lancet, 381(9874), 1263.
Francis, P. (2014a, October 22). Patented Drugs & DPCO. PharmaBiz.com
Francis, P. (2014b, July 02). Modifying DPCO 2013. PharmaBiz.com
Francis, P. (2016, November 22). Do not dismantle NPPA. PharmaBiz.com
IMS Health. (2015), Assessing the impact of price control measures on access to medicines in India.
IMS Health India Report.
Kotwani, A. (2010). Access to essential medicines and standard treatment for chronic diseases.
Indian Journal of Pharmacology, 42(3), 127–128.
Mathew, J. C. (2004). Paswan in favor of same profit margins for branded & generic drugs.
PharmaBiz [online]. Available from http://www.pharmabiz.com/NewsDetails.aspx?
aid¼24757&sid¼2
2
An SKU is a particular brand of medicine sold by a firm for a particular delivery and dosage form.
For example, “CROCIN ADVANCE 500 MG TABLET 10” is an SKU indicating that Crocin, a
popular brand of Paracetamol manufactured by GSK, contains 500 mg of the active ingredient and
ten tablets in the pack.
References 7
Mehta, P. S. (2005). Towards a functional competition policy for India. New Delhi: Academic
Foundation.
McLain, S. (2014, July 15). India’s new drug-price controls: Unintended consequences? Wall Street
Journal.
Nautiyal, S. (2014, September 26). Human albumin serum not available across India post NPPA
price cut. PharmaBiz.com
Nautiyal, S. (2015a, March 23). NPPA may invoke para 3 of DPCO to address shortage of human
albumin. PharmaBiz.com
Nautiyal, S. (2015b, May 29). Maharashtra FDA detects 5 distributors involved in overpricing of
cardiac stents. PharmaBiz.com
Pécoul, B., Chirac, P., Trouiller, P., & Pinel, J. (1999). Access to essential drugs in poor countries:
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Pezzola, A., & Sweet, C. M. (2016). Global pharmaceutical regulation: The challenge of integration
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of-india-is-it-directionally-right-improving-access-to-medicines/
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(5), 499–501.
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ability & professionalism: Dr Jagashetty. PharmaBiz.com
Part I
Historical Context and the Motivation for
Regulation
Chapter 2
Brief History of Regulating Pharmaceutical
Prices
2.1 Introduction
In this chapter, we begin with a historical overview of India’s efforts to design a price
regulation mechanism for essential medicines and how such efforts culminated in the
latest episode of price controls in 2013. The chapter documents how India began
regulating nearly 350 medicines in 1970, steadily lowered the scope of regulation to
74 in 1995, and then expanded the number again to nearly 350 in 2013, completing
the full circle. The historical account shows how the same set of issues have arisen
during the design, implementation, and enforcement of each of the episodes of price
control regulations.
Price controls have been commonplace in India since its independence in 1947.
They were part of a broader set of ‘command-and-control’ policies that regulated
almost all areas of economic activity in the country to strengthen the economy and
promote local investment and production (Mehta 2005). Price controls on several
commodities instituted by the British before independence continued to exist even
afterward, and they were made permanent through the Essential Commodities Act of
1955. Under the act, India regulated the prices of a wide variety of products such as
petroleum and related derivatives, food grains and seeds, textiles, and fertilizers (see,
for an overview, De 2014). The regulation of medicine prices, however, did not
begin under the Essential Commodities Act. Instead, India started to control the
prices of medicines in the backdrop of the national emergency created by the
Sino-Indian war in 1962, under the 1915 Defense of India Act.
India introduced the Drugs Display of Prices Order of 1962 and the Drugs
Control of Prices Order of 1963, effectively freezing medicine prices as an emer-
gency measure. The government replaced the 1962 and 1963 drug control orders
with the Drugs Prices Display and Control of 1966. On the one hand, the 1966 order
strengthened the control regime by mandating pharmaceutical firms to obtain prior
approval from the government before increasing the prices of any medicine formu-
lation (Basak 2008; Mehta 2005). On the other hand, however, the order introduced

12 2 Brief History of Regulating Pharmaceutical Prices
exceptions to the price control regime by keeping newly developed medicines

outside the ambit of price control. By mandating that pharmaceutical firms request
an authorization to increase prices of new drugs, the government sought to manage
the upward trend of prices in the industry. What followed was a system of greater
bureaucratic control over the price control regime and myriad exceptions. India
implemented a series of price control regimes through various orders, in an attempt
to institutionalize the affordability and availability of ‘essential’ medicines.1
2.2 Deregulation of Pharmaceutical Prices from the 1970s

to the 1990s
The next revision of the order in 1970 issued under Section 3 of the 1955 Essential
Commodities Act, enabled India to control the production, distribution, and supply
of essential medicines. The government hoped that the revised order would ensure
equitable distribution and availability of essential medicines at fair prices (Joseph
2015; Government of India 1955). The 1970 DPCO allowed the government to
regulate the prices of essential bulk drugs and their formulations by restricting
excessive profiteering, which was intended to ensure greater supply, distribution,
and availability of essential drugs. As shown in Table 2.1, most bulk drugs and
their formulations sold on the market were either directly or indirectly affected by
the 1970 DPCO, indicating a shift towards increased control and protectionism in
India (Malhotra 2010). The 1970 DPCO stipulated that a company’s pre-tax profit
from its pharmaceutical activity should not exceed 15% of its pharmaceutical sales,
net of excise duty and sales tax (Mehta 2005). The 1970 order targeted only
18 bulk drugs and their formulations, while the prices of the remaining bulk
drugs were frozen. The order allocated a healthy markup of 75% on the material,
conversion and packaging costs. Also, the markup was set higher for new combi-
nations of existing drugs at 100% and new drugs at 150%. Alternatively, compa-
nies could fix prices within the ceiling of a 75% mark-up for essential drugs and
150% for other drugs, as long as their gross profit did not exceed 15% of sales
(Joseph 2015).
The 1970 DPCO represented the introduction of cost-based regulation of drug
pricing in India, which is sometimes also referred to as ‘rate-of-return’ or ‘cost-plus’
regulation. This kind of regulation targeted firms’ profit margins, limiting profit-
maximizing behavior and the abuse of market power (Cowan 2002). The govern-
ment considered cost-based regulation as a way to balance the need for controlling
drug prices while at the same time providing sufficient profits to manufacturers to
1
‘Essential drugs’ are defined as drugs that meet the priority healthcare needs of the population
(WHO 2017). Today, priority healthcare needs are established based on disease prevalence and
public health relevance, as well as clinical efficacy and safety and cost considerations.
2.2 Deregulation of Pharmaceutical Prices from the 1970s to the 1990s 13
Table 2.1 Overview of the DPCOs leading up to 2002

Number of Categories and
drugs under Market Pricing their respective
DPCO Framework regulation coverage mechanism markup/MAPE
DPCO 1970 Essential Almost all Indirectly, the Cost-based
Commodities bulk drugs and entire market
Act 1955 their
formulations
DPCO 1979 Drug Policy 347 bulk drugs 80% Cost-based Cat. I 40%
1977 and their Cat. II 55%
formulations Cat. III 100%
DPCO 1987 Drug Policy 142 bulk drugs 60% Cost-based Cat. I 75%
1986 and their Cat. II 100%
formulations
DPCO 1995 Drug Policy 74 bulk drugs ~40% at the Cost-based Cat. I 100%
1994 and their time of
formulations implementation
DPCO 2004 Pharmaceutical 34 bulk drugs ~20% Cost-based Cat. I 100%
(proposed but Policy 2002 and their
not formulations
implemented)
incentivize production (Mehta 2005). Consequently, the 1970 order involved direct
control on the profits of pharmaceutical firms and indirect control on the prices of
18 essential medicines and capping of the remaining medicines at their prevailing
price. The product-wise margins under the 1970 DPCO were flexible, and compa-
nies had the freedom to set the prices of their products without the approval of the
government as long as their overall profit margin did not exceed the stipulated norm.
However, the cost-based approach to pricing had some downsides. In particular,
determining actual costs as opposed to claimed costs proved to be a difficult task for
the regulatory authorities. Until the establishment of the National Pharmaceutical
Pricing Authority (NPPA) in 1997, there was no dedicated regulatory authority to
monitor the market activity and enforce pharmaceutical price controls. The Drug
Controllers at the state-level monitored the prices in addition to shouldering a range
of other responsibilities. Moreover, since imported products were priced based on
their landing costs, the policy made room for loopholes on imported products and
indirectly encouraged the sale of relatively more expensive medicines produced in
foreign countries (Malhotra 2010).
Following the ‘command-and-control’ policies of the 1970s, the government
appointed the Hathi Committee to find ways to make India self-sufficient in produc-
ing medicines (Joseph 2015). The government asked the committee to analyze the
pharmaceutical industry and make recommendations for the rapid growth of the
small-scale sector, high-quality production of drugs, lowering of prices, and equita-
ble distribution of basic medicines. The committee’s final report promoted the
wholesale nationalization of the pharmaceutical industry, the introduction of a list of

essential medicines, the creation of a national drug administration authority, and the
use of generic names for single-ingredient drugs, among others (Government of
India 1975). Although the pharmaceutical industry strongly opposed a number of
these recommendations, the report remained the basis for the new framework for
placing drugs under price control for the next few decades (Malhotra 2010).
The 1970 Indian Patents Act enabled the domestic pharmaceutical industry to
become self-sufficient (Malhotra 2010). Under the Indian Patents Act, substances
used in food and pharmaceuticals could not be granted product patents but could
obtain process patents for 5 years from the date of the grant of the patent (Mehta
2005). The Act played an important role in promoting the Indian pharmaceutical
industry, as several domestic firms began to produce several bulk drugs and formu-
lations at a lower cost. The government aimed to create opportunities for smaller,
local firms, and to rely less on imports of medicines. The growth of the domestic
industry also helped turn the country into an exporter of high-quality, affordable
generic drugs over the next decades (KPMG 2006). However, despite the growth in
the number of small-scale manufacturers, large pharmaceutical firms continue to sell
more expensive branded versions of generic medicines. Industry leaders, character-
ized by their strong marketing power, often engage in promotional competition
rather than price competition and nudge doctors to prescribe brand names rather
than cost-effective generic medicines (Blech 2006; Medico Friends Circle 2006).
Although the Hathi Committee recommended generic prescribing as a means to
increasing availability and affordability of essential drugs, the industry remains
opposed to the concept of generic prescribing and continues to fight against it
even today.2 The pharmaceutical industry was opposed to price regulation and
pushed for liberalization. The 1979 DPCO incorporated some of Hathi Committee
recommendations, but many were either excluded or not implemented.
The 1979 DPCO decreased the number of regulated drugs, but the mark-ups on
certain drugs were lower than in the previous version of the DPCO. The 1979 order
classified medicines into three categories and restricted markups at 40, 55 and 100%
respectively3 (Government of India 1979). Meanwhile, it was still mandatory for
both pharmaceutical manufacturers and importers to obtain approval from the
government before introducing a new formulation, dosage, or pack size. Moreover,
in 1979, the prices of bulk drugs used in the production of essential medicines were
also placed under price control (Government of India 1979). Anecdotal evidence
shows that firms responded to the 1979 DPCO by exiting from the regulated
markets, causing an ‘artificial’ shortage of essential medicines in the country (Bal
1986a, b, p. 1029):
2
The idea of generic prescribing was once again recommended by the Sen Committee in 2005, but it
was not implemented (Malhotra 2010).
3
The 1979 DPCO defined markup as the sum of distribution costs, outward freight, manufacturer's
margin, promotional expenses and trade commissions, calculated as a percentage value of the cost
of production (Government of India 1979).
2.2 Deregulation of Pharmaceutical Prices from the 1970s to the 1990s 15
The pharmaceutical industry reacted to the DPCO of 1979 in peculiar ways. The production
of category I and II drugs started falling markedly while the production of categories III and
IV drugs showed an upward rise. The production of drugs in category I dropped from 4.5
percent in 1978 to 3.6 percent in 1980 and that of drugs in category II from 16.7 percent in
1978 to 13.2 percent in 1980. However, in the case of drugs in category III the production
increased from 67.1 percent in 1978 to 68.6 percent in 1980. Thus an artificial scarcity of
essential drugs was being created.
The regulators in India attributed the shortage of essential medicines to inade-

quate incentives for pharmaceutical firms and decided to adopt a policy of steady
deregulation. The government appointed the Kelkar Committee to provide further
recommendations for the revision of the drug policy. In 1984, the committee
established the need for liberalizing the strict profitability curbs that seemingly
affected the industry’s growth. The Drug Policy of 1986, entitled ‘Measures for
Rationalization, Quality Control and Growth of Drugs and Pharmaceuticals Industry
in India,’ therefore represented a clear regulatory shift away from protectionism. The
revised 1987 DPCO reduced the category of drugs under price control to two and
increased the margins for both. The margins or Maximum Allowed Post-
manufacturing Expenses (MAPE) grew from 40 to 75% for Category I drugs and
from 55 to 100% for Category II drugs (Government of India 1987).4 More impor-
tantly, the number of price-controlled medicines dropped from 347 to 142 in 1987,
as shown in Table 2.1.
In the mid-1980s, India started introducing measures towards industrial liberal-
ization across all sectors of the economy, including the pharmaceutical industry.
Liberalization continued in the 1990s, in part influenced by the international context
and in part driven by industry pressures.5 Consequently, the drug policy of 1994 and
the 1995 DPCO were introduced in an era of economic liberalization, abolishment of
industrial licensing, and reduction of barriers to foreign direct investment (FDI)
(Government of India 2012). Despite the drop in drug prices throughout the 1970s
resulting from the introduction of price control and the modified patents regime,
prices started rising again when the price control regime became weaker in the
mid-1980s (Rane 1996).
The 1995 DPCO classified medicines into scheduled and unscheduled categories
and capped the MAPE for formulation drugs at 100% for all indigenously
4
The term ‘Maximum Allowed Post-manufacturing Expenses’ (MAPE) replaced the concept of
‘mark-up’ in the 1987 DPCO to incorporate all costs incurred after production, as well as trade
margins (Government of India 1987).
5
The Uruguay Round of Multilateral Trade Negotiations concluded in 1994, establishing the World
Trade Organization (WTO). The Organization aims to facilitate the free flow of goods and services
across nations and to promote multilateral negotiations for further liberalization of trade (WTO
2017). One of the principal agreements that were signed by all members of the WTO in 1994 was
the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), requiring
member states to provide a set of minimum standards of protection of intellectual property rights,
including patent protection for pharmaceuticals (WTO 1994). Developing countries such as India
that had previously abolished product patents were given several years to change their patent
regime. Consequently, India became compliant with the agreement in 2005 (Malhotra 2010).
manufactured formulations of the medicines in the scheduled category (Government

of India 1995). The medicines that were deemed to be not sufficiently competitive
were kept under the ambit of price control. They included medicines markets with
an annual turnover (sales) of Rs. 10–40 million and featuring a dominant firm
accounting for over 90% of the market share or medicine markets with more than
Rs. 40 million annual sales and featuring a small number of firms or firm with 10%
market share for single formulators (Selvaraj 2007). As such, the number of medi-
cines under regulation fell from 142 to 74, meaning that approximately 40% of
the market was covered by the DPCO (see Table 2.1). However, the share of the
pharmaceutical industry under regulation continued to decline over the years, as the
number of bulk drugs and their formulations continued to grow and the pharmaceu-
tical policy moved further towards deregulation. As a result, while 25% of the
market was covered by the DPCO in 2006, only 12% was covered in 2010 (Malhotra
2010).6 Moreover, according to civil society organizations such as LOCOST (2006),
the drop in the number of price-controlled medicines in the revised DPCO resulted in
the exclusion of important medicines related to anemia, diarrhea, cancer, tuberculo-
sis, hypertension, and diabetes from the list of price-controlled medicines. Although
the regulators and industry leaders argued that removing price controls would lead to
lower prices through stronger competition among manufacturers, evidence showed
that the prices of decontrolled medicines increased, sometimes by more than ten
percent (Selvaraj 2007).
2.3 The Demand More Price Controls After 2002 Leading

to the 2013 DPCO
2.3.1 2002–2003: The Bangalore High Court Ruling
and the Supreme Court Order
The shift from protectionism to liberalization in the Indian pharmaceutical industry

reached its high point in February 2002, when the Ministry of Chemicals and
Fertilizers announced a new pharmaceutical pricing policy (see for timeline, Table
2.2). The new pricing policy aimed to open the market to foreign investment and to
reduce the number of price-controlled drugs from 76 in 1995 to 38 (Mehta 2005).7 In
response, several healthcare activists argued that, over time, price controls on
medicines would completely disappear if the 2002 policy is implemented (LOCOST
6
According to Selvaraj (2007), the 2006 DPCO affected only ten percent of the drug market in
2007. According to Malhotra (2010), the 74 drugs that were on the 1995 DPCO represented less
than 15% of the medicines defined as ‘essential’ by the new NLEM (Malhotra 2010).
7
The number of price-controlled drugs reduced to 74 in 1997. Meanwhile, the list for the 2002
DPCO initially covered 38 drugs but was later reduced to 34 drugs.
2.3 The Demand More Price Controls After 2002 Leading to the 2013 DPCO 17
Table 2.2 Chronology of events

Date Event
February Government announces the draft 2002 Pharmaceutical Policy. The number of
2002 bulk drugs under price regulation are reduced from 74 (under DPCO 1995) to 34
November Civil society groups file a Public Interest Litigation against the government’s
2002 policy, and the Karnataka High Court (HC) issues stay order on the policy,
ultimately marking it as unconstitutional
March 2003 The government denounces the HC ruling and takes the matter to the Supreme
Court of India (SC). The SC also stays the implementation of the 2002 National
Pharmaceutical Policy and directs the government to bring all essential medicines
under price regulation
August 2004 The Ministry of Chemicals and Fertilizers constitutes the Sandhu Committee to
review the span of price control and to suggest reasonable trade margins on the
sale of drugs
November The Sandhu Committee’s preliminary recommendations are to lower trade
2004 margins and to implement an intensive monitoring system for all essential drugs
that are not under price control. It also suggests that the span of price controls
should not be increased. The committee did not reach conclusions on the issue of
criteria
November The Prime Minister’s Office constitutes the Sen Committee to explore options
2004 other than price control for achieving the objective of making available
life-saving drugs at reasonable prices
September The final Sen Committee Report states that active government intervention is
2005 necessary for the pharmaceutical industry and recommends price cap regulation
of formulations
December The government releases the draft 2006 Pharmaceutical Policy (Part A) without
2005 the section on price regulation
August 2006 The government constitutes a Joint Review Committee comprising of three
government representatives and fourteen industry representatives to look into the
matter of price regulation (i.e., Part B of the policy)
November The joint review committee submits its report, but the government and industry
2006 fail to reach a consensus on price regulation
November The Minister-in-charge announces a self-regulation initiative of the industry to
2006 reduce the price of 886 medicines
February The government forms the Pharma Advisory Committee with 160 members to
2006 look into the issue of pricing
January 2007 The draft Pharmaceutical Policy is referred to an Empowered Group of Ministers
August 2007 The voluntary self-regulation initiative fails. Companies are found to be
overcharging on medicines
October The draft 2011 National Pharmaceutical Pricing Policy is released for public
2011 comments but receives heavy criticism from key stakeholders
September The Supreme Court gives a final opportunity to the Group of Ministers to submit
2012 their report
November The Group of Minister recommends ceiling price based regulation of
2012 formulations
December The 2012 Pharmaceutical Policy is announced by the government
2012
2006). Moreover, they argued that the medicines under regulation were increasingly
older formulations and were increasingly becoming ‘irrelevant.’ Alarmed by the
challenges posed by fading price controls on access to medicines for poor con-
sumers, civil society organizations such as the All India Drug Action Network
(AIDAN) brought the matter to the Karnataka (Bangalore) High Court (Basak
2008).8 Under the proposed pharmaceutical policy of 2002, the sales of medicines
(that is, the moving annual turnover value) became an essential criterion for deter-
mining the ceiling price of bulk drugs. The idea was to identify markets for bulk
drugs of mass consumption, which did not feature sufficient levels of competition to
lower prices (Government of India 2002). Therefore, the concerns raised by citizen
groups in the Public Interest Litigation (PIL) against the government’s policy were
that price controls were determined based on sales rather than the volume of sales,
thereby putting in danger the availability and affordability of essential drugs
(Mathew 2002). Moreover, according to Amit Sen Gupta, the co-convener of Jan
Swasthya Abhiyan, a network of healthcare organizations, the drug pricing policy
was not contingent on the country’s health policy, the availability of healthcare, or
the prevalence of diseases. Medicine such as quinine and primaquinine, used to
battle malaria, were not under price control, while analgin (also known as
Metamizole), a drug banned in many countries since the 1970s, was listed as
essential (Narrain 2004).
Concerned by the rising prices of life-saving medicines, the Karnataka High
Court granted a stay order for the new Pharmaceutical Policy on November
12, 2002, compelling the government to stop implementing the policy (Ray
2013).9 By August 2002, the High Court lifted the stay order on all aspects of the
policy such as those concerning pharmaceutical R&D, the changes to the regulatory
infrastructure and education, except for the part concerning the pricing of drugs
(Mathew 2002). After further analysis, a 2002 High Court verdict challenged the
validity of the policy, terming it (Mathew 2003a): “arbitrary and unreasonable and
violative of relevant provisions of Essential Commodities Act, 1955 and Article
14 and 21 of the Constitutions only to the extent of the price control mechanism
adopted in the policy to determine drugs under price control.” Opposing the High
Court decision, the government took the case to the Supreme Court of India. On
March 10, 2003, the Supreme Court reversed the Karnataka High Court’s stay order
on the 2002 Pharmaceutical Policy but stipulated that the Government “shall con-
sider and formulate appropriate criteria for ensuring essential and life-saving drugs
not to fall out of price control” (Nair 2006).
The Supreme Court judgment directed the Department of Chemicals and Fertil-
izers to revise its policy and to revise the list of drugs that were considered essential
and life-saving by May 2003 (Arthapedia 2015). However, this led to some
8
The All India Drug Action Network (AIDAN), the Medico Friends Circle (MFC), the Low Cost
Standard Therapeutics (LOCOST) and the Jan Swasthya Sahyog filed the petition (Narrain 2004).
9
‘Life-saving’ drugs are defined as drugs that are used in life-threatening situations or for emer-
gency care (The Sen Committee 2005).
confusion, as the government had accepted to revise its list of essential medicines,
but not the entire policy (Mathew 2003b). Nonetheless, following further Supreme
Court directives, the Department of Chemicals and Fertilizers drafted a revised list of
essential medicines, which included 354 essential drugs that satisfied the country’s
priority healthcare needs (Arthapedia 2015b; Government of India 2003). They
became part of the first National List of Essential Medicines (NLEM) in 2003,
overriding the previous National Essential Drugs List in 1996. The drug pricing
policy remained a matter of debate among different sections of the government,
which had opposing views on the scope of drug price controls. The Ministry of
Health and Family Welfare and the Ministry of Chemicals and Fertilizers preferred
to bring all medicines listed in the NLEM under the price control regime, while the
Prime Minister’s office and the Planning Commission sought alternatives to the
expansion of price controls (Malhotra 2010). Over the years, various committees
were therefore constituted to look into the issue of price controls and search for
options other than price controls.
This episode marked the beginning of a protracted series of debates surrounding
the design of price control regulation. Several stakeholders such as associations of
the pharmaceutical firms lobbied for a reduction in the number of medicines under
price control while the government sought to ensure the affordability of life-saving
drugs. The pharmaceutical firms argued that reducing the number of drugs under
price control would increase competition and therefore lower drug prices. However,
a closer look at drug prices throughout the 1980s, 1990s and early 2000s showed that
this was not the case (Rane 1996; Selvaraj 2007). Brand leaders were often price
leaders, maintaining prices that were not affordable for poor consumers (Narrain
2004). Throughout this period of debate, the 1994 Pharmaceutical Policy remained
the principal mechanism for price controls on medicines.
2.3.2 2004–2005: Investigating Ways to Make Life-Saving

Drugs Available at Reasonable Prices (the Sandhu
Committee and the Pronab Sen Committee Reports)
In the wake of the Supreme Court’s March 2003 order, several committees were
constituted to make recommendations for a revised pharmaceutical policy that could
satisfy the expectations of the various interest groups involved in the debate sur-
rounding price controls. The process began with the revision of the NLEM in 2003,
based on the World Health Organization’s Model List of Essential Medicines. The
committee responsible for drafting the list used the following criteria: (i) the priority
health care needs of the Indian population; (ii) the country’s prevailing diseases; (iii)
safety and efficacy; (iv) comparative cost-effectiveness; and (v) infrastructure for
delivery (Government of India 2003). However, the pharmaceutical policy covered
only a small fraction of the medicines included in the NLEM, which did not keep
pace with the dynamics of public health (Malhotra 2010). Civil society organizations
stressed the importance of making essential drugs available to the broader public at
affordable prices. Particularly, India struggled with managing disease burdens for
HIV/AIDS, diabetes, and cardiovascular problems but their medications remained
outside the price control regime (LOCOST 2006).10 The discussion on drug pricing
also gained momentum following changes to the patent regime in India in 2005.
India introduced product patents on the 1st of January 2005, to meet the international
commitments made during the Uruguay Round of Multilateral Trade Negotiations.
The prevailing patents regime established by the 1970 Patents Act had enabled India
to grow as a producer of generic medicines on the strength of process patents.
Beginning in 2005, India was expected to continue to benefit from the production
of generics, but the freedom to reverse-engineer newer molecules was hindered (The
Sen Committee Report 2005). The shift in the patent regime generated concerns of
price increases and shortages of affordable drugs.
Consequently, in August 2004, the Ministry of Chemicals and Fertilizers set up a
new committee under the chairmanship of G. S. Sandhu. The committee was asked
to review the span of price control and to suggest reasonable trade margins on the
sale of drugs, in light of the Supreme Court order and continued public debate on the
issue of drug pricing. After consulting with the industry representatives, NGOs,
health activists and field experts, the Sandhu Committee concluded that the current
framework for price control was ineffective and endorsed a new monitoring system.
The committee’s interim report came out as early as November 2004 and made many
recommendations, but could not make any conclusions on the issue of criteria for
price controls. The findings of the report contained several observations relevant for
price regulation (Mathew 2004a):
1. The NLEM 2003 was determined to be a comprehensive list of essential and life-
saving drugs, which may form a basket of drugs suitable for price management
(through price control and price monitoring);
2. Price control should be limited for ease of administration, improved availability
and to avoid adverse effects on the growth of the pharmaceutical industry;
3. Two types of monitoring should exist (i) intensive monitoring for the 339 essential
drugs that were in the 2003 NLEM but not under price control; and (ii) regular
monitoring for price-controlled drugs and drugs outside the NLEM basket. A
10–15% annual price increase would apply to the drugs under price control
regulation (Mathew 2004a);
4. Trade margins should be capped at 8–16% for wholesalers and retailers respec-
tively. Meanwhile, the margins for non-scheduled drugs are restricted to 10% for
10
LOCOST (2006) argues that many essential drugs were systematically deregulated leading up to
the 2002 Pharmaceutical Policy, while many non-essential or sometimes dangerous medications
remained under price control (for an overview, see Table 1, p. 135). The organization emphasizes
the downfalls of using only economic criteria, such as company turnover in the 1995 DPCO, to
establish what drugs should be regulated. Until 2002, economic criteria dominated essentiality of
medicines, contrary to what the Kelkar Committee recommended in 1984. Therefore, the debate
surrounding price control included discussions around the principles of selection for price-
controlled drugs (The Sen Committee 2005).
wholesalers and 20% for retailers for branded drugs, and 15 and 35% respectively
for generic drugs. The NPPA is expected to implement the rules on trade
margins11;
5. The NPPA should also interact more with State Drug Controllers, consumer
organizations, NGOs and industry organizations to facilitate enforcement and
compliance;
6. The government should increase public awareness about the Drug Policy and the
prices fixed by the NPPA to strengthen consumer movement and keep a check on
high prices;
7. Other recommendations included: negotiations at the time of launching a new
patented drug, higher health insurance coverage, dedicated schemes for people
below the poverty line, decreased taxes and levies on drugs in the NLEM, the use
of an open-tender approach for the procurement of drugs (similar to the Rajasthan
Model of Medicare Societies), compounding of offenses arising from the viola-
tion of price controls, the creation of DPCO State Cells for better enforcement and
the development of a pharmaceutical price index to monitor the movement of
prices.
The recommendations concerning trade margins came as a solution to the high-
profit margins that existed for control-free drugs. For example, some medicines
enjoyed a trade margin of 500–2000% for generic medicines (Mathew 2004b). In
fact, generics were sold at almost the same price as branded drugs in India, and the
huge margins were being passed on to the trade by pharmaceutical companies
through high sales volumes (Francis 2005). The Minister for Chemicals and Fertil-
izers did not entirely agree with having different margins for branded and generics
medicines since he considered that manufacturing costs should be the same. How-
ever, he supported the idea that the NPPA should play a more significant role in the
price control of all drugs (Mathew 2004b). Although the proposed caps on trade
margins of scheduled and non-scheduled formulations were to be implemented
through the Drugs (Prices Control) Amendment Order 2004 in December 2004,
the Ministry of Chemicals and Fertilizers received objections from the Prime
Minister's office, the Law Ministry and from the industry and trade sectors and
could not enact these changes (Mathew 2005a).12 In the meantime, the Prime
Minister’s Office had initiated a different task force under the chairmanship of
Pronab Sen to consider alternatives to price control (The Sen Committee 2005).
Furthermore, some of the recommendations of the Sandhu Committee were ambig-
uous regarding their impact on the consumer. For example, the annual allowance of
10–15% price increase on these same drugs would lead to a price that would double
every few years (Malhotra 2010). The NPPA’s level of staffing was also a significant
problem for implementing the recommended monitoring system involving
11
Trade margins (i.e., profits) should not be confused with ‘markups’ or the ‘MAPE,’ which cover
all costs incurred after production, as well as margins.
12
The following year, trade margins of 200–300% were proposed for the retail price of generics and
were found more agreeable by the industry and trade sectors (Francis 2006, 2016).
339 drugs outside the ambit of price control. Such a system would have faced
significant problems with effective monitoring and with ensuring compliance.
In November 2004, the Prime Minister’s office constituted the Sen Committee
under the chairmanship of Pronab Sen, who was the Principal Advisor at the
Planning Commission, to explore options other than price control to make life-
saving drugs available at reasonable prices. The committee met with industry
representatives, international agencies, health professionals, NGOs and academics
and concluded in September 2005 that “the pharmaceutical industry by its very
nature is non-competitive, and requires active public intervention to ensure compet-
itive outcomes” (The Sen Committee 2005, p. 19). The final report included the
following proposals (Alexander 2007; The Sen Committee 2005):
1. Price controls should only apply to formulations and not to bulk drugs or other
upstream products
2. Price controls should not be based on company turnover, but on the essentiality of
the drug
3. The effect of price control on the entire therapeutic class should be considered
4. Price ceilings should be implemented, and companies can place themselves
anywhere below the cap—price ceilings should rise according to the Wholesale
Price Index (WPI) for manufactured goods
5. A stronger central drug supervisory and regulatory system should be created—it
should include the various regulatory bodies that already exist, including the
NPPA, and it should support state-level regulatory bodies (the creation of DPCO
state cells is also mentioned)
6. NLEM 2003 should form the basis of drugs for price control and monitoring
7. Public procurement and distribution of drugs through the public health system
should mainly be for generics
8. Low-volume, high-priced drugs (e.g., for HIV/AIDS) should be exempted from
excise duty, customs duty, and other levies, and this benefit should be transferred
to the consumer
9. The government should improve public awareness and educate people about the
scope and extent of the Drug Policy
The Sen Committee, in accordance with its mandate, recommended a switch from
a cost-based pricing system to a reference pricing system (Mathew 2005b): The
committee note that “no effort should be made to impose a uniform price, and only a
ceiling price should be indicated” (The Sen Committee 2005, p. 4). The reference
price for existing essential drugs would be the price quoted in bulk procurement by
the government or other agencies and the reference price for new drugs would be the
average price of the top three selling products by value in the therapeutic category. In
case there are less than three brands in the respective market, the average of all
existing medicines would be taken, and if no reference price were found domesti-
cally, the lowest price in the world would be established as a reference (The Sen
Committee 2005). Companies could address the Price Negotiations Committee to
examine the ceiling price based on superior therapeutic cost-effectiveness and all
patented drugs, and their formulations would have to go through mandatory price
negotiations before receiving market approval (Malhotra 2010). However, the com-
mittee noted the risk of pharmaceutical firms “circumventing price controls is
extremely easy through non-standard combinations, strengths, and other such inno-
vations. Also, there is a tendency for prescriptions to move away from controlled
drugs to non-controlled drugs in the same therapeutic class. The consequence of the
quality of treatment is not known, but it is almost certain that the consumers end up
buying higher priced products” (The Sen Committee 2005, p. 28). Consequently, the
task force recommended coverage of all formulations of the same drug under the
new ceiling price regime and price monitoring of all therapeutic substitutes. It also
took note of high prices of branded generics and suggested de-branding of generic
drugs. Several concerns were raised by both the industry and NGOs concerning
some of the recommendations put forth by the Sen Committee (Mathew 2005c).
First, both sides expressed worry about the de-branding of generic drugs, feeling that
brand names have a value for assuring the quality of products. They also disagreed
with the committee’s suggestions to define reference prices based on the institutional
prices quoted by the companies in public procurement process, fearing that either
quality or quantity may be compromised. Lastly, both groups agreed that there
should be less or zero taxation on drugs, and the NGOs advocated for a system of
trade margins based on medicines prices.
The Prime Minister’s task force made some important advancements in the
discussion around price controls. Although other committees were constituted
throughout this period to shed light on the debate surrounding the drug policy
(e.g., the National Manufacturing Competitiveness Council, the National Commis-
sion on Macroeconomics and Health, the Standing Committee on Chemicals and
Fertilizers), the Sandhu and Sen Committees contributed most to the debate and
consequent revisions of the pharmaceutical policy (Malhotra 2010). The proposals
made by the two committees finally led to the Draft 2006 Pharmaceutical Policy and
spurred discussions on ways to make the policy more impactful. The reports of the
committees included some common points, namely, the need to make regulation
more visible to the public, the acknowledgement of the NLEM as a comprehensive
list of essential medicines that could serve as the basis for price control and
monitoring, price negotiations on new patented drugs, the necessity of DPCO
State Cells and the strengthening of the NPPA’s role as a central drug regulatory
body. Also, the Sandhu Committee attempted to bring down trade margins on all
essential medicines, since consumers were burdening high margins. The Sen Com-
mittee Report highlighted the outdated nature of the cost-based system of drug price
control and suggested a reference pricing system. The discussion brought by the
latter also emphasized the need to regulate drugs based on essentiality and not
economic criteria. Some of these recommendations, such as restrictions on trade
margin restrictions, were not readily implementable due to opposition from the trade
and industry lobbies. For example, the Sen Committee recommended a 50% markup
to make up for the proposed trade margins and distribution costs, but industry leaders
felt that without a 300–400% markup they would not be able to survive (Mathew
2005d). However, evidence shows that at that time, trade margins for wholesalers
ranged from 2 to 12.4% and from 15 to 43.7% for retailers in other developed
countries (Malhotra 2010). The government also considered the recommendation to
strengthen the NPPA and reviewed its overall structure and working pattern and
resolved to develop proper IT infrastructure that would enable the NPPA to interact
with other drug regulatory authorities efficiently. The government also planned to
devote more funds to the NPPA’s infrastructure, increase its staff, and demand
greater accountability (Mathew 2005e).
2.3.3 2006–2012: From 2006 to the 2012 National

Pharmaceutical Pricing Policy
Based on the recommendations of the Sandhu and Sen Committees, the Department
of Chemicals and Fertilizers published Part A of a draft of the 2006 Pharmaceutical
Policy on December 28, 2005. However, the government did not release the section
on price regulation, referred to as Part B. Part A of the draft served as a blueprint for
future directions and included some provisions regarding drug pricing, such as
mandatory price negotiations of patented drugs before granting marketing approval
(Malhotra 2010). The government decided to take the full list of essential medicines
included in the NLEM as the entire list of medicines for price regulation and split the
354 drugs into five categories. The rationale was to create a ‘multi-dimensional’
system of price regulation by following different types of pricing regulation and
monitoring systems for different categories of drugs (Mathew 2005f). The govern-
ment hoped that through the inclusion of all drugs under the NLEM under some
form of price scrutiny, the new policy would circumvent the Supreme Court’s
supervision.
Under the proposed policy, only the medicines in the first category were subject
to cost-based price control. These medicines were identified following the same
criteria used in the National Pharmaceutical Policy of 2002 while using revised data
and accounting for inflation to determine the drugs. This process resulted in about
35 medicines to be included in the first category. The policy included another
39 medicines, generally sold at low prices, in a category named ‘hospital supply
medicines.’ This category would only be subject to price monitoring but not price
control. Another category consisted of 42 medicines for life-threatening diseases like
cancer and HIV/AIDS, which would be made affordable through public-private
partnerships and special access arrangements. The prices of all medicines that
would not be monitored, that is, the medicines that did not fall under the category
or ‘hospital supply,’ were frozen until ceiling prices or trade margins could be
calculated based on a new price control framework contained in the undisclosed

Part B.
According to the Pharmaceutical Policy of 2005, the ceiling prices would be
calculated based on the weighted average of the Maximum Retail Price (MRP) of the
top three producers of the drug by value and volume (Mathew 2005f). As we will
discuss in greater detail subsequently throughout the book, the price to the retailer
(PTR) rather than MRP became the basis for determining the ceiling price eventu-
ally. However, experts warned that if the government wanted to satisfy both the
Supreme Court and the industry, it would have to restrict the application of the new
policy only to the specific strengths of the drugs mentioned in the NLEM and not to
all formulations of the same drugs (Mathew 2006). That meant that industry and
trade representatives wanted the essential drugs list to be scrutinized on purely
NLEM terms, that is, regulate the strengths mentioned in the NLEM, but leave all
other strengths and formulations unregulated.
In August 2006, the government formed the Joint Review Committee composed
of three government representatives and fourteen industry representatives to formu-
late Part B of the Pharmaceutical Policy. The review committee report states,
“Industry feels that all 354 drugs and their formulations under NLEM 2003 need
not be subjected to price control. There are several categories of these drugs whose
prices are reasonable, or these may not directly affect the consumer, or the drugs are
critical but the number of manufacturers is too few, or the drugs are subsidized
through public health programmes. These can be excluded from price control and
placed under the prevailing price monitoring system, i.e., no increase beyond 20%
per annum” (PharmaBiz 2006b). On the other hand, members of the government
desired to keep open the possibility of cost-based pricing. Following the delibera-
tions of the Joint Review Committee, the Pharma Advisory Forum comprised of
160 members was created. The forum included stakeholders such as chemist asso-
ciations, consumer representatives, state drug controllers, the Drugs Controller
General of India, the NPPA, pharmaceutical associations, central and state health
ministry officials and representatives from the Ministry of Chemicals and Fertilizers.
Industry associations protested that the forum leaned too much in favor of the
regulator and the ministry.
Following the formation of the Advisory Forum, industry associations proposed
voluntary self-regulation. In line with this initiative, 11 pharmaceutical companies
agreed to reduce the price of 886 medicines by October 1st, 2006 (Malhotra 2010).
According to the Ministry of Chemicals and Fertilizers, the list of medicines
included a wide range of therapeutic categories and several commonly used
medicines like analgesics, cough syrups, tonics and drugs meant to treat infectious
diseases, bronchial disorders and antibiotics, as well as antihypertensives, derma-
tological medicines, eye drops, disinfectants, gastrointestinal medicines and
anti-diabetic medicines (PharmaBiz 2006a). Self-regulation by industry can,
under certain conditions, result in increased social welfare (Maxwell et al. 2000;
Toffel and Short 2011). However, a closer study by Malhotra (2010, p. 121)
highlighted the following: “The 886 items included a pregnancy test card, 7 Ayur-
vedic medicines, at least 31 forms of iron, vitamins, or other nutritional supple-
ments. Notwithstanding the positive role the preceding items play in healthcare, it
is argued that these items could not be viewed as (allopathic) formulations. It was
found that from the 886 items, only 134 or 15.1% were listed in CIMS9 (July–
October 2007), Drug Today (October–December 2007), or IDR (November 2007–
January 2008).” Naturally, the 752 drugs not listed on the three reference books
were likely to have insignificant sales since doctors did not usually prescribe items
that were excluded from these reference books. Moreover, out of the 134 drugs that
were listed, 103 items had a price higher than the agreed price, 16 had a lower
price, nine had a price lower than or equal to the agreed price in at least one out of
the three reference books, and only six had a reduced price in all three reference
books (Malhotra 2010). Further investigation illustrated that out of the 134 drugs;
an important proportion was not widely available in all states. Therefore, despite
widely publicized price reductions, many of the 886 formulations were either not
accessible or sold at higher prices.
After further revisions, the Group of Ministers began deliberating on the draft
Pharmaceutical Policy 2006 in January 2007. The draft policy remained with the
group for several years until 2011 when the National Pharmaceutical Pricing Policy
2011 (NPPP 2011) became available for public comments in October 2011 (Joseph
2015). News reports indicated that heightened lobbying efforts by the industry
delayed the deliberations, creating differences of opinion among the ministries
(PharmaQuest 2009). The 2011 NLEM and the recommendations of the Sen Com-
mittee 2005 became the basis for NPPP 2011 (Government of India 2011a, b). The
Group of Ministers recommended a market-based approach to drug pricing, as was
advocated by the Sen Committee in 2005. It also overruled the Health Ministry’s
proposal to set the ceiling price as the average of the three lowest priced medicines
and suggested to fix the ceiling price according to the average price of the top three
selling brands (of single-ingredient formulations) by value (Joseph 2015). Addition-
ally, the draft policy excluded essential medicines with price less than Rs. 3 per tablet
from price regulation.
Several stakeholders criticized the government’s new draft pharmaceutical pol-
icy. The draft, described as a ‘flawed’ document, was once again taken to the
Supreme Court by the All India Drug Action Network (AIDAN), an independent
network of NGOs (Ray 2012a). AIDAN argued against the market-based pricing
methodology calculated as the weighted average price of the top three brands and
appealed for the cost-based pricing approach as a way to contain high prices.
Furthermore, AIDAN criticized the lack of control mechanisms to prevent manu-
facturers from avoiding price control by modifying their formulations. Global
policy actors such as the WHO also disagreed with the proposed mechanism to
fix the ceiling price based on the top three selling brands, stating that the policy was
“virtually topping off the price of top brands” (Economic Times 2011). Other
experts condemned the exclusion of certain medicines and the formulation-level

control (Selvaraj et al. 2012; Selvaraj and Farooqui 2012). The pharmaceutical
industry was in favor of a market-based method for price regulation but advocated
against increasing the span of regulation. Moreover, industry associations refused to
accept the possible mitigation of the adverse impact of price control caused by the
partial regulation of formulations. The Indian Pharmaceutical Alliance maintained
that partial regulation would not necessarily benefit pharmaceutical firms, as “price
control of specified strength will affect all strengths of the drug. You can’t price a
10 mg drug disproportionately to a 5 mg strength under price control” (The Hindu
Business Line 2007). The industry associations also expressed their disappointment
with the proposed method: “the decision to reach retail prices based on a simple
average is very damaging to the industry, and our profit margins will erode
considerably” (The Hindu Business Line 2007).
In September 2012, the Supreme Court gave a final opportunity to the Group of
Ministers to communicate its decision (Rajagopal 2012). It was clear that the Group
of Ministers had the difficult task of putting in place a robust pharmaceutical pricing
policy that could satisfy both the consumers and the industry, as well as reconciling
short-term interests with long-term goals and concerns (Arthapedia 2015; Ray
2012b). The government revised the draft policy, following the criticisms from
several key stakeholders. The final version of the policy document was notified in
December 2012 and formed the blueprint for the 2013 DPCO. The mechanism for
fixing the ceiling price was modified to incorporate the mean price of all brands with
more than one percent market share. It also withdrew the proposed exclusion of
medicines based on medicine prices. The NPPP regulated formulations only, based
on essentiality criteria as specified under the 2011 NLEM (Government of India
2012). Although the NLEM contains 348 drugs with various dosages and strengths,
formulations based on a combination of these drugs can potentially be subject to
price regulation. The government also decided to use the market-based pricing
approach to fixing ceiling prices.
2.3.4 Amendments After the Implementation of the 2013

DPCO Regulation
The Department of Pharmaceuticals notified the government’s decision to imple-

ment the price control regulation in December 2012 and published the revised DPCO
on May 15th, 2013, authorizing the NPPA to regulate the prices of all 348 medicines
on the NLEM corresponding to 652 formulations under 27 therapeutic categories.
The DPCO received little support from stakeholders, regardless of their views on
price regulation. Multinational firms were worried that price controls would diminish
their margins to the degree that would not permit them to launch new medicines and
to maintain their sales in existing markets. The domestic pharmaceutical industry
and the retail trade associations portrayed the DPCO as unnecessary and argued that
the industry did not need regulation, as it remained competitive (Nautiyal 2013).
Moreover, both the activist judiciary that called for legislative action and the NGOs
that lobbied for price regulation described the new DPCO as inadequate and
ineffective (Times of India 2015). The order, therefore, prompted a patchwork of
amendments.
In May 2014, the NPPA notified new guidelines, highlighting that certain
legislative clauses gave it wider powers to control drug prices (Kamath 2014).
Under paragraph 19 of the 2013 DPCO, the NPPA could monitor and, if necessary,
regulate prices of drugs currently not under price control regulation, but considered
essential. Soon afterward, in July 2014, the NPPA announced that 108 new anti-
diabetic and cardiovascular drugs would be added to the list of controlled formu-
lations, in addition to the 348 existing ones (NPPA 2014). The NPPA felt that
although these medicines differed from similar price-controlled medicines regard-
ing binders, fillers, dyes, preservatives, coating agents and dissolution agents, they
did not differ in their therapeutic value. However, the order was revoked by
September 2014 due to non-compliance and discontent from pharmaceutical firms
and directives from the government. Although the order was revoked, the potential
for expanded price control pushed the pharmaceutical industry to file lawsuits
(Kamath 2014).
The 2013 DPCO, in theory, has several advantages over the 1995 DPCO. The
1995 DPCO used a cost-based method of controlling medicine prices but collecting
cost information proved to be difficult for regulators. By contrast, the market-based
approach adopted in the 2013 DPCO allows for determining the ceiling price based
on the prevailing prices in the market. The price ceiling regulation is also consid-
ered better than cost-based regulation as price ceilings preserve the incentives for
completion on prices. The 2013 DPCO also allows for a continuous revision of the
price cap, which again preserves the incentive to improve production efficiency
(Cowan 2002). Also, the 2013 DPCO contained support for research and develop-
ment (R&D) by exempting new drugs from price control for five years (Kumar et al.
2014), a step necessitated by India’s implementation India’s introduction of phar-
maceutical product patents in 2005. The patent regime in 2013 was different from
the one in 1995 when only process patents were allowed. This shift gave more
strength to MNCs, which had been discouraged by India’s previous protectionist
policies (KPMG 2006). However, this also resulted in a different kind of lobbying
power. Although Kumar et al. (2014) state that the 1995 DPCO was a ‘win-win’
situation for manufacturers, since the government could not fix prices, and that the
2013 DPCO addressed this problem in favor of the consumer, the analysis that is
presented in the following chapters shows that pharmaceutical firms found ways to
avoid regulation or mitigate its impact.
References 29
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Chapter 3
Is the 2013 Price Control Regulation
Necessary?
3.1 Introduction
In this chapter, we address whether pharmaceutical price control regulations, intro-

duced in India in the 1970s when the domestic pharmaceutical industry was still in
its infancy, are relevant today. India is currently among the largest exporters of
generic, low-cost pharmaceuticals to countries around the world. Also, other coun-
tries such as China have removed price caps regulations on low-cost medicines due
to rising concerns about the declining quality and shortages of regulated medicines
(Burkitt 2014). We complement the historical account of the policy process detailed
in the previous chapter resulting in the 2013 DPCO regulation with a quantitative
approach in this chapter. In particular, we use Pharmatrac data to examining whether
pharmaceutical markets in India are competitive and whether greater competition is
sufficient to ensure lower prices in these markets. Our goal here is neither to
advocate a greater role for market forces nor call for government intervention in
general, and we refer the readers to other studies for such discussions (e.g., Datta-
Chaudhuri 2000). We envisage a limited role for reasonable regulations in the Indian
pharmaceutical industry, given its unique characteristics.
3.2 Pharmaceuticals Are Credence Goods with High Search

Costs
We begin by describing the idiosyncratic features of the pharmaceutical industry that

affect the intensity of competition and prices in medicine markets. First, medicines
are different from other goods we purchase. In many industries, the products can be
characterized as search goods, as their utility and quality can be assessed before
purchase. For example, automobiles, houses, clothing, and groceries are some
examples of search goods. By contrast, the pharmaceutical industry is an excellent

34 3 Is the 2013 Price Control Regulation Necessary?
example of a market for experience and credence goods. Unlike search goods, the
consumers of credence and experience goods find it difficult to assess beforehand,
and sometimes even after the purchase, the quality and utility of the products. The
customers in pharmaceutical markets cannot judge the quality or utility of medicines
and rely on the medical advice of their physician (Zeithaml 1981). Further compli-
cating the nature of transactions in pharmaceutical markets is how the demand for
these goods is generated and what role physicians and pharmacists play in complet-
ing these transactions. While the doctor chooses the drug and writes a prescription,
the customer pays for it, typically out of pocket in India, which causes the demand
for pharmaceuticals to be driven by prescriptions of doctors rather than well-
informed decisions made by the final consumers. If the doctor acts as a perfect
agent of the patient by making choices that the patient would have made in the
absence of any information asymmetry, then there is little cause for concern.
However, when the interests of physicians and pharmacists differ from those of
the patients, then competition alone cannot guarantee lower prices. Such situations
can lead to supplier-induced demand, a phenomenon by which the customer buys
more of a good at a higher price than she would if she were fully informed. As a
result, customers may end up buying more expensive substitutes and bundles of
medicines, which leads to a loss of social welfare (Evans 1974).
In many countries, the presence of large institutional buyers such as health
insurance companies and expert intermediaries such as public health agencies
safeguards the interests of the patient. However, in a country such as India where
the insurance coverage is negligible, and patients pay out of pocket for purchasing
medicines, pharmaceuticals become more of a credence good than in other countries.
If the physicians and pharmacists receive a percentage of the profits from the sale
of medicines, then they have an incentive to promote the demand for higher-priced
medicines, which yield higher profits in absolute terms, at the expense of lower-
priced substitutes. As we will argue later, the cartelization of pharmacies in India,
and the nexus between the physicians’ clinics and pharmacies that adjoin them, the
aggressive promotional practices of the pharmaceutical firms, and the unethical
division of profits along the pharmaceutical distribution value chain suggest that
the presence of a large number of brands of a medicine at the country-level does not
necessarily translate to lower prices at the neighborhood pharmacy.
Second, the consumption of goods in general and medicines, in particular,
involves switching costs. Switching costs pose an added challenge to the customers
in pharmaceutical markets, and can potentially undermine the competitiveness
of an industry. Switching costs are the costs incurred by the consumer as a result
of switching brands, suppliers, or products (Porter 1980). Burnham et al. (2003)
developed a typology of switching costs that identifies three types. First, procedural
switching costs include all costs related to potential economic risk, evaluation and
learning time and setup costs. Second, financial switching costs involve all costs that
can be expressed in monetary value, including potential benefits and losses. Third,
relational switching costs include all costs related to psychological or emotional
discomfort due to the loss of identity and the ending of relationships. Burnham et al.
(2003) suggest that all forms of switching costs significantly influence customer
3.2 Pharmaceuticals Are Credence Goods with High Search Costs 35
loyalty. Switching costs are associated with higher profits for incumbents (Beggs
and Klemperer 1992), less elastic or inelastic demand (Farrell and Shapiro 1988),
and increased barriers to entry for a supplier and higher strategic advantages for
incumbents (Karakaya 1989). Switching costs are not necessarily financial but
include “search costs, transaction costs, learning costs, loyal customer discounts,
customer habit, emotional cost and cognitive effort, coupled with financial, social,
and psychological risk on the part of the buyer” (Fornell 1992: 10).
Since the purchase of medicines involves the patient, the physician, and the
pharmacist, there are switching costs for all three parties. Prior research has explored
the extent to which intra-molecular, and inter-molecular substitution takes place in
the pharmaceutical industry.1 Ellison et al. (1997) find that demand for both intra-
and intermolecular substitutes is price elastic. However, inter-molecular substitutes
are more price elastic compared to intra-molecular substitutes. This means that
doctors are more likely to prescribe a different brand of the same molecule than a
completely different molecule when they prescribe a new medicine to a patient. The
fact that there is some price elasticity in demand for medication leaves some space
for competitive forces on the demand side to incentivize producers to become more
productive and to lower their prices. However, these competitive forces are hindered
when physicians allocate little effort in gathering information about brands of
medicines. Since the physician is the only one judging the information on all
available drugs and their relative prices, she should invest in getting to know all
options available (e.g., Steele 1962; Walker 1971; Temin 1980; Ellison et al. 1997).
The drug prescription decision is formed by learning effects of patients and the
doctor that prescribes it (Ellison et al. 1997). This shows that information is not a
universal good in the pharmaceutical industry and that demand is shaped by personal
experiences of both the patient and the doctor.
Physician brand loyalty plays a key role when it comes to switching costs in the
pharmaceutical industry. Pharmaceutical firms try to generate physician loyalty to
maintain their market share. Waheed et al. (2011) found that the donation of tangible
rewards from pharmaceuticals to physicians leads to higher prescription loyalty.
Also, professional values of pharmaceutical sales representatives promote prescrip-
tion loyalty; that is, recommendations of the drug by major doctors at seminars are
strongly related to the high prescription loyalty of attending physicians. The brand
value appears not to be related to prescription loyalty. These findings point to the
prevalence of switching costs in the pharmaceutical industry. In a country such as
India, where generic medicines are sold under different brand names, and pure
generics account for a small fraction of the overall sales, physician brand loyalty is
stronger than in other countries, leading to higher switching costs. Overall, the
presence of switching costs can severely hinder the competitive functioning of
markets.
1
Intra-molecule research focuses on substitutability of different molecules for the same therapeutic
therapy, inter-molecule research focuses on substitutability amongst drugs that contain the same
molecule, but differ in brand, strength, pack size and price
To deepen the discussion on the competitiveness of the Indian pharmaceutical

markets, we elaborate on how the pharmaceutical distribution is organized and
governed. Laws regulating pharmacies in India are derived from the Drugs and
Cosmetics Act (1940) and the Drugs and Cosmetics Rules (1945). The former
regulates the import, manufacturing and distribution process of drugs in India, and
the latter contains provisions for classifications of drugs and guidelines for the
storage, sales, and prescriptions. These laws are implemented under the supervision
of the Central Drug Standard Control Organization (CDSCO). However, this orga-
nization is understaffed, and it has been severely criticized for approving unsafe
bundles or cocktails of medicines, which serve as expensive substitutes (Evans and
Pollock 2015). The Indian government has pushed the pharmaceutical sector to
de-brand generic medicines, which can intensify price competitive (PharmaBiz.
com 2017). Recall that the Hathi committee’s final report recommended the use of
generic names for single-ingredient drugs, among others (Government of India
1975). However, pharmaceutical firms with a high brand value benefit from the
increased switching costs due to brand loyalty and are therefore have strongly
opposed such moves over the last four decades. Also, while the government has
encouraged pharmacies to stock more generics, pharmacies have an interest in
pushing the branded drugs, which yield higher trade margins. The government has
also encouraged the physicians to be aware of the available generic options. How-
ever, physicians remain brand-loyal and rarely write prescriptions containing generic
medicines names. Substitutability of branded drugs and generics becomes lower
when doctors are unaware of the chemical compositions of drugs they prescribe,
leading to higher switching costs among brands and medicines. Another problem is
that the poor quality of prescriptions written by hand by many physicians, which are
difficult to read. Since the patient is unaware of his prescription, he ends up buying
expensive branded drugs that are given to him by the pharmacists. The Indian
government as well as the Medical Council of India (MCI) have discussed guidelines
ranging from the quality of prescriptions to the issue of debranding and stimulating
the supply of generics. The government has also introduced a program called Jan
Aushadi under which entrepreneurs can setup medicine shops exclusively for the
sale of generic medicines. However, overall there has been little change in the
functioning of the pharmaceutical markets in India since the formation of the
union of retailers, the All India Organization of Chemists and Druggists (AIOCD),
in 1975, which operates as a cartel. With branded drugs dominating the Indian
industry, firms can still differentiate their otherwise homogeneous product from
competitors. As a result, prices become more dispersed, varying with the familiarity
of brands, and become more expensive for patients.
In summary, the idiosyncratic features of the pharmaceutical industry in general
and in India, in particular, hinder competitive forces for three reasons. First, chem-
ically identical substitutes might not be regarded as substitutes by physicians.
Second, the production and prescription of generic medicines lag behind the sale
of branded medicines, which severely hinders price competition. Third, physician
brand loyalty increases switching costs, especially when pharmaceutical firms offer
tangible rewards to the physician and the pharmacist.
3.3 Choice and Competition Are Limited in Local Pharmaceutical Markets in India 37
3.3 Choice and Competition Are Limited in Local

Pharmaceutical Markets in India
So far, we argued, largely based on the theory of credence goods and search costs,
that pharmaceutical markets in India are not necessarily competitive. While, in
theory, it is a possibility, it may not necessarily be the reality of the Indian medicine
markets. In fact, the general impression among many is that the Indian pharmaceu-
tical industry, featuring a large number of firms in any given medicine market, is
highly competitive and the prices of medicines in India are among the lowest in the
world. If it is true, then there is no necessity for imposing price ceilings on essential
medicines in India. Before we examine the design, implementation, and impact
of the 2013 DPCO legislation, we address questions about the necessity of 2013
regulation briefly. Our purpose here is not to argue that price controls are per se good
or bad. Instead, we want to highlight some of the reasons advanced by various
patient interest groups before the Supreme Court of India and various committees
appointed by the government to convince them that price regulation is still neces-
sary. We do so by reviewing the recent literature on the pricing and availability of
medicines in India as well as on pharmaceutical marketing and prescription prac-
tices. We will complement the review of the literature in this section with a more
quantitative approach in the next section.
We document several reasons for regulating the prices of essential medicines in
India. First, in many medicine markets, greater choice and perceived competition at
the national level does not necessarily lead to greater choice, lower prices, or greater
availability in a local market. Sharma and Kaplan (2016) study the pricing and
availability of insulin in the state of Delhi, which is also the capital city of India and
is noted for its relatively efficient public-sector procurement system for medicines.
Although 16 domestic brands and 87 foreign brands manufacture human insulin
in India, in a survey of 40 pharmacy outlets in Delhi, the 40 IU/ml human insulin,
considered essential under the 2013 DPCO, is available in its soluble version in only
47.5% of the outlets, in the isophane version in only 25%, and in the biphasic
isophane version in 67.5%. The availability of analog insulin versions is lower in the
range of 2.5–25%. The availability of 100 IU/ml human insulin, not considered
essential and hence not regulated, is even lower in the range of 5–12.5%. Sharma and
Kaplan (2016) find that the median consumer price of 40 IU/ml human insulin per
10 ml is 2.39 times and that of 100 IU/ml strength is 2.62 times compared to the
public-sector procurement price in Delhi. In other words, the presence of more than
100 brands of insulin, a medicine on which a large number of chronically ill diabetes
patients rely for daily usage, is often unavailable and competition at the local level is
severely limited.
Second, in India, out-of-patent medicines are sold under brand names. Also, the
prices of such “branded” generic medicines are several times higher than their cost of
production. Srinivasan (1999) compares the market price of 61 medicines obtained
from the October 1998 issue of the Monthly Index of Medical Specialties (MIMS,
India) with the lowest prices quoted in the public-sector procurement process in the
Indian state of Tamilnadu in August 1998 for equivalent formulations and packag-
ing. In all but one case, the public-sector procurement price, used as a proxy for
the marginal cost of production, is several times higher than the market price of
substitute brands. In 15 cases, the market price of a competing brand is more than ten
times the public-sector procurement price. In particular, Torrent set a market price
of 1190, more than 52 times the public-sector procurement price of 22.60, for
100 tablets of Albendazole 400 mg. German Remedies set a market price 43 times
the procurement price for Bisacodyl 5 mg and Sun Pharma charged 40 times the
procurement price for Alprazolam 0.5 mg tablets. Phadke and Srinivasan (2013)
repeat the analysis for nine medicines and find that the market leader’s price in each
case is more than ten times the public-sector procurement price in Tamilnadu. For
example, the market leader’s price for Atorvastatin 10 mg is 50 times Domperidone
10 mg is 40 times the public procurement price.
Third, compounding the problem of high prices of branded medicines is the
role of pharmaceutical marketing, pharmacists, and doctors. In India, physicians
prescribe certain brands rather than their underlying formulation (Nalinakanthi
2014). Miller and Catherine (2016) conduct a systematic review of the literature
and find that pharmacists in many low- and middle-income Asian countries employ
profit-maximizing strategies that are linked to poor dispensing practices. Kamat and
Nichter (1998) study the role played by pharmacists in Mumbai, the financial capital
of India. They interview 75 pharmacy owners and managers, 35 medical represen-
tatives who market medicines to pharmacists and doctors, and 150 randomly-
selected customers. Their analysis indicates that medicine wholesalers and medical
representatives incentivize pharmacists to substitute brands prescribed by the doctor
for other brands with higher margins. In their sample, 72% of the pharmacists
recommend substitutes when a prescribed brand is not available, and 34% of the
customers accept their recommendations. Gillian and Grills (2016) conduct a sys-
tematic review of the literature on the role of doctors and pharmacists in the misuse
of medications. In their analysis of 115 articles, they find that in some cases doctors
pursue profit motive and prescribe higher cost medication while pharmacists follow
the doctors’ lead (see, also, Kotwani et al. 2010; Kotwani et al. 2012). Analysis of
prescriptions written by doctors in India reveals that in more than 96% of the cases,
doctors prescribe brand names instead of the generic ingredient names, limiting the
choice to the consumer (Patel et al. 2005). Seeberg (2012) studies pharmacies in a
relatively underdeveloped state of India, Odisha, and finds similar conclusions.
Since pharmacists receive a proportion of the price of medicine as revenue, they
are incentivized to sell more expensive substitutes when low-priced alternatives
exist, limiting competition in pharmaceutical markets in India.
Gulhati (2004), an editor of the Monthly Index of Medical Specialties, the most
widely used reference guide for doctors in India, provides several examples of how
doctors are persuaded by pharmaceutical firms to prescribe medicines to increase
their private incentives and profit margins for the pharmaceutical firms and pharma-
cists: (i) in most cases of chlamydial genital infection, doctors in India prescribe the
higher priced ofloxacin at Rs. 100, as opposed to tetracycline at Rs. 14 or doxycy-
cline at Rs. 28; (ii) doctors in India prefer pantoprazole at Rs. 6 per tablet as opposed
3.3 Choice and Competition Are Limited in Local Pharmaceutical Markets in India 39
to omeprazole at Rs. 2 per tablet although many clinical trials indicate that there is
little difference in efficacy; and (iii) similarly, doctors in India prescribe perindopril
at Rs. 9.4 per tablet as opposed to enalapril at Rs. 1 per tablet. Although these are
examples from 2004, there is no reason to believe that the nature of relationships
between the doctors, pharmacists, and pharmaceutical firms has changed subse-
quently. Recent cases of pricing of medical devices indicate that hospitals have
also begun collaborating with these players in administering more expensive sub-
stitutes. As Gulhati (2004) notes, if prescribers and producers collaborate to take
advantage of consumers’ vulnerability, the state must intervene. In its report on the
pricing or medicines and trade margins, the Pant Committee noted that the pharma-
cists and other traders in the retail chain promote higher-priced medicines (Pant et al.
2016, p. 27):
The trader gets bargaining leverage and when he is able to sell at the printed MRP
[maximum resale price], he gets a higher trade margin. Higher MRP therefore provides an
incentive to the retailer to sell those brands which have higher MRP printed on them. The
patient is always at the receiving end. He cannot decide the bargaining level and most of the
times he is guided by the printed MRP. Thus high MRP’s is a tool to cheat the helpless
consumer.
In a letter stating its opposition to calls for limiting high trade margins, the
Organization of Pharmaceutical Producers of India argued against the possibility
to substitute between different brands of a generic drug formulation until generic
drugs are debranded. Incidentally, the OPPI stated in the same letter that it is
opposed to the debranding of single-ingredient medicines as well. The OPPI stated
(Pant et al. 2016, p. 67):
OPPI feels that it is the doctor who best understands the needs of patients. Doctors take
decisions on the brand to be prescribed based on their experience and conviction on quality
of certain manufacturers and the varying ability of patients to pay for better quality. It is the
Doctor who is solely responsible for the medical outcome of his/her patient, and there must
be no move that compromises the Doctor’s ability to decide on a prescription. Substitution at
a chemist level may bring in competition on all aspects other than science and quality. This
can also lead to potential anti-competitive vertical arrangements between retailers and
manufacturers to push sales. Substituting medicines of one brand by other brand or by the
generic will result in the decision-making process shifting from well-qualified professionals
like doctors and physicians to sales staff in the chemists/pharmacy shops. Many of such
pharmacies do not have qualified pharmacist on the premises.
The use of marketing practices to influence the prescription behavior of doctors

and pharmacists is another contributing factor, limiting the competition (Oldani
2004). Joelving (2015) investigates the role of pharmaceutical sales representatives
in India generating prescriptions by organizing health camps. Those who visit the
health camp for a checkup have little choice but to purchase the specific brand of
medicine produced by the sponsors of the health camp. Joelving (2015) notes that
the practice creates new customers and allows companies to influence prescription
patterns. Also, the sales representatives sometimes perform the tests on patients
themselves at the health camps, and the practice is common among not only
domestic firms in India but also prevalent among the Indian subsidiaries of major
pharmaceutical companies such as Abbott, Bayer, GlaxoSmithKline, Roche, and

Sanofi. The Organization of Pharmaceutical Producers of India (OPPI), of which
these companies are members, responded to Joelving’s article by noting that they
have little control over how the health camps are conducted, indicating lack of
accountability in marketing practices (Smetacek 2016).
Fourth, the distribution of pharmaceuticals in India is cartelized, which severely
limits competition among pharmacists and incentivizes pharmaceutical firms to
increase margins for retailers, pushing the prices of medicines higher
(Bhaskarabhatla et al. 2017). The retailers of medicines in India are organized as a
powerful union, the All India Organization of Chemists and Druggists (AIOCD),
and they are found to be operating as a downstream cartel by the Competition
Commission of India. The primary objective of the AIOCD is to maintain a 30%
vertical trade margin. As a part of their activities, the AIOCD regulates the entry of
pharmaceutical firms into district markets. As a result, even when more than a
hundred different brands of Paracetamol tablets are sold in India, at any given
medical store, only a small number of brands are available. Our data do not
disaggregate sales by district, and we cannot document the limited nature of com-
petition quantitatively locally. The absence of third-party agencies such as insurance
companies who can bargain with pharmaceutical companies and pharmacies further
contributes to the inability of consumers to limit prices or exercise choice.
Finally, there is evidence to suggest that hospitals have played an unhelpful role
in lowering the cost of medicines. For example, for many drugs and devices
administered in hospitals, studies find that hospitals charge exorbitantly high mar-
gins. In a study conducted by the Maharashtra Food and Drug Administration,
hospitals in Mumbai routinely charged prices two to three times the wholesale
price. Nautiyal (2014a) notes:
Patients were being forced to pay double or even triple the price for medical devices at
hospitals. As most of these are not available in the open market, patients can’t check prices
and are held hostage by the hospitals, which force them to buy at the price they quote.
However, experts also opine that having an MRP has not prevented profiteering in
medicines, with the MRP being fixed high enough to accommodate commissions since
there is no limit on what the MRP can be. Moreover, while MRP is mandatory on everything
manufactured in India, many devices are imported and escape this stipulation. In most
hospitals, if two devices are more or less equal, the choice of which one is used depends
on which fetches the hospital a bigger cut.
Nautiyal (2014b) reports that hospitals in collusion with wholesalers are

profiteering from the sale of drugs and medical devices at hospitals:
Over 80 medical devices under disposables category which fall under the respiratory
emergency care segment are not available at retail drug stores as of today. Sources in the
healthcare industry have revealed that the practice of selling these products to stockists and
they in turn selling the products to hospitals at high prices and at high margin is prevalent for
some time now. It has also been found that hospitals have been taking advantage of this
situation as patients have no idea about either the cost or the use of such devices. Simple
devices like oxygen mask, IV cannula and infusion therapy products are priced as high as
10–30 times more when it reaches the point of care.
3.4 Evidence Indicates Leading Brands Are Also the Price Leaders 41
In summary, at each level in the Indian pharmaceutical industry, starting from

manufacturing down to dispensing of medicines, there is an incentive to inflate the
profit margin in such a manner that the maximum resale price is several times the cost
of production. While prior studies such as Sharma and Kaplan (2016) and Phadke and
Srinivasan (2013) illustrate the nature of this problem comparing the market prices
with those of the public-sector procurement price, a more systematic and compre-
hensive analysis is required to document the nature and extent of the problem.
3.4 Evidence Indicates Leading Brands Are Also the Price

Leaders
We use the AIOCD’s Pharmatrac data to investigate whether the prices of medicines
in India are relatively higher compared to their costs of production. Naturally, in the
absence of data on firm-specific costs disaggregated by individual medicines, we
cannot conduct a definitive test of the proposition. Nonetheless, we will examine
several aspects of the medicine markets that are revealing and consistent with the
proposition. While previous analyses of the arguments involved anecdotes of select
medicines, our approach is to document the reasons more comprehensively for a
broad selection of medicines. We do so by examining wholesale and retail prices for
the first batch of 150 medicines for whom the NPPA fixed the ceiling price on June
14, 2013. We will refer to these medicines as the “June 14, 2013 List” for the rest of
the book. These medicines include tablets, injections, and syrups.
At the outset, we acknowledge that the imposition of price controls may have
both positive and negative effects. For example, both multinational and domestic
firms may exit medicine markets because of insufficient profit margins in regulated
medicine markets. Domestic firms may shift production of the regulated medicines,
leading to shortages. Similarly, innovator firms may delay the launch of newly
patented medicines due to price ceilings. Although the DPCO has exemptions for
newly invented medicines, we agree that multinational firms may be discouraged by
the presence of regulations such as price controls and the burden associated com-
plying with them.
We begin by examining price variation among the top-selling medicines in India.
We show in Table 3.1 the lowest-priced and the highest-priced SKUs of each of the
top eight medicines in their tablet form. We compute the ratio of the highest price to
the lowest price and report it in the last column of Table 3.1. The price of a 5 mg
tablet of Atorvastatin ranges from Rs. 0.9 to Rs. 10.87, indicating that the highest
price is 12 times higher than the lowest price. Similarly, in the market for Cefixime
50 mg tablets, the highest price is five-time the lowest price. The number ranges
from 5 to 120, indicating significantly large price dispersion in these markets. One
may argue that the presence of price dispersion is not necessarily a sign of lack of
competition. Instead, if SKUs with lower prices have larger market shares, then the
presence of a few SKUs with relatively large prices is not a cause for concern.
Table 3.1 Variation in prices within medicine markets

Medicine High priced SKU Price Low priced SKU Price Factora
Atorvastatin Azerva 5 mg tablet 10 108.70 Genxvast 5 mg tablet 10 9 12
Cefixime Safix 50 mg tablet 10 99 Zim 50 mg tablet 10 19.05 5
Ranitidine Consec 150 mg tablet 10 109 Ranitidine 150 mg tablet 10 2.56 43
Rosuvastatin Rosuchol 5 mg tablet 10 160.62 Rosuson 5 mg tablet 10 15 11
Telmisartan Micardis 40 mg tablet 10 386 Telgard 40 mg tablet 10 15.97 24
Azithromycin Vicon 500 mg tablet 3 240.95 Woazicin 500 mg tablet 3 25 10
Cefpodoxime Cedopil 100 mg tablet 10 483.47 Ceflus 100 mg tablet 10 42.26 11
Pantoprazole Pentagon 40 mg tablet 10 600 Pantonir 40 mg tablet 10 5 120
Source: AIOCD Pharmatrac (2011–2015)
a
Factor is defined as the price of highest-priced sku/price of lowest-priced sku
We examine whether firms that lead the market in terms of pricing, charging the
highest price, also have the largest market share. We present in Table 3.2 the top-ten
drugs in terms of sales value, sold in India from January 2011 until June 2016. We
report total sales during this period in the second column and the weighted average
price in column 3. The weighted average price of Atorvastatin is Rs. 6.41. The
market leader charges Rs. 7.71, higher than the weighted average price, and has a
market share of 14.1%. The weighted average price of the top five is Rs. 6.74 firms
and they account for 57.9% of the market share. By contrast, the next five firms
account for 22.9% of the market share at a weighted average price of Rs. 6.14. The
top five firms account for more than half of the market share across these medicine
markets and consistently charge higher prices. Moreover, in seven out of ten sub-
groups, the market leader charges a price higher than the weighted average price that
is charged by all firms in the market. This table clearly indicates that firms with
higher market shares charge higher prices. However, this correlation might be
explained by other factors, and must, therefore, be further analyzed. For example,
differences in quality are often invoked to explain such vast differences in pricing
and market shares of the firms operating in these markets. Nonetheless, prior studies
find that the Indian pharmaceutical markets do not exhibit the kind of differences in
quality that justify such large differences in prices.
Much of the differences in prices result from differences in the underlying trade
margins. Singal et al. (2011) examine trade margins for five commonly used medicines,
alprazolam, cetirizine, ciprofloxacin, fluoxetine, and lansoprazole, all manufactured in
multiple versions by the same company. In particular, they distinguish branded and
branded-generic SKUs of the same medicine manufactured by the same company. For
example, Alerid and Cetcip are the branded and branded-generic versions of Cetirizine
10 mg, both manufactured by Cipla. The markup for the retailer for the branded
medicine is 30% and 1016% for the branded-generic. One obvious concern is whether
the quality of medicines between the two versions is different even if they are
manufactured by the same company. Singal et al. (2011) conduct a quality test for
each pair of branded and branded-generic medicines and find that both versions of the
five medicines are “within their permissible range for all the quantitative and qualitative
parameters as prescribed in Indian Pharmacopoeia.”
Table 3.2 Top ten medicines sold in India by sales
Market
Sales Weighted leader’s Market leader’s Weighted average Market share Weighted average Market share
Medicine (billion) average price price share (%) price of top 5 of top 5 price of next 5 of next 5
Atorvastatin 41.8 6.41 7.71 14.1 6.74 57.9 6.14 22.9
Cefixime 33.7 12.45 10.66 19.7 11.64 54.8 10.59 20.0
Ranitidine 25.2 0.66 0.59 34.9 0.78 98.1 0.61 1.8
Pantoprazole 23.8 8.38 8.88 30.5 7.79 86.4 6.31 5.7
Rosuvastatin 23.5 11.23 11.80 26.2 11.95 59.9 10.53 19.4
Telmisartan 22.9 6.95 7.92 30.9 6.63 54.3 6.18 19.7
Cefpodoxime 22.1 18.65 14.22 14.4 19.09 53.7 17.45 17.5
Azithromycin 22.1 25.14 29.73 24.2 26.91 57.0 22.45 15.8
Cefuroxime 20.2 57.06 87.13 34.2 56.44 66.4 26.91 11.0
Metroprolol 18.7 2.89 3.27 23.7 3.58 51.7 2.75 19.5
3.4 Evidence Indicates Leading Brands Are Also the Price Leaders
Source: AIOCD Pharmatrac (2011–2015)

Notes: Medicine sales are in rupees. Price is weighted by sales to obtain the weighted average price. Market leader is the leading firm in each market with the
largest market share. Market leader’s price is the average price charged by the market leader and market leader’s share is the average market share of the market
leader
43
We now restrict our analysis to price-controlled medicines and examine the

whether leading brands of medicines among the June 14, 2013 List are also the
price leaders. The suggested pattern hints at an indirect test of whether the prices in a
medicine market are relatively high and whether the markets are functioning com-
petitively. In particular, we argue that if the brands with the largest market share also
happen to be the brands with the highest prices, then either the consumers remain
brand-loyal despite being well-informed about the alternatives or the consumers rely
on the judgments of their physicians and pharmacists. Although the presence
of switching costs can cause consumers to remain brand-loyal when lower-priced
alternatives exist, the discussion in the earlier section concerning the prescription
behavior of the doctors and the dispensing behavior of the pharmacists suggests
that the consumers of medicines in India have limited choice in practice and that
pharmaceutical firms have considerable market power.
Using the AIOCD data, we examine the pricing strategies for 66 tablet medicines
on the “June 14, 2013, List.” We limit our analysis to tablets as comparing the
relative prices across multiple brands of tablets is relatively straightforward com-
pared injection or syrup brands. In particular, we analyze the prices of the top three
SKUs of each medicine in terms of their market share from the beginning of our
dataset in January 2011 until the public notification of the list of regulated medicines
in December 2012. The results of the analysis are presented in Table 3.3. The names
of the medicines are reported in column 1, the top three SKUs are reported in column
2, and their corresponding market shares are reported in column 3. The average price
of the SKU during the 2 years is reported in column 4. The number in column 5 is
obtained by dividing SKU price by the average of the minimum price during this
period. The number in column 5 is generally above one, indicating that the prices
charged by market leaders are several times more than the minimum price prevailing
in the market. For example, in the case of Acyclovir 200 mg tablets, the leading
brand with 40% market share charges Rs. 6.13 per tablet, which is 3.87 times higher
than the minimum price per tablet in the market. Similarly, the brand with the second
highest market share of 21% charges Rs. 6.53, which is more than four times the
minimum price in the market. The top three brands of Acyclovir 200 mg tablets
account for more than three-fourths of the market share, and each one of them
charges a price that is a multiple of the minimum price in the market. While two of
the three top SKUs of Aciclovir 200 mg, involve a time-release tablet and the third is
a five-tablet pack rather than the usual ten-tablet pack, these factors do not appear to
explain their relatively higher prices. The next four tablets on the list, Amiodarone,
Amitriptyline, Atenolol, and Atorvastatin involve top three SKUs with an identical
number of immediate-release tablets, but their prices are several times higher than
the minimum in the market. Collectively, the medicines in Table 3.3 account for
44% of the “June 14, 2013, List” and support the argument that price leaders and also
market leaders.
In column 6 of Table 3.3, we list the retail trade margin, calculated as the percent
increase in maximum retail price (MRP) relative to price to the retailer (PTR). The
trade margin is around 26%, indicating the incentive for wholesalers and retailers
to push these medicines and pharmaceutical sales representatives to market these
Table 3.3 Pricing strategies of market leaders in 66 tablets regulated under DPCO 2013 and
ceiling prices fixed on 14 June 2013
Price/
Medicine SKU Share Price Min Price Margin
Acyclovir tablets 200 mg Acivir 200 mg tablet Dt 10 40.51 6.13 3.87 26.85
Zovirax 200 mg tablet 5 21.82 6.53 4.12 27.34
Ocuvir 200 mg tablet Dt 10 16.29 4.7 2.97 26.9
Amiodarone tablets 100 mg Cordarone 100 mg 82.43 6.44 5.26 27.34
tablet 10
Amiodar 100 mg tablet 10 4.8 6.06 4.95 26.11
Amipace 100 mg tablet 10 3.36 4.96 4.05 27.35
Amiodarone tablets 200 mg Cordarone X 200 mg 82.76 12.83 2.03 26.87
tablet 10
Amiodar 200 mg tablet 10 4.45 11.62 1.83 26.94
Amipace 200 mg tablet 10 3.59 9.92 1.57 27.34
Amitriptyline tablets 25 mg Tryptomer 25 mg tablet 10 72.05 2.55 2.45 27.42
Eliwel 25 mg tablet 10 7.87 2.74 2.64 26.44
Amitone 25 mg tablet 10 5.67 1.46 1.4 26.8
Atenolol tablets 100MG Aten 100 mg tablet 14 37.51 3.91 4.09 26.2
Tenormin 100 mg tablet 14 30.82 4.05 4.24 27.34
Tenolol 100 mg tablet 14 13.09 3.05 3.19 27.33
Atorvastatin tablets 5 mg Atorva 5 mg tablet 10 17.35 2.79 4.06 26.71
Storvas 5 mg tablet 10 16.31 4.94 7.2 29.43
Aztor 5 mg tablet 10 14.85 3.7 5.38 26.83
Azathioprine tablets 50 mg Azoran 50 mg tablet 10 83.53 8.17 2.09 27.12
Zymurine 50 mg tablet 10 7.42 6.14 1.57 28.72
Imuran 50 mg tablet 25 3.64 14.08 3.6 26.14
Azithromycin tablets 500 mg Azithral 500 mg tablet 3 25.81 23.68 10.25 27.34
Azee 500 mg tablet 3 10.51 18.06 7.82 27.33
Zathrin 500 mg tablet 3 4.5 15.81 6.84 26.87
Carbimazole tablets 10 mg Neo Mercazole 10 mg 88.59 2.61 1.09 26.85
tablet 100
Thyrocab 10 mg tablet 60 5.85 2.88 1.21 65.49
Anti Thyrox 10 mg 4.92 2.39 1 27.34
tablet 100
Carbimazole tablets 5 mg Neo Mercazole 5 mg 90.92 1.58 1.11 27.34
tablet 100
Anti Thyrox 5 mg 4.72 1.43 1 26.86
tablet 100
Thyrocab 5 mg tablet 100 4.03 1.46 1.02 27.13
Clomiphene citrate tablets Siphene 100 mg tablet 5 35.31 11.5 2.66 29.97
100 mg Clofert 100 mg tablet 5 33.74 10.89 2.52 26.91
Fertyl super 100 mg 10.59 10.12 2.34 27.34
tablet 5
Colchicin tablets 0.5 mg Zycolchin 0.5 mg tablet 10 83.82 3.12 3.17 26.6
Goutnil 0.5 mg tablet 10 15.96 1.98 2.01 26.84
Colochicine 0.5 mg 0.22 1.64 1.67 25.98
tablet 10
(continued)
Table 3.3 (continued)

Price/
Diethylcarbamazine citrate Banocide forte 50 mg 95.34 0.74 2.62 27.35
tablets 50 mg tablet 30
Banocide 50 mg tablet 10 4.42 0.48 1.71 70.43
Banocide 50 mg tablet 100 0.14 0.36 1.26 232.96
Digoxin tablets 0.25 mg Lanoxin 0.25 mg tablet 10 92.13 1.35 2.35 23.19
Lanoxin 0.25 mg tablet 250 4.74 1.29 2.26 19.2
Dixin 0.25 mg tablet 10 2.7 0.82 1.43 24.17
Diltiazem tablets 30 mg Dilzem 30 mg tablet 10 79.65 2.52 2.81 31.1
Angizem 30 mg tablet 10 10.96 2.69 3 26.59
Channel 30 mg tablet 10 3.9 2.5 2.79 26.07
Enalapril Maleate tablets Envas 2.5 mg tablet 15 62.18 1.56 4.06 26.86
2.5 mg Enam 2.5 mg tablet 15 23.37 1.6 4.16 27.34
Nuril 2.5 mg tablet 10 5.69 1.62 4.22 27.69
Enalapril Maleate tablets 5 mg Envas 5 mg tablet 15 60.67 2.53 7.92 26.84
Enam 5 mg tablet 15 21.11 2.16 6.78 27.34
Nuril 5 mg tablet 10 6.5 2.78 8.69 27.16
Ethambutol tablets 400 mg Combutol 400 mg tablet 10 72.78 1.77 1.03 23.62
Mycobutol 400 mg 19.81 1.95 1.14 23.18
tablet 10
Themibutol 400 mg 7.4 1.72 1 23.62
tablet 10
Mycobutol 600 mg 24.12 2.95 1.57 23.17
tablet 10
Themibutol 600 mg 5.85 2.56 1.37 23.61
tablet 10
Mycobutol 800 mg 23.52 3.87 1.59 23.61
tablet 10
Themibutol 800 mg 5.8 3.4 1.4 23.62
tablet 10
Folic Acid tablets 5 mg Folvite 5 mg tablet 30 84.02 1.89 12.56 26.37
Fol 5 5 mg tablet 10 3.61 1.31 8.73 26.53
Sysfol new 5 mg tablet 30 3.33 1.15 7.62 28.21
Glibenclamide tablets 2.5 mg Semi Daonil 2.5 mg 72.65 0.47 2.19 26.77
tablet 10
Semi Euglucon 2.5 mg 15.25 0.51 2.4 26.34
tablet 10
Daonil 2.5 mg tablet 60 6.29 0.76 3.59 76.2
Glibenclamide tablets 5 mg Daonil 5 mg tablet 10 84.4 0.83 2.17 26.79
Euglucon 5 mg tablet 10 10.21 0.76 1.97 27.31
Daonil 5 mg tablet 600 4.39 0.63 1.63 493.49
Hydrochlorthiazide tablets Aquazide 12.5 mg tablet 10 73.49 0.97 1.58 26.84
12.5 mg Hydride 12.5 mg tablet 10 8.9 1.04 1.7 26.86
Hydrazide 12.5 mg 8 0.64 1.04 26.39
tablet 10
(continued)

Price/
Hydrochlorthiazide tablets Aquazide 25 mg tablet 10 70.03 1.63 2 26.44
25 mg Hydrazide 25 mg tablet 10 9.7 1.1 1.35 26.07
Hydride 25 mg tablet 10 8.63 1.7 2.08 26.9
Hydroxychloroquine phos- Hcqs 200 mg tablet 10 66.46 5.23 1.63 26.82
phate tablets 200 mg Hydroquin 200 mg 7.08 5.46 1.7 26.71
tablet 10
Oxcq 200 mg tablet 10 6.34 5.03 1.57 26.63
Imatinib tablets 400 mg Imat 400 mg tablet 10 21.84 182.11 1.4 96.34
Levin(Drl) 400 mg 18.67 329.03 2.54 28.12
tablet 10
Veenat 400 mg tablet 10 18.57 265.1 2.04 30.03
Imipramine tablets 25 mg Depsonil 25 mg tablet 10 65.73 0.99 1.72 27.32
Antidep 25 mg tablet 10 17.04 0.77 1.34 30.92
Depsol 25 mg tablet 10 6.98 0.59 1.03 26.31
Imipramine tablets 75 mg Antidep 75 mg tablet 10 56.22 2.2 1.57 31.06
Depsol 75 mg tablet 10 22.39 1.57 1.11 26.09
Depsin 75 mg tablet 10 3.83 2.29 1.63 24.98
Isosorbide 5 Mononitrate tab- Monotrate 10 mg tablet 10 43.54 2.17 2.18 26.9
lets 10 mg Ismo 10 mg tablet 15 36.77 1.85 1.85 27.34
Monit 10 mg tablet 15 9.54 1.23 1.24 30.35
Isosorbide 5 Mononitrate tab- Monotrate 20 mg tablet 10 37.99 3.49 4.65 26.9
lets 20 mg Ismo 20 mg tablet 15 37.66 3.08 4.1 27.34
Monit 20 mg tablet 15 9.36 2.03 2.71 30.71
Lamivudine + Nevirapine + Triomune 150/30/200 mg 56.25 16.85 3.19 27.34
Stavudine tablets 150 m tablet 30
Emtri 150/30/200 mg 18.08 17.53 3.32 29.22
tablet 30
Stavex Ln 150/30/200 mg 10.04 16.73 3.17 26.23
tablet 30
Lamivudine + Zidovudine Duovir 150/300 mg 34.34 15.26 1 27.34
tablets 150 mg + 300 mg tablet 60
Duovir 150/300 mg 20.9 16.73 1.1 27.34
tablet 10
Zidolam 150/300 mg 17 16.01 1.05 27.34
tablet 10
Leflunomide tablets 20 mg Lefra 20 mg tablet 10 34.03 16.99 1.93 31.25
Lefno 20 mg tablet 10 18.47 13.59 1.55 27.19
Cleft 20 mg tablet 10 14.18 18.02 2.05 29.06
Lithium Carbonate tablets Lithosun 300 mg tablet 10 51.7 2.05 2.07 26.8
300 mg Licab 300 mg tablet 10 33.03 1.45 1.46 30.84
Elcab 300 mg tablet 10 3.05 1.02 1.03 10.49
Losartan Potassium tablets Losar 25 mg tablet 10 24.39 2.47 4.17 26.31
25 mg Repace 25 mg tablet 10 18.07 2.58 4.36 26.83
Covance 25 mg tablet 10 9.66 3.1 5.23 30
(continued)

Price/
Losartan Potassium tablets Losar 50 mg tablet 10 21.4 4.61 4.19 26.04
50 mg Repace 50 mg tablet 10 15.85 4.89 4.45 26.87
Losar 50 mg tablet 15 10.31 4.87 4.43 29.26
Medroxy Progesterone Acetate Deviry 10 mg tablet 10 43.98 4.12 1.28 26.87
tablets 10 mg Meprate 10 mg tablet 10 23.46 4.07 1.26 29.95
Modus 10 mg tablet 10 20.76 4.94 1.53 26.86
Mefloquine tablet 250 mg base Mefque 250 mg tablet 4 28.12 47.5 1.52 26.67
Mefloc 250 mg tablet 4 26.5 31.28 1 26.67
Larimef 250 mg tablet 6 22.83 43.08 1.38 27.34
Methotrexate tablet 2.5 mg Neotrexate 2.5 mg tablet 10 59.35 4.41 1.64 27.34
Biotrexate 2.5 mg tablet 10 12.56 3.78 1.4 31.12
Folitrax 2.5 mg tablet 10 10.86 3.73 1.38 27.34
Methotrexate tablets 5 mg Folitrax 5 mg tablet 10 61.73 6.23 2.4 27.34
Oncotrex 5 mg tablet 10 26.27 6.13 2.36 27.14
Mexate 5 mg tablet 4 5.95 6.84 2.63 27.11
Methotrexate tablets 7.5 mg Folitrax 7.5 mg tablet 10 66.82 9.3 6.74 27.12
Mexate 7.5 mg tablet 4 11.85 12.68 9.2 27
Oncotrex 7.5 mg tablet 10 11.21 8.85 6.42 27.03
Methyl Ergometrine tablets Methergin 0.125 mg 81.96 8.99 17.94 26.87
0.125 mg tablet 10
Utergin 0.125 mg tablet 10 11.97 6.15 12.26 27
Ergolin 0.125 mg tablet 10 5.52 3.71 7.39 26.95
Metoclopramide tablets 10 mg Perinorm 10 mg tablet 10 79.34 1.26 5.62 26.82
Reglan 10 mg tablet 10 15.26 1.19 5.33 27.31
Maxeron 10 mg tablet 10 4.36 0.94 4.19 26.9
Misoprostol tablets 100ug Misoprost 100 mcg tablet 4 42.24 9.1 2.52 26.86
Cytolog 100 mcg tablet 10 23.84 5.97 1.66 31.69
Cytolog 100 mcg tablet 4 23.81 6.45 1.79 26.61
Nifedipine tablets 10 mg Nicardia retard 10 mg 70.78 1.3 2.26 26.88
tablet 10
Calcigard retard 10 mg 13.75 1.07 1.86 31.21
tablet 10
Nifedine 10 mg tablet 10 6.19 1.05 1.83 27.31
Norethisterone tablets 5 mg Primolut N 5 mg tablet 10 44.3 4.62 2.46 24.99
Regestrone 5 mg tablet 10 34.05 5.21 2.77 26.85
Cycloreg 5 mg tablet 10 4.78 5.77 3.07 27.93
Olanzapine tablets 10 mg Oleanz 10 mg tablet 10 25.36 5.31 2.79 26.88
Olimelt 10 mg tablet 10 17.38 5.25 2.75 27.01
Oliza 10 mg tablet 10 8.43 4.71 2.47 26.51
Olanzapine tablets 5 mg Oleanz 5 mg tablet 10 29.37 2.7 1.98 26.56
Olimelt 5 mg tablet 10 14.77 2.65 1.94 27.02
Oliza 5 mg tablet 10 10.12 2.41 1.77 26.96
(continued)

Price/
Ondansetron tablets 8 mg Emeset 8 mg tablet 10 34.79 12.56 5.09 27.34
Ondem 8 mg tablet md 10 15.71 8.38 3.39 27.34
Ondem 8 mg tablet 10 14.72 6.2 2.51 27.34
Paracetamol tablets 500MG Calpol 500 mg tablet 15 52.96 0.91 7.02 26.82
Crocin 500 mg tablet 15 10.31 1.06 8.18 25.4
Calpol 500 mg tablet 1000 6.73 0.32 2.48 39.1
Phenobarbitone tablets 60 mg Gardenal 60 mg tablet 20 98.89 1.96 4.19 27.34
Phenobarb 60 mg tablet 10 0.69 0.67 1.44 24.64
Emgard 60 mg tablet 10 0.35 1.91 4.08 26.86
Phenytoin Sodium Capsules or Eptoin 50 mg tablet 150 90.89 0.82 7.91 21.52
tablets 50 mg Epsolin 50 mg tablet 100 5.97 0.57 5.51 26.7
C Toin 50 mg tablet 90 1.68 0.68 6.57 27.34
Primaquine tablets 7.5 mg Malirid 7.5 mg tablet 10 91.16 1.66 1.37 32.54
Pmq Inga 7.5 mg tablet 10 5.99 1.72 1.42 26.37
Leoprime forte 7.5 mg 1.61 2.97 2.45 26.08
tablet 14
Promethazine tablets 25 mg Avomine 25 mg tablet 10 85.32 2.29 3.71 27.33
Phenergan 25 mg tablet 10 14.15 1.6 2.59 27.32
Regan (A.N. Pharmacia) 0.32 1.37 2.22 19.74
25 mg tablet 10
Pyrazinamide tablets 1000 mg Pyzina 1000 mg tablet 10 41.49 7.34 1.4 23.62
P Zide 1000 mg tablet 10 23.06 8.4 1.6 23.62
Pza Ciba 1000 mg tablet 10 15.39 7.69 1.47 23.15
P Zide 500 mg tablet 10 20.75 3.82 3.26 23.16
P Zide 750 mg tablet 10 28.82 6.37 4.62 23.16
Quinine Sulphate tablets Rez Q 300 mg tablet 10 46.41 5.36 2.93 27.34
300 mg Qinarsol 300 mg tablet 10 20.31 4.54 2.48 26.41
Cinkona 300 mg tablet 10 8.13 4.91 2.68 25.86
Raloxifene tablets 60 mg Fiona 60 mg tablet 10 54.98 9.76 1.73 27.34
Ralista 60 mg tablet 10 36.43 8.39 1.49 26.85
Fiona 60 mg tablet 7 6.55 13.95 2.47 27.35
Sodium Valproate tablets Valparin 200 mg tablet 10 57 2.37 1.56 26.83
200 mg Epilex 200 mg tablet 10 19.24 3.12 2.06 27.34
Encorate 200 mg tablet 10 10.41 2.43 1.61 26.91
Stavudine + Lamivudine Lamivir S 150/30 mg 51.82 8.44 1.06 27.34
tablets 30 mg + 150 mg tablet 60
Lamistar 150/30 mg 20.68 8.77 1.1 27.34
tablet 10
Emduo 150/30 mg 13.9 8 1 27.44
tablet 60
(continued)

Price/
Tamoxifen Citrate tablets Tamodex 20 mg tablet 10 45.85 2.75 1.6 30.73
20 mg Tamoxifen 20 mg tablet 10 36.9 2.83 1.65 21.1
Tamoxifen (Het) citrate 14.61 2.74 1.59 27.57
20 mg tablet 10
Terbutaline Sulphate tablets Bricanyl 2.5 mg tablet 20 98.06 0.75 1.23 26.89
2.5 mg Tetrasma 2.5 mg tablet 10 1.59 4.22 6.86 25.07
Bricanyl 2.5 mg tablet 60 0.35 0.62 1 24.87
Trihexyphenidyl Hydrochlo- Pacitane 2 mg tablet 10 75.7 2.2 5.13 26.4
ride tablets 2 mg Parkin 2 mg tablet 10 9.69 1.62 3.78 27.33
Bexol 2 mg tablet 10 3.82 0.83 1.93 26.77
Zidovudine + Lamivudine + Duovir N 150/300/200 mg 57.56 18.36 3.44 27.34
Nevirapine tablets 300 tablet 30
Lazid—N 150/300/200 mg 18.3 19.72 3.69 27.44
tablet 30
Zidolam N 150/300/ 13.67 18.3 3.43 27.34
200 mg tablet 10
brands. To elaborate on this point, consider the case of retail margins for
Amiodarone 100 mg tablets. The Cordarone 100 mg brand, which explains
82.43% of the market, is priced at Rs. 64.4 per ten tablets at 5.26 times the minimum
price. The retailer margin on Cordarone brand is 26.87% or Rs. 17.3 for a pack of ten
tablets. In comparison, the price of the lowest price brand is Rs. 12.24, with a retailer
trade margin of Rs. 3.7, estimated at 30%. Therefore, a retailer is incentivized to
market Cordarone relative to a cheaper alternative aggressively. Such retail trade
margins are relatively higher compared margins for pharmaceuticals in other
countries.
3.5 Evidence of High Trade Margins on Several Brands
While a trade margin of 30% for higher priced brands results in a larger absolute
profit margin, pharmaceutical firms have the option to increase the trade margin from
30% to 40 or even 50%, thus increasing the net benefit to the retailer in return for
retailer patronage. Srinivasan (1999) suggests that manufacturers giving exorbitant
trade margins remains a major problem in the Indian pharmaceutical industry. We
examine the extent of trade margins for medicines on the June 14, 2013 List. We
report in Table 3.4 the retail trade margins for 125 brands of medicines with at least
100% in high trade margins, as computed in December 2012, when the 2013 DPCO
list of medicines was released publicly. These brands represent 7.3% of the overall
number of brands of the medicines in the June 14, 2013, List. In some medicine
markets, there are multiple brands with more than 100% margin, indicating that it is
3.5 Evidence of High Trade Margins on Several Brands 51
Table 3.4 Brands with more than 100% vertical trade margin in December 2012 among the
150 medicines whose ceiling price was fixed on June 14 2013
Medicine SKU MRP PTR Margin
Acyclovir tablets 200 mg Lovir (Eli Lilly) 200 mg tablet 5 365 57.79 531.6
Ampicillin powder for suspen- Ampurin 125 mg dry syrup 30 ml 20 9 122.2
sion 125 mg/5 ml
Atenolol tablets 100 mg Obeta 100 mg tablet 14 30 12 150
Hipres 100 mg tablet 14 55 11 400
Atropine Sulphate injection Atrowok 0.60 mg injection 1 ml 8.5 4 112.5
0.6 mg/ml
Azathioprine tablets 50 mg Azathioprine 50 mg tablet 10 442.47 41.12 976
Azithromycin tablets 500 mg Azikem (Alkem) 500 mg tablet 3 75 27 177.8
Azax 500 mg tablet 3 70.88 30 136.3
Azilup 500 mg tablet 3 73.12 26 181.2
Azivista 500 mg tablet 3 79 29 172.4
Azitol 500 mg tablet 3 72 28.3 154.4
Jocin 500 mg tablet 10 218 49.95 336.4
Zithrokem 500 mg tablet 3 75 31.43 138.6
Azicip 500 mg tablet 3 69.3 32.57 112.8
Gerimac 500 mg tablet 3 85 35.82 137.3
Carbimazole tablets 10 mg Thyrocab 10 mg tablet 60 428 170.31 151.3
Cyclosporine capsules 50 mg Consiral 50 mg capsule 5 390 180 116.7
Diethylcarbamazine citrate Banocide 50 mg tablet 10 12.75 4.46 185.9
tablets 50 mg Banocide 50 mg tablet 100 56.25 9 525
Domperidone syrup 1 mg/ml Stopvom 1 mg suspension 30 ml 24 9 166.7
Vomistop 1 mg suspension 30 ml 30.5 9.7 214.4
Dopamine Hydrochloride Dopacef 40 mg injection 5 ml 150 33.75 344.4
injection 40 mg/ml
Doxorubicin injection 50 mg Adrosal 50 mg injection 1 895 290 208.6
Zodox 50 mg injection 1 962 450 113.8
Enalapril Maleate tablets Dilvas 2.5 mg tablet 10 18.4 3.55 418.3
2.5 mg
Enalapril Maleate tablets 5 mg Enalapril(Cip) 5 mg tablet 10 19.8 8 147.5
Minipril 5 mg tablet 10 16.1 4.82 234
Dilvas 5 mg tablet 10 29.4 3.85 663.6
Folic Acid tablets 5 mg Folly 5 mg tablet 10 8 2 300
Folitab 5 mg tablet 30 59.35 7 747.9
Vitafol(Cip) 5 mg tablet 10 17.3 2.5 592
Foldivit 5 mg tablet 10 8.33 1.9 338.4
Gemcitabine hydrochloride Gemciglan 1000 mg injection 1 5999 1809.52 231.5
injection 1 gm Gembin 1000 mg injection 1 6390 1993.85 220.5
Gemcitabine hydrochloride Gembin 200 mg injection 1 1440 600 140
injection 200 mg
Glibenclamide tablets 2.5 mg Semi Daonil 2.5 mg tablet 40 29 4.87 495.5
Daonil 2.5 mg tablet 60 65.46 9.24 608.4
Glibenclamide tablets 5 mg Daonil 5 mg tablet 600 168 8.4 1900
Imatinib tablets 400 mg Imanib 400 mg tablet 30 10,200 5000 104
(continued)

Losartan Potassium Omnitan 25 mg tablet 10 39.75 10.73 270.5
tablets 25 mg Cosart 25 mg tablet 10 30.5 9 238.9
Losartan Potassium Losa 50 mg tablet 10 30.18 9.24 226.6
tablets 50 mg Cosart 50 mg tablet 10 57.5 24 139.6
Methotrexate tablets 7.5 mg Mext 7.5 mg tablet 10 118 38.88 203.5
Methyl Ergometrine Metharmed 0.125 mg tablet 10 42.6 7 508.6
tablets 0.125 mg Methastar 0.125 mg tablet 10 56.25 6.98 705.9
Methygin 0.125 mg tablet 10 57 6.5 776.9
Methercip 0.125 mg tablet 10 69 5 1280
Metoclopramide injection Emenorm 5 mg injection 2 ml 8 3 166.7
5 mg/ml
Metoclopramide tablets 10 mg Vominorm 10 mg tablet 10 8.4 4 110
Midazolam injection 1 mg/ml Mezolam 1 mg injection 10 ml 83 38 118.4
Medzol 1 mg injection 5 ml 50 25 100
Mezolam 1 mg injection 5 ml 49.5 22 125
Midazolam injection 5 mg/ml Midfast 5 mg injection 5 ml 50 20 150
Mezolam 5 mg injection 1 ml 41 20 105
Neostigmine injection Tilstigmin 0.5 mg injection 5 ml 93.5 15.77 492.9
0.5 mg/ml
Nifedipine tablets 10 mg Depicor 10 mg tablet Sr 10 29.4 11.41 157.7
Calnif retard 10 mg tablet 10 126.07 11.42 1003.9
Norethisterone tablets 5 mg Norlut N 5 mg tablet 10 53.5 19 181.6
Dubogen 5 mg tablet 10 55 22.27 147
Ofloxacin syrup 50 mg/5 ml Woflox 50 mg syrup 30 ml 31.65 9 251.7
Oflokem 50 mg suspension 30 ml 34 10 240
Eufox 50 mg suspension 30 ml 28.6 10 186
Oflostar(Cdl) 50 mg suspension 27 11 145.5
30 ml
Otox 50 mg suspension 60 ml 36 14.59 146.7
Nicoflox(Phc) 50 mg suspension 26 10 160
30 ml
Oxo 50 mg suspension 30 ml 26 8.44 208.1
Olanzapine tablets 10 mg Tolaz 10 mg tablet 10 61.76 19.23 221.2
Olanzapine tablets 5 mg Tolaz 5 mg tablet 10 30.71 13.64 125.1
Ondansetron tablets 8 mg Emeset md 8 mg tablet md 10 164 43.84 274.1
Pantoprazole injection 40 mg Pantosec iv 40 mg injection 10 ml 72 18.9 281
Panplus 40 mg injection 10 ml 48 21.71 121.1
Peptilcer 40 mg injection 1 65 14.45 349.8
Pentowok 40 mg injection 10 ml 93 15 520
Pazom iv 40 mg injection 1 65 15 333.3
Panprazole 40 mg injection 10 ml 85 23 269.6
Panomp 40 mg injection 10 ml 75 12 525
Pentab 40 mg injection 10 ml 62.25 17 266.2
P Ppi 40 mg injection 10 ml 55.4 18 207.8
Zepoxin 40 mg injection 10 ml 72 16 350
Pazo (Algen) 40 mg injection 10 ml 64 18 255.6
(continued)
3.5 Evidence of High Trade Margins on Several Brands 53

Paracetamol injection Paracip 150 mg injection 2 ml 59 2.95 1900
150 mg/ml
Paracetamol syrup 125 mg/5 ml Paracip 125 mg syrup 60 ml 26.6 11 141.8
Pfc 125 mg syrup 60 ml 28.8 13.75 109.5
Jagcin 125 mg syrup 60 ml 24 11.82 103
Dolomol 125 mg syrup 60 ml 24 9.95 141.2
Lupipara 125 mg syrup 60 ml 26.5 11.43 131.8
Paracetamol tablets 500 mg Pyricool 500 mg tablet 15 17.5 4 337.5
Anglopar 500 mg tablet 10 9.66 2.9 233.1
Paracin(Trq) 500 mg tablet 100 238.28 15.22 1465.6
Actiflu 500 mg tablet 10 38 8.42 351.3
Cipmol 500 mg tablet 10 10.2 3.88 162.9
Pyremol 500 mg tablet 10 8.5 4 112.5
Pyrakem 500 mg tablet 15 20 4.8 316.7
Temfix 500 mg tablet 10 8 3.25 146.2
Lupipara 500 mg tablet 10 9 3.6 150
Paracip 500 mg tablet 10 11 3.8 189.5
Welset 500 mg tablet 10 7.56 3.35 125.7
Doliprane 500 mg tablet 10 5.9 2.95 100
Pyrakem 500 mg tablet 10 7.5 2.8 167.9
Flumol 500 mg tablet 10 10.5 2.98 252.3
Permethrin lotion 5% Scabepil 5% lotion 50 ml 65 16.92 284.2
Povidone Iodine solution 5% Cipladine 5% solution 100 ml 90.46 25 261.8
Antidon 5% solution 100 ml 55 16.91 225.3
Cipladine 5% solution 500 ml 189 81.98 130.5
Bectosept 5% solution 500 ml 152.71 70 118.2
Lupidine 5% solution 100 ml 62.7 12.5 401.6
Povicidal 5% solution 100 ml 62.5 15.85 294.3
Bectosept 5% solution 100 ml 77.49 21 269
Propofol injectable 1% oil Neorof 1% injection 10 ml 138 53.26 159.1
suspension Profol 1% infusion 50 ml 390 175 122.9
Neorof 1% injection 20 ml 198 74.57 165.5
Neorof 1% infusion 50 ml 445 177.55 150.6
Pyrazinamide tablets 750 mg Zypara 750 mg tablet 10 51 14 264.3
Quinine sulphate tablets Bactiquin 300 mg tablet 10 60.12 27.39 119.5
300 mg
Streptokinase injection Stpase 1,500,000 Iu injection 10 ml 2864.59 1000 186.5
1,500,000 IU
Streptokinase injection Thrombosolv 750,000 Iu injection 1 1483 527.78 181
750,000 IU
Tamoxifen Citrate tablets Tomifen 20 mg tablet 10 45 22.49 100.1
20 mg
Tetanus Toxoid injection Abhay Tox injection 0.5 ml 22 10 120
Tetanus Toxoid injection Sii Hibro injection 0.5 ml 375 136.05 175.6
(continued)

Thiopentone Sodium injectable Thiosol 500 mg injection 0.5 ml 62 30 106.7
0.5 G powder
Vancomycin Hydrochloride Vanking 1 Gm injection 10 ml 756 160 372.5
injection 1 g Vancogram 1000 mg injection 1 639 242.5 163.5
Vancomycin Hydrochloride G Vanc 500 mg injection 10 ml 385 125 208
injection 500 mg Vanking 500 mg injection 10 ml 425 100 325
not an uncommon practice. For example, in the market for Paracetamol 500 mg
tablets, there are 14 brands with more than 100% trade margin. Similarly, in the
market for Paracetamol 125 mg/5 ml syrup, five different brands have more than
100% trade margin. Closer inspection reveals that the trade margin is much higher
than 100% for dispensing packs, that is, SKUs containing a large number of units for
use at a hospital. For example, the trade margin for 100 tablets of Paracin 500 mg is
1465%, indicating that the brand sells each tablet at Rs. 0.15 per tablet to the retailer,
presumably at a profit, indicating that their marginal cost of production is lower than
Rs. 0.15. The ceiling price for Paracetamol is fixed at around Rs. 1 per tablet, more
than six times the price-to-the-retailer for a dispensing pack. The MRP for Paracin
500 mg is 238, indicating that the per-tablet price to the consumer is 2.38, creating an
incentive for the pharmacist and the hospitals for profiting from the inexplicably
high trade margin.
Next, using data on all the 150 medicines present in the June 14, 2013 List,
we examine the variation in prices for different brands of the same medicine
manufactured by the same company. We found 64 cases of companies in 25 medicine
markets where one or more companies sell at least three versions of the same
medicine and dosage. Cipla tops the list by producing multiple brands in 16 different
medicine markets. Alkem and Lupin produce multiple brands of the same medicine
in six and five medicine markets respectively. The list also contains several domestic
and multinational firms such as Cadila, GSK, Abbott, Indoco, Indswift, Ipca Lab,
Mankind, Micro, Ranbaxy, and Zydus. Our analysis expands on the study of five
medicines by Singal et al. (2011), which finds large differences in prices, but little
differences in quality.
We present a partial list of firms manufacturing three or more brands within a
medicine in Table 3.5. We use pricing data for May 2012, which formed the basis for
fixing the ceiling price for the chosen medicines a year later in Jun 2013 (we will
elaborate on the design and timing issues surrounding the 2013 DPCO in the next
two chapters). The brand name and dosage of the medicine are shown in column
1, company name in column 2, and the detailed SKU in column 3. The PTR, MRP,
and SKU’s share of the sales within the company’s medicine sales are shown in
columns 4–6. The retailer trade margin is shown in column 7 and how expensive is
the most expensive SKU relative to the least expensive SKU of the same company in
May 2012 is shown in column 8. We find that the more expensive SKU is uniformly
several times more expensive than the least expensive SKU and that it is also the
Table 3.5 Examples of price variation for medicines of a company in May 2012 for the same dosage formulation
SKU share in PTR/Min
Medicine Company SKU PTR MRP company Margin PTR
Albendazole (400 mg) Cipla Bendex 400 mg tablet 1 12.07 15.7 98.39 30.07 7.32
Tiobend 400 mg tablet 1 3.3 12 0.07 263.64 7.32
X worm 400 mg tablet 1 1.65 15 1.54 809.09 7.32
Indoco Abz 400 mg tablet 10 1.37 1.8 93.58 31.29 10
Abz 400 mg tablet 2 13.71 18 2.59 31.29 10
Olban 400 mg tablet 1 12.8 16.65 3.83 30.08 10
Klar Sehen Odal 400 mg tablet 1 9.22 10 81.62 8.46 15.36
Odal 400 mg tablet 2 9.23 12 17.44 30.08 15.36
Odal 400 mg tablet 20 0.6 0.75 0.95 24.98 15.36
Lupin Lupibend 400 mg tablet 1 1.75 12 16.7 585.71 10
Lupiworm 400 mg tablet 1 11.43 15 72.26 31.23 10
Lupiworm 400 mg tablet 10 1.14 1.5 11.04 31.23 10
Allopurinol (100 mg) Cipla Alrik 100 mg tablet 10 1.9 2.4 0.54 25.98 2.49
Ciploric 100 mg tablet 10 1.97 2.59 67.68 31.22 2.49
Ciprolic 100 mg tablet 10 1.99 2.59 2.12 29.96 2.49

Zyrik 100 mg tablet 10 0.8 2.3 29.66 187.5 2.49
Alprazolam (0.25 mg) Cipla Restyl 0.25 mg tablet 10 1.19 1.49 3.59 25 5.96
Restyl 0.25 mg tablet 15 0.86 1.13 96.21 31.27 5.96
Restyl 0.5 mg tablet 10 2.14 2.67 15.59 24.96 7.13
Restyl 0.5 mg tablet 15 1.55 2.03 84.22 31.24 7.13
Tranax 0.25 mg tablet 10 0.2 1.24 0.14 520 5.96
Tranax 0.5 mg tablet 10 0.3 2.2 0.18 633.33 7.13
Tranquil 0.25 mg tablet 10 0.2 1.24 0.07 520 5.96
(continued)
55
56

Amlodipine (5 mg) Alkem Amlogen 5 mg tablet 10 6.62 8.28 1.12 25 3.1
Amlogen 5 mg tablet 7 2.13 2.79 0.98 30.52 3.1
Amlokem 5 mg tablet 10 4.8 5 2.97 4.17 3.1
Dip (Alkem) 5 mg tablet 10 2.25 2.9 94.93 29 3.1
Cipla Amlip 5 mg tablet 10 0.4 2.77 0.65 592.5 8.61
Amlopres 5 mg tablet 10 3.44 4.48 11.53 30.08 8.61
Amlopres 5 mg tablet 15 2.3 2.99 87.82 30.08 8.61
Amoxycillin (250 mg) Alkem Almox 250 mg capsule 10 1 4.34 96.06 334 2.3
Almox 250 mg capsule 1000 0.44 1.4 3.19 221.84 2.3
Moxikem 250 mg capsule 10 0.9 4.34 0.76 382.22 2.3
Cipla Cipmox 250 mg capsule 10 1.58 6.3 0.29 300 13.53
Novamox 250 mg capsule 15 4.51 5.87 99.68 30.1 13.53
Amoxycillin (500 mg) Cipmox 500 mg capsule 10 2.8 10.39 0.44 271.25 5.68
Novamox 250 mg capsule 3 21.3 26.42 0.03 24 13.53
Novamox 500 mg capsule 3 15.91 19.88 1.61 25 5.68
Ranbaxy Amx 500 mg capsule 10 1.89 2.34 0.03 24.02 3.89
Mox 500 mg capsule 15 7.35 9.26 99.94 26 3.89
Roscillin Amx 500 mg capsule 10 2.29 2.84 0.02 24.02 3.89
Amoxycillin + Clavulanic acid (500/125 mg) Cadila Lmx forte 500/125 mg tablet 6 16.65 21.85 95.93 31.24 2.01
Mokcan cv 500/125 mg tablet 6 8.28 41.67 0.15 403.02 2.01
Symbiotik xl plus 500/125 mg tablet 6 16.57 19.95 3.92 20.39 2.01
Cipla Advent 500/125 mg tablet 6 13.84 18 50.09 30.1 2.78
Cipclav 500/125 mg tablet 6 28.8 36 1.74 25 2.78
Cipmox cv 500/125 mg tablet 6 10.37 42 0.09 305.01 2.78
3 Is the 2013 Price Control Regulation Necessary?
Clavmox 500/125 mg tablet 6 13.81 18 0.21 30.32 2.78
Novaclav 500/125 mg tablet 6 28 42 4.37 50 2.78
Novamox cv 500/125 mg tablet 10 13.08 16.09 3.96 23 2.78
Novamox cv 500/125 mg tablet 6 13.84 18 35.77 30.1 2.78
Omniclav 500/125 mg tablet 6 13.81 18 3.76 30.32 2.78
Dr. Johns Jonclav 500/125 mg tablet 10 21.81 27.48 38.58 26 3.72
Lab Jonclav 500/125 mg tablet 6 36.64 45.8 9.55 25 3.72
Navclav 500/125 mg tablet 10 9.85 23.95 1.88 143.05 3.72
Roclav 500/125 mg tablet 10 20.94 27.49 31.09 31.25 3.72
Roclav 500/125 mg tablet 6 34.91 45.82 18.9 31.25 3.72
Morepen Cvmox 500/125 mg tablet 6 20.95 27.5 19.18 31.24 2.48
Eradiclav 500/125 mg tablet 10 8.46 11.1 24.43 31.24 2.48
Eradiclav 500/125 mg tablet 6 14.1 18.5 56.38 31.25 2.48
Ozone Clavcare 500/125 mg tablet 6 11.43 15 46.49 31.25 2.54
Xpand 500/125 mg tablet 6 11.43 15 43.05 31.25 2.54
Xtend 500/125 mg tablet 6 28.98 36.22 10.46 25 2.54
Atorvastatin (10 mg) Abbott Caat 10 mg tablet 10 7.36 9.66 26.29 31.26 2.29
Lipigoal 10 mg tablet 10 3.23 3.86 6.23 19.44 2.29

Stator 10 mg tablet 10 3.22 4.22 67.47 31.26 2.29
Cipla Atorlip 10 mg tablet 10 7.16 9.4 99.06 31.25 6.51
Lipvas 10 mg tablet 10 1.1 7.7 0.48 600 6.51
Omnitor 10 mg tablet 10 1.1 7.53 0.46 584.09 6.51
Lupin Tonact 10 mg tablet 15 6.56 8.54 99.76 30.12 2
Tonact 10 mg tablet 30 3.28 6.63 0.24 102.13 2
Tonact-Mp 10 mg tablet 30 5.17 6.63 0 28.22 2
Systopic Orvas 10 mg tablet 10 2.83 3.71 20.6 31.23 2.8
Orvas 10 mg tablet 14 2.02 2.65 69.55 31.23 2.8
Orvas 10 mg tablet 5 5.65 7.12 9.85 26 2.8
(continued)
57
58

Azithromycin (250 mg) Alkem Azento 250 mg tablet 6 7.97 10.46 14.79 31.25 2.61
Azikem (Alkem) 250 mg tablet 10 3.05 7.5 0.24 145.9 2.61
Azikem (Alkem) 250 mg tablet 6 5.5 12.5 6.85 127.27 2.61
Pratham 250 mg tablet 6 7.27 9.54 44.03 31.25 2.61
Zithium 250 mg tablet 6 7.39 9.7 33.46 31.24 2.61
Zithrokem 250 mg tablet 6 4.14 12.5 0.64 201.81 2.61
Cadila Azivista 250 mg tablet 6 4.83 13.42 4.86 177.92 4.36
Zycin(Cdl) 250 mg tablet 3 21.05 25.11 2.2 19.32 4.36
Zycin(Cdl) 250 mg tablet 6 9.65 12.47 92.94 29.17 4.36
Indswift Azithro 500 mg tablet 3 13.68 18.63 93.89 36.21 2.09
Azovid 500 mg tablet 3 8.33 40 1.09 380 2.09
Swithro 500 mg tablet 3 17.45 22.78 5.02 30.57 2.09
Ipca Lab Azibact 250 mg tablet 6 9.99 13 83.71 30.09 2.02
Azifast 250 mg tablet 3 20 24.33 0.56 21.67 2.02
Azifast 250 mg tablet 6 9.9 13 15.74 31.25 2.02
Lupin Azilup 250 mg tablet 6 4.2 12.19 0.22 190.16 2.21
Aziswift 250 mg tablet 6 9.2 11 31.61 19.52 2.21
Z-1250 mg tablet 10 5.57 12.9 2.27 131.56 2.21
Z-1250 mg tablet 6 9.28 12.08 65.91 30.1 2.21
Azithromycin (500 mg) Azilup 500 mg tablet 3 8.67 24.37 0.13 181.23 2.08
Aziswift 500 mg tablet 3 17.84 23.42 43.64 31.25 2.08
Z-1500 mg tablet 3 18 23.42 56.23 30.11 2.08
Cefalexin (500 mg) Cipla Cefbact 500 mg capsule 10 2.89 3.8 26.22 31.26 4.1
Cephadex 500 mg capsule 10 3.28 16.5 71.44 403.05 4.1
Fixobact 500 mg capsule 10 11.88 15 2.34 26.27 4.1
Cefixime (200 mg) Alembic Cifadin 200 mg tablet 10 4 19.02 0.72 375.5 3.13
Cifadin 200 mg tablet 4 12.5 21.25 0.38 70 3.13
Zofix 200 mg tablet 10 9.07 11.33 98.91 24.99 3.13
Cachet Traxol O 200 mg tablet 10 8.14 10.59 88.09 30.11 2.5
Pharm Traxol O 200 mg tablet 4 20.38 24.95 0.93 22.45 2.5
Traxol O 200 mg tablet 6 13.45 16.57 10.98 23.19 2.5
Micro Alcef O 200 mg tablet 10 4.3 22 0.28 411.63 5.81
Gramocef O 200 mg tablet 10 9.99 13 61.05 30.1 5.81
Rite O Cef 200 mg tablet 10 9.99 13 38.61 30.1 5.81
Rite O Cef 200 mg tablet 4 24.98 31.23 0.06 25 5.81
Pfizer Jetex 200 mg tablet Dt 10 7.62 10 4.98 31.25 2.14
Vibazime 200 mg tablet Dt 15 5.08 6.67 6.73 31.25 2.14
Vibazime 200 mg tablet Dt 7 10.88 14.29 88.29 31.25 2.14
Cefixime (100 mg) Indoco Fevorit 100 mg tablet Dt 10 4.23 5.55 34.88 31.26 2.1
Vcef O 100 mg tablet Dt 10 4.23 5.55 58.94 31.26 2.1
Vexim 100 mg tablet Dt 10 8.87 27 6.18 204.4 2.1
Cetirizine (10 mg) Cipla Alerid 10 mg tablet 10 2.99 3.93 93.44 31.26 13.61
Cetcip 10 mg tablet 10 0.3 3.47 0.72 1055 13.61

Cetcip 10 mg tablet 100 0.24 0.3 0.29 26 13.61
Okacet 10 mg tablet 10 0.22 3.47 5.55 1475 13.61
Intas Histacet 10 mg tablet 10 0.3 2.8 0.75 833.33 3.43
Intazin 10 mg tablet 10 0.15 2.6 0.36 1633.33 3.43
Intazin 10 mg tablet 100 0.09 0.25 98.89 185.71 3.43
Menarini Cezin 10 mg tablet 10 0.41 0.54 66.28 31.39 6.65
Cezin 10 mg tablet 1000 0.18 0.23 28.12 25 6.65
Mcet 10 mg tablet 10 1.21 1.5 5.61 24.48 6.65
Ciprofloxacin (250 mg) Cipla Ciplox 250 mg tablet 10 4.18 5.44 99.83 30.12 4.64
Medicip 250 mg tablet 10 2.43 3.16 0 29.87 4.64
Neocip 250 mg tablet 10 0.9 3.16 0.17 251.22 4.64
59
(continued)
60

Ciprofloxacin (500 mg) Ciplox 500 mg tablet 10 7.12 9.27 99.75 30.1 5.09
Ciprofloxacin (Cipla) 500 mg tablet 10 4.99 6.19 0.01 24 5.09
Ciptec 500 mg tablet 10 1.4 6.13 0.01 337.57 5.09
Medicip (Cipla) 500 mg tablet 10 4.86 6.13 0.03 26.02 5.09
Neocip 500 mg tablet 10 1.88 6.13 0.2 224.99 5.09
Ranbaxy Cifran 500 mg tablet 10 7.58 9.55 97.9 26 5.09
Cifran od 500 mg tablet 5 7.63 9.54 1.97 25.01 5.09
Cipract 500 mg tablet 10 1.5 1.86 0.14 24 5.09
Clopidogrel (75 mg) Cipla Clopigard 75 mg tablet 10 1.3 18.05 0.08 1288.46 2.39
Clopivas 75 mg tablet 10 3.11 6.12 28.7 96.85 2.39
Clopivas 75 mg tablet 15 3.11 4.08 71.22 31.25 2.39
Diclofenac (50 mg) Lupin Defenac 50 mg tablet 10 0.26 1.4 2.19 430.3 5.9
Diclonac 50 mg tablet 10 1.43 1.86 97.7 29.85 5.9
Diclonova 50 mg tablet 10 1.56 2.25 0.11 44.42 5.9
Zydus Inac 50 mg tablet 10 1.29 1.53 76.34 18.66 3.45
Inac 50 mg tablet 4 2.96 3.82 1.98 28.78 3.45
Jonac 50 mg tablet 10 0.86 1.07 21.68 25.03 3.45
Diethylcarbamazine GSK Banocide 50 mg tablet 10 0.89 1.17 3.44 31.31 10
Banocide 50 mg tablet 100 0.09 0.56 0.03 531.31 10
Banocide forte 50 mg tablet 30 0.77 1.02 96.53 31.3 10
Griseofulvin (250 mg) GSK Griseofulvin Fp (Glaxo) 250 mg 1.25 1.54 0.16 23.14 4
tablet 10
Grisovin 250 mg tablet 10 1.24 1.54 14.05 24.24 4
Grisovin Fp 250 mg tablet 10 1.24 1.54 85.67 24.24 4
Grisovin Fp 250 mg tablet 40 0.31 1.56 0.12 396.81 4
Lamivudine + Stavudine + Nevirapine Cipla Triomune 150/30/200 mg tablet 30 16.83 22.1 98.17 31.25 7.12
(150/30/200 mg) Triomune 150/30/200 mg tablet 60 8.42 10.52 0.06 25 7.12
Triomune junior 150/30/200 mg 59.92 74.9 0.04 25 7.12
tablet 10
Triomune Junr 150/30/200 mg 9.99 12.48 1.73 25 7.12
tablet 60
Hetero Nevilast 150/30/200 mg tablet 10 17.52 23 80.94 31.25 3.25
Nevilast 150/30/200 mg tablet 30 16.76 22 18.83 31.25 3.25
Nevilast baby 150/30/200 mg tablet 30 5.39 7 0.23 29.99 3.25
Zidolam N 150/300/200 mg tablet 10 18.29 24 76.61 31.25 6.03
Zidolam N 150/300/200 mg tablet 60 3.03 11.5 3.46 279.14 6.03
Zidolam N Ecopack 150/300/200 mg 17.52 23 19.93 31.25 6.03
tablet 30
Losartan (50 mg) Unichem Losar 50 mg tablet 10 4.78 6.28 78.02 31.27 3.05
Losar 50 mg tablet 15 4.87 6.09 19.98 24.99 3.05
Losar 50 mg tablet 20 4.78 6.28 1.51 31.27 3.05
Losar 50 mg tablet 30 1.59 5.2 0.48 226.09 3.05
Zydus Losacar 50 mg tablet 10 3.71 4.52 92.75 21.8 2.15

Losacar 50 mg tablet 7 7.97 10.35 0.89 29.88 2.15
Losacar Wp 50 mg tablet 30 4.74 6.17 6.36 30.11 2.15
Losartan (25 mg) Losacar 25 mg tablet 10 2.15 2.63 92.28 21.81 2.08
Losacar 25 mg tablet 7 4.48 5.83 2.9 30.11 2.08
Losacar Wp 25 mg tablet 30 2.66 3.47 4.83 30.11 2.08
Metformin (500 mg) Cipla Diacip 500 mg tablet 10 0.96 1.2 0.05 24.74 2.88
Exermet 500 mg tablet 10 1.52 2 95.47 31.23 2.88
Glumet 500 mg tablet 10 0.53 0.7 1.89 31.32 2.88
Metfor 500 mg tablet 10 0.8 1.15 0.02 43.75 2.88
Okamet 500 mg tablet 10 0.8 1.64 2.58 105 2.88
(continued)
61
62

Ofloxacin (200 mg) Abbott Chekmet 200 mg tablet 10 2.1 3.67 40.44 74.9 3.24
Floxid (Nicholas) 200 mg tablet 10 0.77 5.5 0.14 609.68 3.24
Nicoflox(Phc) 200 mg tablet 10 0.88 6.5 0.23 642.86 3.24
Piraflox 200 mg tablet 10 2.51 3.3 59.19 31.26 3.24
Alkem Oflokem 200 mg tablet 10 1 6.5 10.58 550 2.68
Qmax 200 mg tablet 10 0.75 7.1 0.99 846.67 2.68
Ronflox 200 mg tablet 10 2.01 2.63 88.42 31.23 2.68
Cipla Oflox 200 mg tablet 10 6.71 8.8 98.82 31.25 6.73
Okaflox 200 mg tablet 10 1.1 8.3 0.48 654.55 6.73
Olox 200 mg tablet 10 5.71 7.49 0.24 31.27 6.73
Tariflox 200 mg tablet 10 1 7.56 0.31 659.04 6.73
Zocare 200 mg tablet 10 4 5 0.15 25 6.73
Elder Aoxin 200 mg tablet 10 3.62 4.75 2.46 31.25 3.62
Eldeflox 200 mg tablet 10 1 8.75 0.28 775 3.62
Ofvista 200 mg tablet 10 2.68 3.5 97.26 30.35 3.62
Omeprazole (20 mg) Alkem Omee 20 mg capsule 15 0.6 4.17 57.11 594.44 5.04
Omepraz 20 mg capsule 10 0.77 4.6 0.34 499.74 5.04
Omepraz 20 mg capsule 15 3.03 3.93 42.55 30.01 5.04
Cadila Nogacid 20 mg capsule 10 0.9 6.29 3.2 601.45 5.59
Nogacid 20 mg capsule 15 0.67 4.17 5.95 525 5.59
Olit 20 mg capsule 10 3.72 4.85 90.86 30.13 5.59
Cipla Lomac 20 mg capsule 10 5.41 7.05 1.01 30.34 9.01
Lomac 20 mg capsule 15 3.61 4.7 56.46 30.34 9.01
Okacid 20 mg capsule 10 0.8 3.82 0.21 378 9.01
Okacid 20 mg capsule 15 0.63 3.67 33.25 485.11 9.01
Omecip 20 mg capsule 15 0.6 3.67 8.34 511.11 9.01
Omeprazole(Cip) 20 mg capsule 10 1.57 3.3 0.73 109.79 9.01
Mankind Oskar 20 mg capsule 10 1.51 1.98 77.68 31.21 2
Oskar 20 mg capsule 12 1.26 1.65 19.68 31.21 2
Oskar 20 mg capsule 6 2.52 3.3 2.64 31.21 2
Micro Fact 20 mg capsule 10 3.05 4 1.05 31.23 11.9
Omicap 20 mg capsule 10 9.52 12.5 98.94 31.25 11.9
Ozec 20 mg capsule 10 0.8 6.8 0.01 750 11.9
Ondansetron (4 mg) Indswift Ondisolv 4 mg tablet 10 5.26 6.9 60.42 31.25 6.92
Onswift 4 mg tablet 10 6.78 8.9 38.88 31.25 6.92
Vomigo 4 mg tablet 10 0.98 7.15 0.69 629.59 6.92
Paracetamol (500 mg) Alkem P U C 500 mg tablet 10 0.81 1.06 36.8 31.19 4.9
Paracetamol(Alkem) 500 mg tablet 10 0.19 0.55 0.17 189.47 4.9
Pyrakem (oval) 500 mg tablet 1000 0.17 0.25 24.37 51.52 4.9
Pyrakem 500 mg tablet 10 0.28 0.75 3.14 167.86 4.9
Pyrakem 500 mg tablet 1000 0.17 0.21 25.24 20 4.9
Pyricool 500 mg tablet 15 0.27 1.17 10.27 337.5 4.9
Cipla Actiflu 500 mg tablet 10 0.9 3.8 0.25 322.22 7.48
Cipmol 500 mg tablet 10 0.39 1.02 1.32 161.54 7.48

Panacip 500 mg tablet 10 0.81 1.02 0.2 26.08 7.48
Paracetamol (Cipla) 500 mg tablet 10 0.28 0.6 3.87 114.29 7.48
Paracip 500 mg tablet 10 0.36 1.1 72.32 205.56 7.48
Parafast 500 mg tablet 10 0.84 1.1 0.36 31.26 7.48
Parafast 500 mg tablet 4 2.1 2.75 21.68 31.26 7.48
Exotic Lab Eboo (Exotic lab) 500 mg tablet 10 2.7 3.5 64.97 29.58 9.61
Eboo (Exotic lab) kid 500 mg tablet 10 0.76 0.99 16.98 29.75 9.61
Eboo plus (Exotic lab) 500 mg 7.33 9.5 8.79 29.62 9.61
tablet 10
(continued)
63
64

Eboo spaz (Exotic lab) 500 mg 1.85 2.4 0.38 29.52 9.61
tablet 10
Primol 500 mg tablet 10 0.93 1.2 7.69 29.59 9.61
Primol plus (Exotic lab) 500 mg 1.31 1.7 1.2 29.67 9.61
tablet 10
GSK Calpol 500 mg tablet 1000 0.32 0.45 9.9 41.57 4.98
Calpol 500 mg tablet 15 0.92 1.2 74.85 30.15 4.98
Calpol 500 mg tablet 500 0.34 0.47 0.67 36.98 4.98
Crocin 500 mg tablet 15 1.05 1.36 13.95 28.96 4.98
Crocin advance 500 mg tablet 15 1.59 2 0.64 26 4.98
Ipca Lab Pacimol 500 mg tablet 10 0.94 1.22 42.23 29.93 5.29
Pacimol 500 mg tablet 1000 0.23 0.3 31.73 30.11 5.29
Pacimol Xp 500 mg tablet 10 1.23 1.62 26.04 31.3 5.29
Lupin Lupicin 500 mg tablet 10 0.76 1 57.2 31.23 10.58
Lupicin 500 mg tablet 4 1.9 2.5 5.71 31.23 10.58
Lupipara 500 mg tablet 10 0.39 0.9 29.81 129.59 10.58
Lupipara round 500 mg tablet 1000 0.18 0.3 7.28 66.67 10.58
Phenytoin (100 mg) Mankind Epiforce 100 mg tablet 10 13.33 16.67 12.75 25 11.68
Epiforce 100 mg tablet 100 1.33 1.35 53.23 1.25 11.68
Eptokind 100 mg tablet 100 1.52 1.9 32.79 25 11.68
Neptoin 100 mg tablet 100 1.14 1.51 1.22 31.82 11.68
Primaquine (7.5 mg) Leo Leoprime 7.5 mg tablet 14 1.77 2.29 17.02 29.45 2.46
Leoprime Forte 7.5 mg tablet 14 2.99 3.71 76.15 24.11 2.46
Leoprime Kid 7.5 mg tablet 14 1.21 1.57 4.25 29.41 2.46
Primelife 7.5 mg tablet 14 2.18 2.74 2.58 25.98 2.46
References 65
leading SKU when ranked by market share. For example, in the market for
Albendazole 400 mg, Cipla produces three SKUs, Bendex, Tiobend, and X Worm
with PTRs of Rs. 12.07, 3.3, and 1.65 respectively. The relatively more expensive
brand, Bendex accounts for 98% of the sales of Albendazole 400 mg for Cipla, and it
is more than seven times the price of X Worm. The retail margin for many of the
medicines with lower PTR is exorbitantly high. For example, the retail margin for X
Worm is 809%. The presence of such multiple versions reveals two insights. First,
the marginal cost of production is closer to the lowest PTR, which is several times
lower than the highest PTR. For Cipla, the marginal cost of production for
Albendazole 400 mg is likely to be closer to Rs. 1.65 rather than Rs. 12.07. Second,
the consumer does not benefit from the relatively lower PTR for an alternative brand,
as the manufacturer sets similar MRPs across the multiple brands. For example, the
MRPs of Bendex and X Worm are nearly identical at Rs. 15.7 and Rs. 15 although
there is a huge discrepancy in their PTRs.
In summary, although pharmaceutical companies often complain that price con-
trol regulations are not necessary and that competition would lower prices, the nature
of competition in the Indian pharmaceutical markets is limited, strengthening the
case for a well-designed regulation (Basak 2008).
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Marketing.
Part II
The Design of the 2013 DPCO Regulation
Chapter 4
The Proposed Design to Fix Ceiling Prices
Under 2013 DPCO
4.1 Introduction
In previous chapters, we presented a brief overview of the history of pharmaceutical

price regulation in India over a period of 4 decades and a case to motivate the need
for regulating pharmaceutical prices in India in 2013. In this chapter, we examine the
details of the 2013 DPCO design before we assess its success in limiting pharma-
ceutical prices. We begin by recalling the key differences between the 1995 and
2013 DPCO and describing the manner in which the ceiling price is estimated by the
NPPA. The chapter not only anticipates the potential problems associated with the
implementation of the design but also highlights how pharmaceutical firms can
circumvent price controls.
4.2 Key Differences Between the 1995 and 2013 DPCO
Unlike the 1995 DPCO, which adopted a cost-based approach, the Indian regulators
agreed to implement a market-based method for fixing the prices of essential
medicines under the 2013 DPCO. While a government watch list of essential
medicines was used to determine the set of medicines to be controlled under the
1995 DPCO, India used the 2011 version of the National List of Essential Medicines
(NLEM) as the basis for the 2013 DPCO (Government of India 2011a, b). The
74 bulk drugs regulated under the 1995 DPCO accounted for nearly 40% of the
overall market initially and the coverage reduced to 10% by the late 2000s (Malhotra
2010). However, 652 formulations of 348 medicines on the 2011 NLEM were
regulated under the 2013 DPCO. Some preliminary estimates suggested that the
coverage of the 2013 DPCO was 18% (Ray 2013). The medicines brought under
regulation were narrowly defined under the 2013 DPCO based on the active phar-
maceutical ingredient, the method of administration (e.g., tablet or injection) and the

72 4 The Proposed Design to Fix Ceiling Prices Under 2013 DPCO
dosage strength (e.g., 500 mg or 1000 mg)—and excluded other formulations of the
same medicine and its fixed-dose combinations from any regulation. The govern-
ment’s decision to implement such a partial, market-based, price-cap regulation
requires a clear specification of the manner in which the ceiling price will be
determined. We describe the primary method used for fixing the ceiling price and
alternative methods employed when the primary method cannot be implemented due
to practical difficulties.
4.3 The Primary Method for Fixing the Ceiling Price Under
2013 DPCO
Under the market-based approach, the ceiling price of a medicine is proposed, in

theory, to be the simple average of the prices of brands with at least 1% market share
in the market for a medicine formulation. The use of the prices of brands with at least
1% market share to determine the ceiling price, in theory, avoids the potential
inflation of the ceiling price if pharmaceutical firms launch higher-priced brands in
the period before regulation to influence the ceiling price. While the proposal
appears reasonable, in practice, several critical questions arise concerning the deter-
mination of the actual ceiling price. Which sources of data should the National
Pharmaceutical Pricing Authority (NPPA) use to identify market prices? What prices
should the NPPA use to determine the ceiling price? If prices at which retailers
purchase medicines are used to determine the ceiling price as opposed to the
maximum retail price, then how are the retail trade margins determined for the
regulated medicines? What time period should the NPPA use to determine the
market shares, as the identity of firms with more than 1% market share can change
from month to month? In the previous version of the DPCO, firms exploited
weaknesses to undermine the regulation. For example, Gulhati (2004) argues his-
torically India’s regulatory framework focused on the maximum resale price (MRP),
when they should have focused on other indicators, such as transfer prices. Anec-
dotal evidence suggests that there was sometimes a large gap between MRP and
transfer prices, meaning that companies could take advantage of this loophole
(Gulhati 2004). These are some of the many practical questions that arise during
the design and implementation of the policy and significantly affect its success.
To address these questions, India published the National Pharmaceutical Pricing
Policy of 2012 on December 7, 2012 (Government of India 2012). According to the
policy, the calculation of ceiling prices under 2013 DPCO is proposed to be based on
the IMS Health dataset. IMS Health is an American company providing information,
services, and technology for the healthcare industry across the world. Its Indian
subsidiary compiles monthly data on the sales and prices of major pharmaceutical
firms in India, disaggregated by individual medicine brands. According to the policy,
the actual calculation of the ceiling price is to be performed by the NPPA. To
determine the ceiling price, the NPPA is expected to calculate market shares for
4.3 The Primary Method for Fixing the Ceiling Price Under 2013 DPCO 73
the period May 2012 to April 2013, but use IMS prices for the month of May 2012 to
calculate the simple average of prices with more than 1% market share. At any time,
the Indian government is allowed to validate these data using an appropriate survey
or evaluation. Additionally, the government also has the possibility to collect its own
market-based data, and such data are considered final under all conditions. The 2012
policy also requires all manufacturers, retailers, and dealers, including those of
unregulated formulations, to issue a price list and supplementary price list showing
conformity with price fixation and revision. In addition, the 2012 policy determined
that the price at which retailers purchase the medicine is used to determine the
average price to the retailer, and then a retailer margin of 16% is proposed to be
added to obtain the final ceiling price. While the policy states these design choices,
the government’s thinking behind these choices, and the role played by various
interest groups remain unspecified and unclear.
In summary, the ceiling price is determined in two steps. First, the simple average
of price to the retailer (PTR) of all branded-generic and generic versions of a certain
drug formulation with a market share of at least 1% is calculated. This is done on the
basis of moving annual turnover of the particular drug. As a next step, a national
retailer margin of 16% is added to the average price to retailer calculated under step
one, using the following formula:
PðcÞ ¼ PðsÞ∗ð1 þ M=100Þ ð4:1Þ
where, P(c) is the ceiling price, and P(s) is the simple average of the price to retailers
for brands with more than 1% market share. The brands include all existing
manufacturers as well as importers and marketers. A margin (M) of 16% is added
to the simple average of the PTR. The ceiling price is scheduled to come into effect
within a period of 45 days after notification. All existing manufacturers of the same
formulation who are selling below ceiling price are required to maintain their
existing maximum resale price (MRP). The ceiling price for the regulated formula-
tions is calculated on the basis of dosage, that is, per one tablet or per one injection,
and price ceilings for stock keeping units with varying package sizes are calculated
as a simple multiplication with the number of tablets, capsules or injections in the
package. In India, every manufacturer of both regulated and unregulated formula-
tions is obliged to display the MRP of a certain formulation in ineffaceable print on
the package, which, in theory, can facilitate enforcement activities and compliance
with the DPCO. As Gulhati (2004) notes, the use MRP to fix price ceilings is
problematic, which may be a reason for why the NPPA chose to focus on the
PTR. However, the internal deliberations that led to these design choices remain
undisclosed to the wider public.
4.4 An Illustrative Example of the Method for Fixing

the Ceiling Price Under 2013 DPCO
We illustrate the determination of the ceiling price with an example. We use the case
of Paracetamol, a widely used medicine in India for treating pain and fever.
Paracetamol is one of the oldest and largest medicines sold in India by volume
having been launched in May 1973. One of its brands is the largest brand, by
volume, of any medicine in our Pharmatrac dataset (which we introduced in the
previous chapter and use throughout the rest of the book). During a period of
67 months between January 2011 and August 2016, nearly 2.5 billion tablets of
the largest Paracetamol brand, Calpol, were sold. During the period from May 2012
to April 2013, the year before the implementation of the 2013 DPCO, 118 different
SKUs of the 500 mg Paracetamol tablet brands were present in the market. Among
them, only 14 brands had a market share of at least 1%. They are shown in Table 4.1.
The first column lists the stock keeping unit (SKU) and the second column lists the
month and year of its launch. The third column contains the price to the retailer, and
the fourth computes the price per one tablet of the SKU.
The table illustrates the considerable variation in the price of Paracetamol price
per tablet among the 14 firms with more than 1% market share. Pacimol, at the top of
the table, contains 1000 tablets per SKU and it is sold at a PTR of 232.5, translating
to a per-tablet price of Rs. 0.23 (¼232.5/1000). The average of the column labeled
Price is 0.89, and the ceiling price is determined using Eq. (4.1) as 0.89*1.16 ¼ 1.03.
The ceiling price we computed is close to 0.99, the official ceiling price determined
by the NPPA based on the IMS Health dataset. The marginal difference in prices is
Table 4.1 List of Paracetamol 500 mg tablet SKUs with more than 1% market share during May
2012 and April 2013
Stock keeping unit Launch PTR PTR per tablet Margin
Pacimol 500 mg tablet 1000 Dec-97 233 0.23 30.11
Calpol 500 mg tablet 1000 Feb-95 319 0.32 41.57
T98 500 mg tablet 10 Aug-06 7.62 0.76 31.23
P 500 mg tablet 10 Mar-03 8.22 0.82 30.17
Malidens 500 mg tablet 10 Feb-84 8.77 0.88 31.13
Dolo (Micro Labs) 500 mg tablet 15 May-07 13.7 0.91 31.29
Pyrigesic 500 mg tablet 10 May-73 9.21 0.92 30.29
Calpol 500 mg tablet 15 Apr-09 13.8 0.92 30.15
Pacimol 500 mg tablet 10 Apr-89 9.39 0.94 29.93
Fepanil 500 mg tablet 10 Jun-73 9.88 0.99 30.06
Xykaa Rapid 500 mg tablet 10 Mar-10 10.1 1.01 31.21
Crocin 500 mg tablet 15 Apr-07 15.8 1.05 28.96
Metacin 500 mg tablet 8 Feb-92 8.5 1.06 31.18
Crocin Advance 500 mg tablet 15 Aug-11 23.8 1.59 26
Source: Author’s calculations
Data source: All India organization of chemists and druggists
4.5 Alternatives to the Primary Method for Fixing the Ceiling Prices 75
due to the differences between the IMS and Pharmatrac datasets the NPPA, and we
have employed respectively, but we will return to these differences in the next
chapter. It is useful to note that while many SKUs were launched years before the
2013 DPCO, the highest-priced SKU in the list was launched in August of 2011 and
its introduction inflates the ceiling price by pushing up the simple average of prices.
Although the NPPA provides a 16% retail margin over the PTR, each SKU has
provided a margin of around 30% in the period before the 2013 DPCO, where the
margin is calculated as 100*(MRP-PTR)/PTR. How these margins have changed as
a result of the DPCO is examined later in the book. The proponents of the cost-based
regulation point to the relatively low price of some Paracetamol brands compared to
the ceiling price, which suggests that the market-based method of determining the
ceiling price leads to a price cap that is several times the marginal cost of production.
We will return to these aspects as well later in the book. Nonetheless, the simple
method of fixing the ceiling price is not applicable in all cases. The NPPA has
devised alternative methods to fix the ceiling price in cases where there are insuffi-
cient firms to calculate a simple average. We discuss these exceptions in the next
section.
4.5 Alternatives to the Primary Method for Fixing

the Ceiling Prices
Under some conditions, the original stepwise calculation described in Sect. 4.3
cannot be implemented. For example, in cases where competition in a market for a
particular formulation is limited or even absent, the original method described above
would result in little to no reduction in average price to the retailer. To address such
scenarios, the NPPA has generated three alternative methods to determine the ceiling
price depending on whether other regulated strengths or dosage forms of the same
scheduled formulation are available (Table 4.2).
First, if there are other regulated strengths or dosage forms of the same scheduled
formulation, step 2 of the original method remains similar but the formula for
calculating the average price to retailer changes as follows:
PðsÞ ¼ Pm f1 ðPi1 þ Pi2 þ Þ=ðN∗100Þg:
The above formula first calculates Pi1, Pi2, and so on, which represent the
percentage reduction in price to the retailer that would have occurred if the price
ceiling mechanism were to be imposed on the unregulated dosage strength markets
of the medicine. Subsequently, an average of such price reductions across
unregulated dosage strength markets of the medicine is calculated, and it is multi-
plied by the medicine price in the regulated dosage strength market to determine the
ceiling price. Therefore, the average price to the retailer is no longer a simple average
of the prices of all versions of a drug formulation but uses the percentage difference
76
Table 4.2 Proposed calculation methods

Margin to
Calculation retailer
methods Average price to retailer P(s) Average price to retailer P(s) (M) % Price ceiling P(c)
Primary PðsÞ ¼ ðPi1 þ Pi2 þ Þ=ðN∗100Þ 16 PðcÞ ¼ PðsÞ:ð1 þ M=100Þ
method
Alternative 1 When other regulated strengths or dosage forms PðsÞ ¼ Pmf1 ðPi1 þ Pi2 þ Þ=ðN∗100Þg 16 PðcÞ ¼ PðsÞ:ð1 þ M=100Þ
of the same scheduled formulation are available
Alternative 2 When other scheduled formulations in the same PðsÞ ¼ Pmf1 ðPi1 þ Pi2 þ Þ=ðN∗100Þg 16 PðcÞ ¼ PðsÞ:ð1 þ M=100Þ
sub-therapeutic category are available
Alternative 3 When only other scheduled formulations in the PðsÞ ¼ Pmf1 ðPi1 þ Pi2 þ Þ=ðN∗100Þg 16 PðcÞ ¼ PðsÞ:ð1 þ M=100Þ
same therapeutic category are available
4 The Proposed Design to Fix Ceiling Prices Under 2013 DPCO
4.6 Formulations Covered Under 2013 DPCO 77
between the average PTR of other strengths and dosage forms and the highest priced
formulation within the medicine dosage market to be regulated.
Second, if no other regulated strengths or dosage forms of the medicine formu-
lation that is to be regulated are present in the market, other regulated formulations in
the same sub-therapeutic category are considered as a reference group. In such cases,
the average PTR in step 1 uses the percentage difference between the average PTR of
other formulations in the same category and the PTR of the highest priced formu-
lation within the medicine market to be regulated. When a particular formulation is
listed under multiple sub-therapeutic categories, the lowest average PTR across
categories is used for calculating the ceiling price.
Third, where no other strengths and dosage forms are available, and no other
scheduled formulations in any similar sub-therapeutic categories exist, the average
PTR is calculated using data from the same therapeutic categories. As with the
sub-therapeutic categories, when the regulated formulation is covered by multiple
therapeutic categories, the category average of the lowest PTR is considered.
4.6 Formulations Covered Under 2013 DPCO
Although some medicines are newly regulated under the 2013 DPCO, others carry
over into the revised price control regime from the earlier version in 1995. The 2013
DPCO proposes a special price ceiling calculation method for such regulated
formulations (also referred to as scheduled formulations). The 1995 DPCO contains
a First and Second Schedule listing specifying formulations under regulation. Addi-
tionally, the 1995 DPCO includes formulations that are fixed and notified up to and
after 31st, May 2012. Based on these distinctions, scheduled drugs under the pro-
visions of the 1995 DPCO are divided into four categories: (i) those specified in First
Schedule and notified under DPCO 1995 up to 31st, May 2012; (ii) those specified in
First Schedule and notified under DPCO 1995 after to 31st, May 2012; (iii) those not
specified in First Schedule and notified under DPCO 1995 up to 31st, May 2012;
(iv) and those not specified in First Schedule and notified under DPCO 1995 after to
31st, May 2012. In all categories, prices remain effective for 1 year from the date of
notification. For example, notifications up to May 31st, 2012 are applicable until
May 30th, 2013. Thereafter, the traditional calculation method for fixing ceiling
prices is applied. Only manufacturers of formulations in categories (i) and (ii) are
allowed to revise their prices as per the annual wholesale price index prior to price
fixation under the 2013 DPCO.
4.7 Price Fixation of New Drugs
In some cases, existing manufacturers of scheduled formulations introduce a new

drug. The ceiling price of the new drug is determined based on current availability of
the new drug in the domestic market. If the new drug is already available in the
domestic market, the traditional calculation method for price fixation is applicable.
The PTR of a new medicine that is not yet for sale in the domestic market is fixed by
the government based on the principles of “Pharmacoeconomics,” the branch of
economics that uses cost-benefit, cost-effectiveness, cost-minimization, cost-of-ill-
ness and cost-utility analyses to compare pharmaceutical products and treatment
strategies. A Standing Committee of Experts was formed to advise the Government
on the PTR of the new drug. Existing manufacturers launching a new drug are
obliged to request price approval from the government and are not permitted to sell
for prices higher than the ceiling price. For fixing the ceiling price of new drugs,
market-based data available for the month ending immediately before 6 months from
receipt of the application for fixing the price of the new drug is used.
4.8 Exceptions to the Standard Procedure Under

Paragraph 19 of the DPCO
Notwithstanding the preceding rules and alternative methods, the Indian government
reserved the right to fix the ceiling price or a specific retail price of any unregulated
formulation or brand under extraordinary circumstances that concern the public
interest. These circumstances are detailed under the 19th paragraph of the 2013
DPCO, and such powers were briefly invoked, albeit with mixed results, in 2014 to
control the prices of 108 cardiovascular and anti-diabetic medicines. Under the
Paragraph 19 provisions, the government can call for an increase or decrease in
the price ceiling to ensure optimal functioning of the regulation. In addition to
ensuring affordable prices, the 2013 DPCO also states as an objective adequate
availability and distribution of medicines. Consequently, whenever the ceiling price
of a certain formulation leads to lower production and distorted allocation, the
government is free to direct manufacturers to increase production and sell their
formulations to public institutions. Also, the government monitors prices of
unregulated medicines so that manufacturers do not increase the MRP of such
medicines by more than 10% within a period of 12 months before the start of
DPCO 2013. Although these safeguards are put in place to prevent shortages and
sudden prices increases in regulated or substitute medicines, the question remains
whether the prices of unregulated and regulated dosages of a medicine are similar or
vastly different, as the DPCO was implemented.
The provisions of the DPCO 2013 do not at all apply to new drugs that are
patented under the Indian Patent Act 1970 either as a product or process patent,
developed through domestic R&D and not produced elsewhere for a period of
References 79
5 years. However, manufacturers with a new and inventive delivery system of a new
drug are also exempted from the 2013 DPCO regulations. As noted in the introduc-
tion, the details on how to fix the prices of patented medicines remain under
discussion.
4.9 Revision of Price Ceilings in the Future
Once set, the ceiling prices do not remain constant forever. In April each year, when
India’s financial year begins, the Indian government is required to revise ceiling
prices of the regulated formulations. Subsequently, manufacturers have 45 days to
ensure that their MRP does not exceed the revised ceiling price. The list of medicines
in the 2013 DPCO are referred to as the first schedule, and the list can be amended by
adding an additional list of medicines, referred to as the second schedule. The
revision of ceiling prices for medicines in the first schedule is based on market-
based data available for “the month ending immediately before 6 months of notifi-
cation of revision in the first schedule.” Manufacturers may, once a year in April,
also increase the MRP on the basis of the wholesale price index. Such actions do not
require any approval from the government, but the manufacturers must provide
information about the revised MRPs. The government has the power to amend the
first schedule of the DPCO 2013 and introduce a second schedule under the
condition that reasons for amendment are clearly stated. The formulations that are
removed from the first schedule are categorized as non-scheduled formulations, and
they are no longer subject to price control regulation.
Additionally, every time the National List of Essential Medicines is revised,
ceiling prices for all medicines, including the ones that are already part of the old
list, are once again fixed. That is, the ceiling prices are determined afresh based on
the simple average of the prices of brands with more than 1% market share in the
1-year period before the revision of the ceiling prices. The procedure is followed
once every 5 years from the date of fixing the ceiling price under the 2013 DPCO or
when the NLEM is revised.
India used May 2012 prices to determine the ceiling prices initially and revised
the ceiling prices using data from August 2015, following the revision of NLEM
in 2015.
References
Government of India. (2011a). National list of essential medicines, 2011. New Delhi: Ministry of
Government of India. (2011b). National pharmaceutical pricing policy, 2011 (NPPP-2011). New
Delhi: Ministry of Chemicals and Fertilizers.
Government of India. (2012). National pharmaceutical pricing policy, 2012. New Delhi: Ministry
of Chemicals and Fertilizers.
Gulhati, C. M. (2004). Why drug price regulation. PharmaBiz [online]. Available from http://
Malhotra, P. (2010). The impact of TRIPS on India: An access to medicines perspective. London:
Palgrave Macmillan.
Chapter 5
Challenges with Fixing the Ceiling Price
Under the 2013 DPCO
5.1 Introduction
In the previous chapter, we elaborated on the design of the 2013 DPCO and the
procedure used for fixing ceiling prices under the newly-adopted market-based
approach. Although it may appear relatively simple, the determination of the ceiling
prices is associated with multiple challenges related to data availability, data selec-
tion, data collection, and data analysis. The lack of sufficient data and the use of
inaccurate data can result in a miscalculation of the ceiling prices and create
confusion among pharmaceutical companies, NGOs, and consumers, and lead to
several legal disputes. The effectiveness of the 2013 DPCO will be judged based not
only on the extent to which prices of essential medicines decline but also by
comparing the ceiling prices resulting from the market-based approach with those
that would result from using a cost-based approach. Soon after the implementation of
the 2013 DPCO, some industry observers argued that the ceiling prices set by the
NPPA were much higher relative to those resulting from a cost-based pricing
mechanism that was previously in place. They noted that the new policy “institu-
tionalized the super profits” (Alexander 2013a). The profit margins under the new
price ceilings were estimated to be over 1000% in some cases. Moreover, the NGOs
blamed the government for not sharing the data it collects from IMS and for not
collecting its own data and corroborating them with other alternative sources. Are
the criticisms of the 2013 DPCO design and implementation valid? In this chapter,
we take a quantitative approach to examining the challenges that arose in determin-
ing the ceiling prices based on the new design and in implementing the 2013 DPCO.
We begin by documenting the cases in which the pharmaceutical firms contested the
NPPA’s calculations and then present analyses to characterize the nature and extent
of such disputes.

82 5 Challenges with Fixing the Ceiling Price Under the 2013 DPCO
5.2 Pharmaceutical Firms Contested the Ceiling Prices

Fixed by the NPPA
Four years since the start of the DPCO 2013, several inaccuracies in determining the
ceiling price, which could defeat the purpose of the policy directive, have become
apparent. The Department of Pharmaceuticals received a number of review petitions
challenging the manner in which the NPPA calculated the ceiling price and seeking
alternative pricing for their products based on packaging or other characteristics
(Shankar 2016a). The NPPA began receiving such complaints as early as 2013, and
several firms have been successful in convincing the Department of Pharmaceuticals
that the NPPA’s calculations were incorrect, as PharmaBiz.com (2013a, b) reports:
The Delhi High Court has sent notices to the Centre and the National Pharmaceutical Pricing
Authority (NPPA) as seven more companies moved the court to question the newly revised
prices of formulations as per the Drug Price Control Order (DPCO) 2013. The Court sent
notices to the Centre and others including NPPA on a petition filed by the Indian Drug
Manufacturers Association (IDMA) on the issue of drug pricing. . .The companies are
Novartis, Wockhardt Limited, Lupin Limited, Intas Pharmaceuticals Limited, Alembic
Pharmaceuticals Limited, Sandoz Private Limited and Chiron Behring Vaccines Private
Limited. Cipla Ltd and four other companies had moved the court against the 2013 DCPO
and won the similar order from the High Court recently.
The basis for contesting the NPPA’s ceiling prices often involves issues about the
validity of the data used for determining the ceiling prices. For example, in February
2017, the Department of Pharmaceuticals advocated a re-fixation of the retail price
of a fixed-dose combination medicine, Teneligliptin 20 mg + Metformin 1000 mg
extended-release tablets, produced by Glenmark, as the NPPA previously used
incorrect data while fixing the retail price of these formulations. When the NPPA
revised the ceiling price using Pharmatrac data, the ceiling price increased by more
than 10% from Rs. 11.65 to Rs. 13.02 per tablet (Shankar 2017a).
We compile a list of 22 cases where the Department of Pharmaceuticals ordered
the NPPA to revise the ceiling price (see Table 5.1). We are not certain these are all
the cases that the NPPA received, but these cases have been reported in an online
trade journal, PharmaBiz.com. We found four cases in 2015, eight cases in 2016, and
nine cases in 2017, indicating that the number of such complaints is increasing. We
preview some of the objections raised unsuccessfully by the pharmaceutical compa-
nies. First, some drug companies have criticized the NPPA for failing to differentiate
the consumer and dispensing pack while calculating ceiling prices. In general,
dispensing packs are for use in hospitals and are therefore of larger size, sometimes
containing 1000 tablets of paracetamol as opposed to 10 tablets. Combining the PTR
of consumer and dispensing packs to work out average PTR for ceiling price
determination generates a lower ceiling price as packs show wide variation in PTR
per tablet or injection. For example, for Metoclopramide syrup 5 mg/5 ml consumer
packs have a PTR ranging between Rs. 0.38 per ml and Rs. 0.44 per ml, while the
PTR per unit of the dispensing pack is only Rs. 0.16 per ml. As Shankar (2014a)
notes:
The DPCO, 2013 does not distinguish between sales through retailer shop or through
hospital outlets. It is only the “Price to retailer,” which is captured by IMS, that is taken
5.2 Pharmaceutical Firms Contested the Ceiling Prices Fixed by the NPPA 83
Table 5.1 Department of Pharmaceuticals directs NPPA to revalidate data, re-fix ceiling price
under 2013 DPCO
Department of Pharmaceuticals’ directive to the NPPA Date Year
Review ceiling price fixed for Azithromycin 31-Oct 2013
Revalidate data on Ciprofloxacin tablet 250 mg 16-Feb 2015
Revalidate data on Cefotaxime 250 mg and 500 mg injections 4-Mar 2015
Revise prices of Ilaprazole + Domperidone capsules 3-Jun 2015
Re-fix price of Nab Tortaxel injection 28-Jul 2015
Re-fix ceiling price of Clotrimazole cream 1% 12-Jul 2016
Examine new data to review ceiling price of Erythropoietin injection 2000 IU & 18-Jul 2016
10,000 IU
Re-fix ceiling price of Azithromycin and Dexamethasone phosphate eye drops 30-Aug 2016
3 ml
Re-fix ceiling price of coagulation factor VIII 12-Sep 2016
Revise ceiling prices of Paclitaxel injection, Carboplatin, and Cisplatin 27-Sep 2016
Re-fix and re-notify ceiling prices of Cefotaxime 1 g injection 21-Oct 2016
Adopt correct methodology in fixing ceiling price of Ciprofloxacin 500 and 12-Dec 2016
250 mg tabs
Re-fix ceiling price of levoflexacin 500 mg 24-Oct 2016
Re-fix prices of Methotrexate 2.5 mg, 7.5 mg, and 10 mg tabs 3-May 2017
Re-fix ceiling price of Ondansetron 2 mg/ml injectables 5-Jan 2017
Revise ceiling price of formulation Methyldopa 500 mg tablet 12-Jan 2017
Re-fix ceiling price of Ranitidine 25 mg/ml 1-Jun 2017
Re-fix ceiling price of N-acetylcyseine 200 mg sachet 14-Aug 2017
Re-fix the ceiling price of Furosemide injection 31-Aug 2017
Re-fix ceiling prices of clomiphene 100 mg and 50 mg tablets 18-Sep 2017
Re-fix ceiling price of Co-Trimoxazole tablet 21-Sep 2017
Seek expert committee’s opinion for fixing ceiling price of methylprednisolone 3-Oct 2017
Inj 40 mg/ml
Source: Alexander (2013b), Shankar (2016b, c, d, e, f, g, h, i), Shankar (2017b, c, d, e, f, g, h, i, j, k)
into account for the calculation of ceiling price. Therefore, any such further classification or
exclusion of hospital sales may not be in line with provisions of DPCO, 2013.
Second, pharmaceutical firms argued that the NPPA included SKUs with less
than 1% market share in determining the ceiling price. Reacting to complaints, the
Department of Pharmaceuticals ordered the NPPA to follow the correct procedure in
fixing the ceiling price by averaging the prices of brands with more than 1% market
share rather than using aggregated market share at the company level (Shankar
2016d):
The Department of Pharmaceuticals (DoP) has directed the NPPA to adopt the correct
methodology in all such cases of calculating the ceiling price of scheduled formulations
like ciprofloxacin 500 mg and ciprofloxacin 250 mg tablets as per para 4(i) of DPCO, 2013
and provisions of existing Schedule-I by including market shares of only generic/brands and
not company-wise MAT [moving average turnover] percentage.
Third, pharmaceutical firms argued that the NPPA did not follow its own rules
in determining the ceiling price by excluding newly entering SKUs with more than
1% market share. Responding to one case, where Volitra AQ injection containing
75 mg/ml diclofenac produced by Sun Pharmaceuticals was excluded from the
calculation of the ceiling price, the Department of Pharmaceuticals asked the
NPPA to not invent its own rules (Shankar 2017j):
Review application of the company is accepted, and NPPA is directed to re-fix the price as
per the provisions of DPCO 2013 within one month of this Order, rather than deciding the
prices on its own derived principles which are beyond the provisions of DPCO 2013. The
calculation sheets should also be put up in the public domain.
In a similar case, Torrent Pharmaceuticals argued that it intends to market Nab

Tortaxel injection 100 mg, which is being manufactured by Panacea Biotech
(Shankar 2015a). Torrent markets Paclitaxel injection, but the NPPA did not take
into account the new SKU in determining the ceiling price. Torrent also argued that
Zydus is also marketing the formulation supplied by Panacea at a retail price of
Rs. 11,640, but it is ignored.
Fourth, pharmaceutical companies argued that the PTR used by the NPPA is
incorrect. For example, Alkem argued that IMS Health did not revise its data after
the company revised its prices based on the wholesale price index, as stated under
paragraph 10 of the 2013 DPCO (Shankar 2015b).
Fifth, many pharmaceutical companies compared IMS and Pharmatrac figures to
contest the ceiling prices. For example, Zydus argued that its 250 mg ciprofloxacin
tablets sold under the brand name Cirpobid were ignored by the NPPA although the
Pharmatrac data show that the brand has a market share of 23% (Shankar 2015c).
Similarly, Baxter India argued that its SKU with more than 80% market share was
not considered in determining the ceiling price for the medicine, Coagulation Factor
VIII (Shankar 2016f).
Sixth, some cases involved pharmaceutical firms questioning whether the
NPPA mistakenly determined the ceiling price of some medicines using alternative
methods described in Chap. 4. For example, Aristo argued that the ceiling price of the
combination medicine ilaprazole + domperidone was fixed under the assumption that
the market was a monopoly, but there were five SKUs with more than 1% market
share (Shankar 2015d). Similarly, Glenmark argued that NPPA missed several rele-
vant SKUs in determining the ceiling price of Clotrimazole cream (Shankar 2015e).
Seventh, in many cases the NPPA used company-level market share rather than
SKU-level market share in determining the ceiling price. For example, Sun Pharma-
ceuticals argued that the ceiling price of Ciprofloxacin was incorrectly established by
using 13 and 15 SKUs for the two different doses, but only 8 SKUs were relevant.
The NPPA, it was alleged, included some SKUs no longer marketed by the company.
Eighth, several companies raised questions about the manner in which the NPPA
dealt with the pricing of injections. For example, Cadila argued that liquid injection
and powder injection prices should be set differently (Shankar 2017k).
Although the Department of Pharmaceuticals has directed the NPPA to revise the
ceiling price in a few cases documented above, there are a large number of instances
where the Department of Pharmaceuticals and the NPPA refused to revise the ceiling
5.2 Pharmaceutical Firms Contested the Ceiling Prices Fixed by the NPPA 85
Table 5.2 Department of Pharmaceuticals rejects the review petitions challenging the NPPA’s
method of calculating ceiling prices
Company Medicine regulated under DPCO 2013 Date Year
Dr. Reddy’s Omeprazole 20 mg capsules 29-Oct 2013
Abbott Phenobabitone tablets, 60 mg, and 30 mg and 29-Oct 2013
promethazine injection, 25 mg/ml
Sun Pharma Isosorbide 5 mononitrate tablet (10 mg), pantoprazole 6-Jan 2014
injection (40 mg), ondansetron injection (2 mg/ml)
atorvastatin tablets (10 mg) and alprazolam tablets
(0.25 mg)
Unichem Warfarin sodium tablets (5 mg), olanzapine tablet 6-Jan 2014
(10 mg), albendazole tablets (400 mg), albendazole
suspension (200 mg/5 ml), atorvastatin tablets (10 mg),
alprazolam (0.25 mg), tramadol capsule (50 mg),
cetrizine tablets (10 mg) and alprazolam (0.5 mg).
Panacea Biotec Oral Poliomyelitis Vaccine (LA) Solution 6-Jan 2014
Win-Medicare Povidone iodine oinment 5% 6-Jan 2014
Modi-Mundipharma Povidone iodine oinment 5% 6-Jan 2014
Wockhardt Povidone iodine solution 5%, povidone iodine ointment 10-Jan 2014
5% and human insulin injections
Albert David Glucose Injection 10% 27-Feb 2014
Baxter, etc. Ringer lactate injection 27-Feb 2014
Indi Pharma Clindamycin tablets (300 mg) 27-Feb 2014
Gland Pharma Heparin sodium injection (5000 IU/ml); 27-Feb 2014
Adcock Ingram Metoclopramide injection 5 mg/ml; 27-Feb 2014
Synchem Oral rehydration salts powder for solution 27-Feb 2014
Laboratories
Neon Laboratories Lignocaine hydrochloride + adrenaline injection 27-Feb 2014
(2% + adrenaline 1:200000)
Lifestar Pharma Calamine Lotion 14-Mar 2014
Kedrion S.p.A Antitetanus human immunoglobulin 250 IU/pack 14-Mar 2014
Ranbaxy Ciprofloxacin HCl injection 27-May 2015
Parenteral Drugs Glucose inj 10% & mannitol 20% 100 ml 8-Jun 2015
Lifecare Amphotericin B injection 8-Jul 2015
Innovations
Panacea Biotec Amphotericin B injection (50 mg) 16-Jul 2015
Pregna Hormone Releasing IUD 27-Jul 2016
Abbott India Carbimazole 10 mg tablet 4-Oct 2016
Sanofi Amiodarone tablet 200 mg 14-Nov 2016
Micro Labs Paracetamol 500 mg tablets 24-Nov 2016
Sun Pharma Ciprofloxacin HCl tablet 250 mg 6-Dec 2016
Sanofi India Sodium valproate 200 and 500 mg tabs; amiodarone 23-Dec 2016
tablets 100 mg; leflunomide 10 and 20 mg tabs
Sun Pharma Volini Duo (Acetaminophen 650 mg extended-release 27-Dec 2016
tablets)
Sun Pharma Ondansetron tablet 2-Jan 2017
USV Amlodipine 5 mg, clopidogrel 75 mg tablets 30-Jan 2017
(continued)

Company Medicine regulated under DPCO 2013 Date Year
IPCA Paracetamol tablet 6-Mar 2017
Sanofi India Enoxaparin 40 mg/0.4 ml and enoxaparin 60 mg/0.6 ml 10-Mar 2017
Boehringer Hyoscine butyl bromide injection 25-Apr 2017
Ingelheim
Wockhardt Povidone iodine solution 5% 24-May 2017
Sun Pharma Lithium 300 mg 23-Jun 2017
Source: PharmaBiz.com
price based on questionable claims made by the pharmaceutical firms. We list such
instances in Table 5.2. These disputes also provide a window into the challenges
faced by the NPPA in implementing the 2013 DPCO and the tactics and strategies
employed by the pharmaceutical companies. We document relatively more com-
plaints that were rejected by the Department of Pharmaceuticals than those that were
accepted, indicating that the pharmaceutical companies used the legal process to
delay compliance with the regulation and also weaken enforcement. Francis (2014)
summarizes the difficulty the Department of Pharmaceuticals and the NPPA expe-
rienced in fixing the ceiling prices under the 2013 DPCO:
As in the case of earlier DPCOs, Department of Pharmaceuticals and National Pharmaceu-
tical Pricing Authority are finding it difficult to fix and enforce new prices for 348 drugs
covered under DPCO 2013 even after several months of its notification. Wherever NPPA
finds scope for a reduction or only a marginal hike in prices of products, such decisions are
challenged by the pharmaceutical companies seeking higher prices. Over two dozen large
companies have already disputed ceiling prices fixed for several products and approached for
a review during the last six months. Some of these companies are Sun Pharma, Unichem
Labs, Panacea Biotec, Win-Medicare, Albert David, Baxter (India), Indi Pharma and Gland
Pharma. In many cases, DoP or NPPA rejected the claims of these companies seeking higher
prices for want of justification.
In the rest of the chapter, we examine using Pharmatrac data the nature and extent
of these disputes between the NPPA and the pharmaceutical firms.
5.3 Disputes Due to Lack of Authentic Data
The NPPA fixed the ceiling price of 150 medicines on June 14, 2013, and 39 med-
icines on June 21, 2013, using the data provided by IMS Health. The NPPA also
made public the calculations it performed to arrive at the ceiling price. The NPPA’s
reliance on the data collected by IMS Health has been criticized by several observers.
For example, Francis (2014) notes:
Now, the leading pharmaceutical companies are pointing out that the basis of price fixation
by NPPA is not accurate as they consider IMS Health data used by NPPA does not represent
the real prices. Following these complaints, DoP has directed NPPA to revalidate the data
5.3 Disputes Due to Lack of Authentic Data 87
used for capping prices of all notified medicines. NPPA accordingly started seeking cost
details of drugs from individual companies. Till then drug prices notified by NPPA has to be
maintained by the companies. . . The basic problem with the NPPA is that it does not have
reliable data for finalizing prices of controlled drugs as it is solely depending on IMS Health.
Out of the 348 drugs, NPPA is yet to fix prices of 100 odd drugs for want of data. Some of
the pharmaceutical companies are of the view now that the basis of price fixation by NPPA is
not accurate as they consider IMS Health data used by NPPA does not represent the real
prices.
Similarly, Phadke and Srinivasan (2013) note:

The datasets of IMS Health are from a provider of information related to the pharma
industry, and are methodologically neither robust nor reliable, and limited in its coverage.
To study the potential discrepancy in the ceiling prices resulting from alternative
data sources, we compare the ceiling prices determined by the NPPA for the first
batch of medicines in June 2013 with alternative price ceilings we calculated using
the AIOCD’s Pharmatrac data. To illustrate the differences between the two datasets,
we begin by focusing on the case of Acyclovir, as it is the first item contained in the
work sheet released on the 14th of June 2013.1 We reproduce in Table 5.3 calcula-
tions presented by the NPPA as well as the prices and market shares observed in the
Pharmatrac data. Table 5.3 contains 16 SKUs from the IMS data used by the NPPA,
of which eight have more than 1% market share. The average of the per tablet PTR
for these eight SKUs is Rs. 5.3 and an addition 16% retailer margin results in a
ceiling price of 5.3 1.16 ¼ 6.14. However, the NPPA considers 11 SKUs to fix the
ceiling price at 7.3, nearly 19% more than the ceiling price of 6.14. We will return to
this discrepancy in greater detail momentarily, but seven of the 16 SKUs in the IMS
data are not present in the Pharmatrac data, and six of the 15 SKUs in the Pharmatrac
data are not present in the IMS data. Nonetheless, there are some similarities between
the numbers obtained from the two datasets. For example, Cipla’s Acivir brand has
the highest market share in both datasets, although there is a 3.3% difference in
market share. In fact, the top four SKUs remain the same in both datasets. In
addition, the PTR per tablet also matches in several cases between the two tablets.
Many of the SKUs of Acyclovir missing from both datasets are relatively small
with market shares of less than 1%, indicating that such inconsistencies between
datasets do not necessarily affect the ceiling price for this medicine. However, the
market shares computed using the two methods differed significantly in two of
the top three SKUs. There are also some differences in PTR between the two tables.
Overall, there are eight SKUs, whose average per-tablet price is 5.77 and the result-
ing ceiling price would be 5.77 1.16 ¼ 6.69. Although the ceiling price deter-
mined using the AIOCD Pharmatrac data is higher than that obtained from the IMS
data, it is still lower compared to the ceiling price fixed by the NPPA.
The NPPA’s difficulty in fixing the ceiling prices of several medicines came to
light because it was not able to put together sufficient market data. For example, at
1
The NPPA’s worksheet displaying their calculations for determining the ceiling price is available
online at: http://www.nppaindia.nic.in/ceiling/press14june13/workingsheet-14-6-13.html
Table 5.3 Comparing the ceiling prices for Acyclovir 200 mg using IMS Health and AIOCD
Pharmatrac prices and market shares
PTR Share PTR Share
Data source
No Company SKU IMS Pharmatrac
1 Cipla Acivir Tabs Dispers 200 mg 10 6.19 39.8 6.19 43.1
2 Glaxosmithkline Zovirax Tab Uncoated 200 mg 5 6.52 21.1 6.52 20.64
3 Fdc Ocuvir Tabs Dispers 200 mg 10 4.84 11.7 4.84 15.75
4 Torrent Pharma Herpex Tab Uncoated 200 mg 10 6.72 9 6.66 6.64
5 Fdc Ocuvir Tab Uncoated 200 mg 10 4.84 8
6 Micro Labs Herperax Tab Uncoated 200 mg 5 5.1 4.4 5.1 4.91
7 Mankind Herpikind Tabs Dispers 200 mg 10 3.27 3.6 4.56 4.94
8 Veritaz Acivex 200 mg Tablet Dt 10 6.2 1.25
Healthcare Ltd
9 East India Trikase 200 mg Tablet 10 4.97 1 6.05 1.07
10 Ind-Swift Aclovir Tabs Dispers 200 mg 10 3.29 0.6 1.85 0.03
11 Micro Labs Herperax Tab Uncoated 5.08 0.5 2.55 0.76
200 mg 10
12 Samarth Pharma Axovir Tabs 200 mg 10 4.11 0.4
13 Micro Labs Herperax Tabs 200 mg 6 14.81 0.1
14 Agio Pharma Aciherpin Tabs 200 mg 10 4.57 0
15 East India Trinase Tab Uncoated 200 mg 10 5.64 0
16 Vhb Lifesciences Zoylex Tabs Dispers 200 mg 10 5.84 0
17 Maneesh Pharma Clovirax Tabs Dispers 200 mg 5 4.68 0
18 Ipca Laboratories Pvt Ocurax 200 mg Tablet 10 5.03 0.33
Ltd.
19 Alkem Laboratories Herpesafe 200 mg Tablet Dt 5 4.88 0.23
Ltd.
20 Monichem Healthcare Zovistar 200 mg Tablet 10 4.58 0.15
Pvt Ltd
21 Alkem Laboratories Herpesafe 200 mg Tablet Dt 10 2.44 0.12
Ltd.
22 Dial Pharmaceuticals Rivol 200 mg Tablet 10 4.59 0.03
Pvt. Ltd.
the beginning of 2017, the government responded to the public pressure to regulate
the prices of coronary stents, but the NPPA faced difficulties in compiling the data on
prices (Shankar 2017l). Since pharmaceutical firms want to keep their orders private,
the collection data on market shares has been challenging for the NPPA even during
the implementation of the 1995 DPCO. Over the years, most pharmaceutical com-
panies and importers have been reluctant to share authentic, accurate industry data
with the Indian government. If such data are compiled, the NPPA can potentially use
them to improve compliance with price controls. The non-cooperation by drug
companies has forced the NPPA to develop its own database of pharmaceutical
5.4 Challenges with Older Stocks and Labeling Price-Controlled Medicines 89
prices, called the Indian Pharmaceutical Database Management System (IPDMS) in

2015. As Alexander (2013c) notes,
With a view to further tightening the monitoring process of prices of non-scheduled
formulations in the market, the National Pharmaceutical Pricing Authority (NPPA) has
started collecting information directly from the drug manufacturers. “NPPA has already
taken initiative to collect information directly from the manufacturers. Almost 7000 manu-
facturers have already been addressed to submit required information. Moreover, making a
provision for filing of information online will further facilitate collection of information,”
sources said. Currently, the NPPA depends fully on samples collected by a single agency –
IMS Health- to monitor and fix the prices as the agency has not sufficient staffed to gather
samples from the market on its own. The new move is aimed at reducing the dependency on
IMS in the long run.
The NPPA has also moved away from the use of data exclusively from
IMS Health in its subsequent revisions of the ceiling prices. According to Shankar
(2017m):
Ceiling price has been fixed based on the data provided by IMS for the month of May, 2012
under NLEM 2011 and the data provided by [AIOCD] pharmatrac for the month of August,
2015 under NLEM 2015 as per existing practice.
The problems, however, have continued to arise even in the recent revision of
ceiling prices in 2015. To illustrate further, consider the case of fixing the ceiling
prices for Abbott’s Clomiphene 50 mg and 100 mg tablets. Abbott argued that NPPA
used Rs. 104.64 as PTR for Clome 100 mg tablet 10s, but the correct PTR from
August 2015 is Rs. 107.56 (Shankar 2017h). Also, Abbott claimed that NPPA
incorrectly used the same PTR for both Fertomid 100 mg Tablets 10s and Fertomid
100 mg Tablets 5s of Cipla in calculating the ceiling price but the IMS data contain
only the Fertomid 100 mg tablets 5 SKU. Similarly, Abbott argued that to determine
the ceiling price of Clomiphene 50 mg, the NPPA used the same PTR for Ovafar
50 mg Tablets 10s and Ovafar 50 mg Tablets 5s of Organon but IMS data contain
only the 5-pack.
5.4 Challenges with Older Stocks and Labeling

Price-Controlled Medicines
The NPPA’s 2013 DPCO notification states that the revised prices must be
implemented within 45 days from the date of fixing the ceiling price but does not
address the presence of older stock of price-regulated medicines on the market.
Pharmaceutical companies, as well as pharmacies, have complained that it is costly
to relabel or recall stock with the older price printed on their packages. Many
pharmaceutical firms did not provide a list of revised prices to retailers, which
resulted in retailers charging relatively higher, older prices. The problem has
persisted since the initial implementation in 2013 due to the annual revision of the
ceiling prices and the issue remained unresolved 3 years later. In April 2016, the
NPPA determined that recalling, re-labeling of medicine stocks before price revision
is not mandatory if manufacturers submit a revised price list and ensure compliance
with the revised prices at the retailer level. However, the retailer trade association,
the AIOCD, argued that the responsibility of displaying accurate prices lies with
manufacturers. According to the president of the AIOCD (Rana 2016):
We have found that some of the manufacturers though have reduced the prices only in their
invoices as per NPPA guideline but physically supplying the products with old MRPs to
dealers and asking the distributors or retailers to sell it at lesser price. They are informing
distributors to circulate this information to retail chemists. This is absolutely not acceptable,
because manufacturers have failed to provide the price lists to retail chemists as mandated in
DPCO-2013 and can expose retail chemists to legal action in case of oversight by
them. . .We have urged NPPA to ensure that they do not force our members to accept the
stocks having higher than ceiling price. We will appreciate if all such products having higher
than ceiling price are recalled from the trade and re-labelled with new price. Also issue new
price list up to retail chemist as well. This will remove any ambiguity and help to establish a
uniform system for better compliance.
The AIOCD suggested to the NPPA that providing a window of 90 days can mitigate
these practical difficulties. The secretary of the Federation of Gujarat State Chemist
& Druggist Association (FGSCDA), a state affiliate of the AIOCD, pointed out
(PharmaBiz.com 2013a):
It is needless to say that the issue of 45 days time frame set by NPPA for printing new prices
on the old stocks had been a contentious issue from the very beginning, creating a lot of
confusion among all the stake holders. What is more disturbing is the fact that as traders we
have been left clueless on what our role was in this set-up. While the pharma companies
insisted that it is impossible to recall and re-label the drugs within such a short time, the drug
regulators desisted us from selling drugs, putting us in a spot. This lead to a lot of chaos, as
there was a fear of unavailability of life saving drugs, as recalling stocks from villages and
other remote areas needed much more time and elaborate planning.
Citing difficulties in implementing the DPCO order in 45 days, companies such

as Cipla and Sun Pharma received temporary relief from the Delhi high court. The
Drug Controller General of India (DGCI) responded by allowing companies to
re-label existing stock of unsold medicines with the new prices specified under the
2013 DPCO, instead of recalling the current stock with incorrect prices and changing
the packaging (Alexander 2013d). The NPPA reacted to reports that some retailers
are returning stocks that do not have revised prices by urging them not to do so
(Shankar 2016j):
Concerned over the reports that some stockists and trade associations are showing resistance
in selling medicines without re-stickering/re-labelling by the manufacturers as per the
revised notified prices of drugs, the National Pharmaceutical Pricing Authority (NPPA)
has directed the dealers including stockists and retailers not to return any stocks in case
current price list as per revised notified price has been made available to them by the
manufacturers. In a veiled warning to the stockists and retailers, the national drug price
regulator said that any attempt by the retailers to return the stocks to the manufacturers for
not re-labelling or re-stickering will be a violation of para 28 of the DPCO, 2013 if the
current price list as per the revised notified price of drugs has been provided by the
manufacturers.
Eventually, the NPPA and the industry reached an agreement that allowed the
sale of older stocks of regulated medicines at older prices based on the date of
5.5 Challenges with Identifying SKUs with More Than 1% Market Share 91
manufacturing. According to Yadav (2016), DoP finally agreed with the AIOCD’s
demand for allowing the sale of medicines at prices before the price revision comes
into effect until a certain manufacturing serial number expires. The NPPA further
clarified that if the manufacturers show evidence sending the revised price list to the
retailers or distributors, and if they sell the medicine above the ceiling price then the
burden of noncompliance falls only on the distributors and retailers (Shankar
2017k).
The NPPA undertook efforts to collaborate with the pharmaceutical industry in
developing a labeling method to distinguish price-controlled medicines. The NPPA
argued that such an identification mark promotes awareness among consumers about
the presence of lower-priced medicines (Vijay 2015). Also, the measure was
expected to increase vigilance, accountability, and self-regulation (Shankar 2014b).
Shankar (2014b) reports that the NPPA invited feedback from stakeholders such as
the pharmaceutical industry, trade associations, consumer groups, and state drug
controllers. The pharmacists soon opposed the measure, arguing that there is already
considerable information provided on the package (Shankar 2014c). The IDMA also
opposed the measure suggesting that any identification mark would cause confusion,
ill-will, and chaos among consumers (Nautiyal 2014). The NPPA ultimately rolled
back the proposal to introduce distinguishing marks (Shankar 2015e).
5.5 Challenges with Identifying SKUs with More Than 1%

Market Share
The NPPA’s calculations revealed that in some cases it did not follow the rules it
designed to fix the ceiling price. For example, the DoP directed the NPPA to
exclusively consider the formulations with a market share of 1% or more for
calculation of price ceilings. The directive to the NPPA was the result of many
complaints from manufacturers arguing that the NPPA sometimes averages PTRs
across multiple brands instead of the PTR for a specific formulation with more than
1% market share. As noted in Table 3.3 in Chap. 3, several companies produce
multiple brands of a medicine and sell at vastly different prices, and typically the
brand with more than 1% market share has the largest price. In such cases, the NPPA
clubbed together the market share of multiple versions of a medicine produced by a
company, while the single brand/generic version of the same medicine of this
company has a market share of less than 1%. For example, in one case, the DoP
asked the NPPA to reexamine IMS data on ciprofloxacin hydrochloride 0.30%
drops. Responding to such mistakes by the NPPA, the Indian Pharmaceutical
Alliance (IPA) secretary general D G Shah noted in a letter to NPPA chairman C
P Singh (Shankar 2013):
However, we understand that the first lot of prices being notified is calculated using brands
and generic versions having less than one per cent market share for companies having more
than one brand. This is contrary to the above noted provisions and could distort the balance
sought to be achieved by the NPPP 2012.
We examine the NPPA’s calculations for fixing the ceiling prices of several other
medicines and find that the primary method described in Sect. 4.2 of the book is
correctly applied. For example, the calculations for Adenosine Injection 3 mg/ml,
shown in Table 5.4, involve five SKUs, each with more than 1% market share. The
average of the last column of 5.4 containing PTR per unit is 98.75, and the ceiling
price is calculated accurately as 98.75 1.16 ¼ 114.55. Similarly, the calculations
for fixing the ceiling price for Adrenaline Bitartrate 1 mg/ml injection, also shown in
Table 5.4, appears to be accurate as well. While there are eight SKUs, only seven
have a market share of more than 1% and their average PTR is 32.11, and the ceiling
price is 32.11 1.16 ¼ 37.24. Nevertheless, in several cases, the calculation of the
ceiling price does not match with the procedures determined under the DPCO 2013.
Similar problems arose even in the revision of ceiling prices in 2015. As Shankar
(2017h) notes:
During examination, the reviewing authority DoP noted that the NPPA has taken into
account certain formulations having MAT value of less than 1%. NPPA may be directed
to consider only those medicines/formulations having MAT value of more than 1% market
share, as DPCO does not recognize a company for average PTR but only medicines/
formulations.
Shankar (2017c) notes that the DoP asked the NPPA to re-fix the ceiling price
of “Methotrexate tablets 2.5 mg, 7.5 mg and 10 mg” by considering only eight
formulations with SKU-wise MAT of more than 1% market share. Similarly,
Shankar (2017n) notes that Sun Pharma complained with the NPPA that Mankind
Pharmaceuticals’ Lubistar CMC forte 1% 10 ml eye drops with less than 1% was
considered in the ceiling price calculation.
Table 5.4 The accuracy of the NPPA calculations for Adenosine Injection 3 mg/ml and Adrenaline
Bitartrate Injection 1 mg/ml
No Company SKUs for Adenosine Share PTR
Adenosine
1 Sanofi Adenocor Inj Iv. Vial 6 mg 2 ml 1 81.70% 163.8
2 Samarth Pharma Carnosine Inj Iv. Amp 6 mg 2 ml 1 9.30% 80
3 Sun Adenoject Inj Amp 3 mg 2 ml 1 (/1 ml) 3.80% 83.93
4 Sun Adenoject Inj Amp 3 mg 10 ml 1 (/1 ml) 3.80% 78.11
5 Troikaa Pharma Tachyban Inj Amp 3 mg 2 ml 1 (/1 ml) 1.40% 87.96
Adrenaline Bitartrate
1 Neon Labs Norad Inj Amp 2 mg 2 ml 1 40% 38
2 Samarth Pharma Adrenor Infus Amp 2 ml 1 39% 50.05
3 Neon Labs Vasocon Inj Amp 1 mg 1 ml 1 (/1 ml) 16% 10.15
4 Sunways Epitrate Inj 1 ml 1 2% 11.71
5 Sunways Epitrate Inj 1 ml 10 2% 6.73
6 Alkem Dianora Amp. 1 mg 2 ml 1 (/1 ml) 1% 62.13
7 Neon Labs Norad Inj Iv. Amp 1 mg 4 ml 1 (/1 ml) 1% 45.99
8 Cipla Infunor Infus Amp 1 mg 2 ml 1 (/1 ml) 0% 54.22
5.6 Quantitative Analysis of the Impact of Using IMS vs. AIOCD Pharmatrac Data 93
5.6 Quantitative Analysis of the Impact of Using IMS

vs. AIOCD Pharmatrac Data
Since the NPPA’s reliance on the IMS data can be questioned, we have recalculated
the ceiling prices of 150 medicines for which the NPPA fixed prices on June
14, 2013. We rely on the Pharmatrac data to calculate the ceiling prices. These
data are collected by the pharmaceutical retailer trade association, the AOICD,
which many observers claim are more reliable and exhaustive compared to the
IMS Health data, as the AIOCD membership of wholesalers and retailers are more
conscientious in reporting data to the AIOCD. We compare the ceiling prices
obtained from the AIOCD data using the traditional approach with the ceiling prices
obtained from using the IMS data. Our calculations reveal discrepancies between the
ceiling prices obtained using both datasets. Not only do the final price ceilings
significantly differ, but also the details of the calculation and the component SKUs
that constitute the determination of the ceiling price substantially differ in several
cases.
We present the results of the analysis in Table 5.5. Our determination of the
ceiling price is based on the primary method described in Sect. 4.1. However, for
12 medicines such as Adenosine 3 mg/ml Injection, there is only one producer in the
AIOCD data that has more than 1% market share, and alternative methods have been
employed by the NPPA to determine their ceiling price, as described in Chap. 3. We
exclude these medicines from the analysis in Table 5.5. We also exclude a small
number of medicines for which we could not find a match in the AIOCD data.
For each medicine in Table 5.5, column 1 contains the ceiling price fixed by the
NPPA using the IMS data. Column 2 contains the number of SKUs in the NPPA list,
and Column 3 contains the number of SKUs in the NPPA list with more than 1%
market share. Column 4 contains the ceiling price determined using the AIOCD data.
Column 5 contains a hypothetical ceiling price calculated using the prices of firms
with less than 1% market share, which are currently excluded from influencing the
ceiling price. The total number of firms in the market is shown in Column 6, and the
number of firms with more than 1% market share is shown in Column 7. The
difference between the IMS and AIOCD ceiling prices is shown in Column 8. To
provide a concrete example, the ceiling price of Acyclovir 200 mg Tablets is
determined by the NPPA to be Rs. 7.3 per tablet. The AIOCD-based ceiling price,
however, is determined to be Rs. 6.69, 8% less than the NPPA’s ceiling price. While
there are 15 firms present in the market, eight of them have more than 1% market
share in the AIOCD data, and they account for determining the ceiling price in
column 4. The difference between the two ceiling prices, shown in column 6, is
Rs. 0.61 for Acyclovir 200 mg Tablets. Overall, Table 5.5 contains 129 medicines,
and among them, the NPPA ceiling price is greater than the AIOCD ceiling price for
48 medicines and less for 77 medicines. The ceiling prices exactly match in the case
of four medicines, Enalapril Maleate Tablets 2.5 mg, Hyoscine Butyl Bromide
Injection 20 mg /ml, Metoclopramide Injection 5 mg/ml, and Permethrin Cream 5%.
The NPPA excluded the prices of SKUs with less than 1% market share during
May 2012 to April 2013 from the process of determining the ceiling price. One
Table 5.5 Comparison of Ceiling Prices based on IMS and AIOCD data
94
Column 1 2 3 4 5 6 7 8
Composition as per NLEM NPPA ceiling N of firms N of firms AIOCD AIOCD ceiling N of N of firms Difference in
price in Rs. in NPPA with > 1% ceiling price price based firms firms in with > 1% ceiling price
list market share in Rs. with < 1% market AIOCD market share (1)–(2)
in NPPA list share in Rs. list in AIOCD list
Acyclovir Tablets 200 mg 7.3 16 8 6.69 4.3 15 8 0.61
Alpha Interferon Injection 3 million IU 759.7 4 4 692.88 464 5 4 66.82
Amiodarone Tablets 100 mg 6.52 8 6 6.37 2.74 8 6 0.15
Amiodarone Tablets 200 mg 11.67 8 7 11.7 7 7 0.03
Amitriptyline Tablets 25 mg 2.12 21 9 2.53 2.24 25 8 0.41
Ampicillin Powder for suspension 125 mg/5 ml 0.63 7 3 0.15 0.07 4 3 0.48
Anti-D immunoglobin (human) Injection 300 μg 2209.8 3 2 1886.64 5046 4 3 323.16
Atenolol Tablets 100 mg 3.72 25 7 4.12 2.17 12 6 0.4
Atorvastatin Tablets 5 mg 3.82 32 19 4.06 3.72 30 14 0.24
Atracurium besylate Injection 10 mg/ml 45.28 13 5 48.2 6 6 2.92
Atropine Sulphate Injection 0.6 mg/ml 4.01 4 3 5.41 3 3 1.4
Azathioprine Tablets 50 mg 9.89 9 3 9.86 7.23 9 5 0.03
Azithromycin Injection 500 mg 182.27 8 7 47.15 6 6 135.12
Azithromycin Tablets 500 mg 19.86 149 24 20.56 18.65 185 22 0.7
Betaxolol Hydrochloride Drops 0.5% 6.59 3 3 6.98 4 4 0.39
Carbimazole Tablets 10 mg 3.43 4 3 3.13 2.78 4 3 0.3
Carbimazole Tablets 5 mg 1.77 3 3 1.81 1.67 4 3 0.04
Ceftazidime Injection 250 mg 63.4 10 4 42.63 46.46 8 6 20.77
Clofazimine Capsules 100 mg 2.22 3 3 2.43 3.36 3 2 0.21
Clofazimine Capsules 50 mg 1.28 3 2 1.21 1.49 3 2 0.07
Clomiphene citrate Tablets 100 mg 12.18 10 7 14.27 10.17 11 8 2.09
Colchicin Tablets 0.5 mg 2.88 2 2 3.09 0.97 3 2 0.21
Cyclophosphamide Tablets 50 mg 3.75 3 2 4.09 2 2 0.34
5 Challenges with Fixing the Ceiling Price Under the 2013 DPCO
Cyclosporine Capsules 25 mg 24.75 7 6 26.29 5 5 1.54
Cyclosporine Capsules 50 mg 48.26 8 8 48.96 4 4 0.7
Dacarbazine Injection 500 mg 1029.09 2 2 638.77 3 3 390.32
Danazol Capsules 100 mg 20.33 6 5 15.58 17.89 6 5 4.75
Danazol Capsules 50 mg 9.37 6 5 8.34 7.72 6 5 1.03
Diazepam Injection 5 mg/ml 5.59 18 5 4.79 5 5 0.8
Diethylcarbamazine citrate Tablets 50 mg 0.47 3 3 0.97 0.21 4 2 0.5
Digoxin Tablets 0.25 mg 1.26 3 2 1.37 1.27 5 3 0.11
Diltiazem Tablets 30 mg 2.27 17 5 2.66 1.82 11 5 0.39
Domperidone Syrup 1 mg/ml 1.03 41 7 0.89 0.63 12 5 0.14
Dopamine Hydrochloride Injection 40 mg/ml 5.53 9 6 27.31 3 3 21.78
Doxorubicin Injection 50 mg 1145.2 13 4 639.42 485.41 9 7 505.78
Enalapril Maleate Tablets 2.5 mg 1.78 13 5 1.78 0.99 12 6 0
Enalapril Maleate Tablets 5 mg 2.96 18 5 2.71 2.22 16 6 0.25
Ethambutol Tablets 400 mg 2.17 3 3 2.15 3 3 0.02
Ethambutol Tablets 600 mg 3.15 8 4 3.24 3.02 6 4 0.09
Ethambutol Tablets 800 mg 3.74 23 7 4.35 4.2 15 6 0.61
Ethinylestradiol Tablets 0.01 mg 2.12 3 3 2.8 2 2 0.68
Folic Acid Tablets 5 mg 1.15 56 5 2.79 1.65 38 6 1.64
Gemcitabine hydrochloride Injection 1 g 5969.16 18 10 5108.66 4623.23 12 9 860.5
Gemcitabine hydrochloride Injection 200 mg 1304.86 15 9 1198.63 1525.4 11 8 106.23
Glibenclamide Tablets 2.5 mg 0.48 5 3 0.6 5 5 0.12
Glibenclamide Tablets 5 mg 0.96 13 2 0.64 0.91 11 3 0.32
Glucagon Injection 1 mg/ml 788.33 3 3 830.78 2 2 42.45
Glyceryl Trinitrate Injection 5 mg/ml 7.53 9 7 8.93 2 2 1.4
Glyceryl Trinitrate Sublingual Tablets 0.5 mg 1.85 3 2 1.69 2 2 0.16
5.6 Quantitative Analysis of the Impact of Using IMS vs. AIOCD Pharmatrac Data
Haloperidol Injection 5 mg/ml 5.63 9 6 16.62 7.2 7 3 10.99

Homatropine Drops 2% 5 6 3 8.04 2 2 3.04
(continued)
95
96
Column 1 2 3 4 5 6 7 8
Hydrochlorthiazide Tablets 12.5 mg 0.97 6 5 1.14 0.86 8 5 0.17
Hydrochlorthiazide Tablets 25 mg 1.66 6 5 1.87 1.17 7 5 0.21
Hydroxychloroquine phosphate Tablets 200 mg 5.64 15 11 5.58 11.14 16 10 0.06
Hyoscine Butyl Bromide Injection 20 mg/ml 9.84 9 2 9.84 9.83 3 2 0
Imatinib Tablets 400 mg 268.33 5 5 237.96 230.79 15 11 30.37
Imipramine Tablets 25 mg 0.75 13 10 1 0.94 17 7 0.25
Imipramine Tablets 75 mg 2 12 11 2.08 2.27 12 9 0.08
Indinavir Capsules 400 mg 19.41 3 2 16.67 2 2 2.74
Isosorbide 5 Mononitrate Tablets 10 mg 1.92 14 8 1.97 1.5 12 6 0.05
Isosorbide 5 Mononitrate Tablets 20 mg 3.29 21 10 3.33 2.65 20 8 0.04
Ketamine Hydrochloride Injectable 50 mg/ml 10.46 9 5 10.82 35.96 7 5 0.36
Lamivudine + Nevirapine + Stavudine Tablets 17.29 1 1 33.09 24.28 11 7 15.8
150 mg
Lamivudine + Zidovudine Tablets 150 mg + 300 mg 19.63 8 6 19.19 7 7 0.44
Leflunomide Tablets 20 mg 28.63 6 6 28.38 6 6 0.25
Lithium Carbonate Tablets 300 mg 1.41 13 9 1.72 1.48 16 7 0.31
Lorazepam Injection 2 mg/ml 7.39 4 2 8.39 16.15 3 1 1
Losartan Potassium Tablets 25 mg 2.5 55 16 2.38 2.36 54 17 0.12
Losartan Potassium Tablets 50 mg 4.3 58 16 4.54 4.33 61 19 0.24
Medroxy Progesterone Acetate Tablets 10 mg 5.24 10 5 5.02 4.35 12 7 0.22
Mefloquine Tablet 250 mg base 50.06 4 4 51.75 4 4 1.69
Methotrexate Tablet 2.5 mg 4.72 11 7 4.66 4.54 14 7 0.06
Methotrexate Tablets 5 mg 7.6 6 4 7.49 10.16 7 4 0.11
Methotrexate Tablets 7.5 mg 11.27 8 6 10.76 10.43 8 6 0.51
Methyl Ergometrine Tablets 0.125 mg 7.14 16 3 7.42 3.36 11 3 0.28
Metoclopramide Injection 5 mg/ml 2.09 14 7 2.09 0.64 6 5 0
Metoclopramide Syrup 5 mg/5 ml 0.47 7 3 0.1 0.1 5 4 0.37
Metoclopramide Tablets 10 mg 1.04 13 7 1.32 3.95 9 3 0.28
Midazolam Injection 1 mg/ml 5.79 13 5 6.67 5.53 9 8 0.88
Midazolam Injection 5 mg/ml 24.78 7 4 19.4 27.67 5 4 5.38
Misoprostol Tablets 100 μg 9.43 4 3 8.62 7.31 6 4 0.81
Neostigmine Injection 0.5 mg/ml 4.04 11 5 6.53 84.54 6 4 2.49
Nifedipine Capsules 10 mg 1.18 7 5 1.45 0.95 7 4 0.27
Nifedipine Tablets 10 mg 1.13 4 2 1.37 1.06 11 6 0.24
Norethisterone Tablets 5 mg 5.07 26 9 5.42 4.24 22 9 0.35
Ofloxacin Syrup 50 mg/5 ml 0.67 65 17 0.13 0.13 52 10 0.54
Olanzapine Tablets 10 mg 5.32 37 17 5.58 4.89 44 17 0.26
Olanzapine Tablets 5 mg 2.9 42 18 2.95 2.75 47 15 0.05
Ondansetron Tablets 8 mg 11.07 21 8 10.29 10.58 18 9 0.78
Oxytocin Injection 10 iu/ml 37.7 4 2 43.15 48.15 2 1 5.45
Pantoprazole Injection 40 mg 47.93 57 13 10.51 25.44 69 12 37.42
Paracetamol Injection 150 mg/ml 3.29 12 4 3.56 3.55 9 4 0.27
Paracetamol Suppository 80 mg 4.88 2 2 6.95 2 2 2.07
Paracetamol Syrup 125 mg/5 ml 0.33 68 17 0.08 0.06 58 18 0.25
Paracetamol Tablets 500 mg 0.94 103 15 1.03 1.23 91 14 0.09
Penicillamine Tablets or Capsules 250 mg 13.12 4 4 13.82 3 3 0.7
Permethrin Cream 5% 1.77 23 10 1.77 1.63 21 10 0
Permethrin Lotion 5% 1.07 16 14 1.19 0.87 20 13 0.12
Phenobarbitone Tablets 60 mg 1.69 6 3 2.25 1.65 3 1 0.56
Phenytoin Sodium Capsules or Tablets 50 mg 0.77 12 4 0.82 0.79 7 3 0.05
Povidone Iodine Solution 10% 0.91 10 6 0.94 0.81 9 6 0.03
Povidone Iodine Solution 5% 0.39 48 9 0.64 18.64 28 7 0.25
Primaquine Tablets 7.5 mg 1.98 4 2 2.56 1.97 7 3 0.58

Promethazine Syrup 5 mg/5 ml 0.21 11 4 0.05 0.07 16 5 0.16
(continued)
97
98
Column 1 2 3 4 5 6 7 8
Promethazine Tablets 25 mg 2.49 10 2 2.31 0.92 6 2 0.18
Propofol Injectable 1% oil suspension 7.94 16 10 8.48 10.77 10 9 0.54
Pyrazinamide Tablets 1000 mg 8.3 6 6 8.37 7.48 6 5 0.07
Quinine sulphate Injection 300 mg/ml 9.07 5 4 10.11 10.59 9 5 1.04
Quinine sulphate Tablets 300 mg 5.1 19 8 6.07 8.34 26 8 0.97
Rabies Vaccine Injection 302.39 6 6 311.3 306.66 11 7 8.91
Raloxifene Tablets 60 mg 9.89 7 3 12.49 8.99 5 3 2.6
Sodium Valproate Syrup 200 mg/5 ml 0.58 8 3 0.12 0.12 15 5 0.46
Sodium Valproate Tablets 200 mg 3.07 10 5 2.74 3.06 8 6 0.33
Stavudine + Lamivudine Tablets 30 mg + 150 mg 9.2 9 4 9.73 55.68 6 5 0.53
Streptokinase Injection 1,500,000 IU 2034.04 9 5 1196.51 2073.8 6 5 837.53
Sulphacetamide Sodium Drops 20% 1.73 3 2 2.51 3 3 0.78
Tamoxifen Citrate Tablets 20 mg 2.77 9 6 2.91 2.53 5 4 0.14
Testosterone Capsules 40 mg(as undecanoate) 10.96 6 4 13.91 4 4 2.95
Tetanus Toxoid Injection 10.29 7 4 527.12 458.93 23 12 516.83
Thiopentone Sodium Injectable 0.5 g Powder 41.67 4 2 48.58 2 2 6.91
Trihexyphenidyl Hydrochloride Tablets 2 mg 1.36 21 6 1.78 1.42 27 6 0.42
Tropicamide Eye drops 1% 9.6 5 4 11.38 10.37 6 5 1.78
Vancomycin Hydrochloride Injection 1 g 514.44 3 2 217.95 3 3 296.49
Vancomycin Hydrochloride Injection 500 mg 330.6 13 9 139.3 269.72 12 9 191.3
Vincristine Injection 1 mg/ml 50.6 5 4 48.48 68.06 9 7 2.12
Warfarin sodium Tablets 5 mg 2.24 4 2 2.93 2 2 0.69
Zidovudine + Lamivudine + Nevirapine Tablets 300 19.05 1 0 21.68 12.39 7 5 2.63
reason for excluding such small SKUs, although not stated by the NPPA, is because
if they were allowed to influence the ceiling price, then firms can introduce several
SKUs with relatively higher prices and push the potential ceiling price upwards.
For example, GlaxoSmithKline introduced a 15-pack of Crocin Advance 500 mg,
an SKU of Paracetamol, in August 2011 with a per-tablet price of Rs. 1.59. In
comparison, the per-tablet price of most SKUs of Paracetamol 500 mg is less than
one rupee. In Table 5.5 we calculate a hypothetical ceiling price based on the prices
of the neglected SKUs, that is, SKUs with less than 1% market share. Among the
129 medicines listed in Table 5.5, in 29 cases, we could not compute a ceiling price
based on the neglected SKUs because such SKUs were not present in the AIOCD
data. Among the remaining 100 cases, in 68 of the cases, the AIOCD-based ceiling
price computed using the prices of neglected SKUs is lower compared to the
AIOCD-based ceiling price computed using the prices of SKUs with more than
1% market share. Furthermore, in 63 of the 100 cases, the AIOCD-based ceiling
price computed using the prices of neglected SKUs is lower compared to the
IMS-based ceiling price fixed by the NPPA.
We find that the number of SKUs differs between the NPPA and AIOCD datasets.
For example, among the 129 medicines listed in Table 5.5, the number of SKUs is
higher in the NPPA list for 72 medicines and lower in 39 cases. When we compare
the number of SKUs with more than 1% market share, the NPPA list has more SKUs
for 44 medicines and fewer in 39 cases. For some medicines, the coverage as
measured by the number of SKUs appears to be better in the IMS/NPPA list, and
for other medicines, the AIOCD dataset appears to be more comprehensive. For
example, the AIOCD dataset shows 15 different SKUs for Imatinib 400 mg tablets
with 11 of them holding more than 1% market share while the IMS dataset has only
five. On the contrary, IMS/NPPA list has 32 SKUs of Atorvastatin 5 mg tablets with
19 holding more than 1% market share while the AIOCD dataset contains 30 and
14 respectively.
The largest absolute difference between the NPPA and AIOCD ceiling price
reported in Table 5.5 is in the case of 1000 mg Gemcitabine hydrochloride injection
used for chemotherapy in treating cancer patients. The difference between the two
ceiling prices is Rs. 860.5 and we examine the reasons for the discrepancy further in
Table 5.6. The IMS/NPPA dataset contains 18 SKUs of Gemcitabine while the
AIOCD dataset for the period May 2012 to April 2013 contains 20 SKUs. However,
not every SKU with more than 1% market share during May 2012 to April 2013 has
sales and price information in May 2012. Only 12 of the 20 SKUs are represented in
May 2012 data of the AIOCD, whose prices can be used to determine the ceiling
price in the AIOCD dataset. The SKUs of Gemcitabine drawn from IMS/NPPA and
AIOCD datasets are shown in Table 5.6 along with their estimated market shares and
price to the retailer per injection. While Eli Lilly’s Gemcite 1000 mg SKU has the
same price of Rs. 6897.6 in both datasets, the market share of the SKU differs
significantly between the two datasets. Eli Lilly has a market share of 57% in the
IMS/NPPA dataset but only 12% in the AIOCD dataset. Overall, in many cases,
neither the prices nor the market shares match across the two datasets.
Table 5.6 Comparison of Gemcitabine SKU prices in May 2012 in IMS/NPPA and AIOCD data
IMS/NPPA dataset AIOCD dataset
Market Market
Company Stock keeping unit (SKU) share Price share Price
SKUs appearing in both the IMS/NPPA and AIOCD datasets
Eli Lilly Gemcite Inj Iv Lyo V 1 g 1 57.10% 6897.6 12.10% 6897.6
Dr Reddys Cytogem Infus Vial 1000 mg 1 15.70% 4724.57 50.57% 3809.52
Labs
Fresenius Kabi Gemita Inj Iv Lyo V 1 g 1 4.80% 4650 3.69% 4904.8
Panacea Biotec Gemtrust Inj Lyo Vial 3.80% 4905 2.78% 4100
1000 Mg 1
Cipla Oncogem Inj Dry Vial 1 g 1 2.80% 6316.55 0.43% 5572.12
Alkem Celgem Inj Dry Vial 1 g 1 1.80% 4887.69 7.43% 4888.01
Intas Pharma Gemibine Inj Iv Lyo V 1000 mg 0.90% 4358.09 1.68% 4800
25 ml 1
Emcure Gemizan Inj Dry Vial 0.60% 4716.92 0.15% 4575
1000 mg 1
Rpg Life Emcitaben Inj Lyo Vial 1000 mg 0.50% 4905 6.59% 3920
Sciences 25 ml 1
Macleods Gemacta Inj Dry Vial 0.30% 2846.16 1.90% 3100.95
Pharma 1000 mg 1
SKUs appearing only in the IMS/NPPA dataset
Wockhardt Ltd Winogem Inj Dry Vial 1 g 1 5.70% 4639.17
United Biotech Biogem Inj Dry Vial 1000 mg 1 1.70% 5409.98
Vhb Gemset Inj Dry Vial 1 g 25 ml 1 0.10% 3261.83
Lifesciences
SKUs appearing in the IMS/NPPA and AIOCD datasets but prices unreported in the AIOCD
dataset in May 2012
Cadila Pharma Tabicad Inj Dry Vial 1 g 1 2.00% 4784.63 0.06% NA
Emcure Citafine Inj Dry Vial 1 g 1 1.20% 4672 3.14% NA
Khandelwal Gempower Inj Dry Vial 1 g 1 0.40% 4080.96 0.58% NA
Hetero Gemtero Inj Dry Vial 1 g 1 0.40% 6316.67 0.04% NA
Healthcare
Ranbaxy Xtroz Inj Dry Vial 1 g 1 0.30% 5242 0.42% NA
SKUs appearing only in the AIOCD dataset
Sun Pharma Gemtaz 1000 mg Injection 1 4.37% 3215.24
Lab. Ltd.
Gland Pharma Gemciglan 1000 mg Injection 1 0.85% 1809.52
Ltd.
SKUs appearing only in the AIOCD dataset with prices unreported in May 2012
Zydus Cadila Gembin 1000 mg Injection 1 2.44% NA
Parenteral Gemcitapar 1000 mg Injection 1 0.73% NA
Drgus
Zuventus Gemizan 1000 mg Injection 1 0.14% NA
(continued)

IMS/NPPA dataset AIOCD dataset
Market Market
Company Stock keeping unit (SKU) share Price share Price
Indswift Gemkerb 1000 mg Injection 1 0.01% NA
Notes: The 20 SKUs appearing in the AIOCD data during May 2012 to April 2013 period are:
Dr. Reddys Laboratories Ltd. (Cytogem); Eli Lilly And Company (India) Pvt. Ltd. (Gemcite);
Alkem Laboratories Ltd. (Celgem); Rpg Life Sciences Ltd. (Emcitaben); Sun Pharma Laboratories
Ltd. (Gemtaz); Fresenius Kabi India Pvt. Ltd. (Gemita); Emcure Pharmaceuticals Ltd. (Citafine);
Panacea Biotec Ltd. (Gemtrust); Zydus Cadila (Gembin); Macleods Pharmaceuticals Pvt. Ltd.
(Gemacta); Intas Pharmaceuticals Ltd. (Gemibine); Gland Pharma Limited (Gemciglan); Parenteral
Drugs (India) Ltd. (Gemcitapar); Khandelwal Laboratories Ltd. (Gempower); Cipla Ltd.
(Oncogem); Ranbaxy Laboratories Ltd. (Xtroz); Zuventus Healthcare Ltd. (Gemizan); Cadila
Pharmaceuticals Ltd. (Tabicad); Hetero Healthcare Ltd. (Gemtero); Indswift Laboratories Ltd.
(Gemkerb)
While the AIOCD data are likely to be relatively more accurate compared to the
IMS/NPPA dataset, the extent of discrepancy between the two datasets remains a
serious concern in determining the ceiling price. Among 18 to 20 SKUs present in
the two datasets, 15 SKUs are common between the two datasets, only 10 SKUs
have both the annual market share during the period and price information in the
month of May 2012. Five SKUs by Cadila, Emcure, Khandelwal, Hetero, and
Ranbaxy do not have any reported sales and price information in the month of
May 2012. Among these five, Cadila and Emcure have more than 1% market share
in both datasets, but they cannot influence the ceiling price because of the
unavailability of their price information. Six SKUs are present exclusively in the
AIOCD dataset, and two of them have more than 1% market share. While price
information for Zydus Cadila with 2.44% market share is unavailable for the month
of May 2012, Sun Pharma’ s Gemtaz brand of Gemcitabine with a market share of
4.37% is missing in the determination of the ceiling price by the NPPA using IMS
dataset.
The NPPA announced in May 2013 that it would use prices of May 2012 for
calculation of the ceiling prices under the DPCO 2013. This decision would mitigate
the effects of potential manipulation of prices in the period prior to the start of the
regulation. We further examine how the ceiling price would have changed if the
price for the months other than May 2012 had been used to determine the ceiling
price. We plot in Fig. 5.1 the ceiling price based on the primary method of averaging
the price to the retailers of SKUs with more than 1% market during May 2012 to
April 2013 using prices of these SKUs for each month. Such an exercise reveals how
the ceiling price would have changed if prices of other months are used for
determining the ceiling price rather than May 2012 prices alone, which may not
always be available in the IMS or AIOCD datasets. According to Fig. 5.1, the ceiling
price based on May 2012 prices is 5108.66, but it drops to around 4600 in some
Ceiling price of Gemcitabine 1000 mg using AIOCD data
5100
5000
4900
4800
4700
4600
May 2012 Aug 2012 Nov 2012 Feb 2013 May 2013
Fig. 5.1 Ceiling price of Gemcitabine using the AIOCD data, computed using prices in each month
during May 2012 to April 2013
months and raises to 4900 in early 2013. These hypothetical ceiling prices, however,
are lower than the ceiling price of 5969.16 computed using the IMS data.
We repeat the exercise for 39 other medicines for which the NPPA fixed the
ceiling price on June 21, 2013. Table 5.7 compares the ceiling prices calculated
using IMS and AOICD data. For ten medicines on the list, the AIOCD-based ceiling
price is lower than the one fixed by the NPPA and higher for the remaining
25 medicines. For Ceftazidime1000 mg injection, the actual per unit ceiling price
fixed under the DPCO 2013 is 20% higher than the price calculated using AOICD
data. Consistent with earlier analyses, the extent of exact match between the two
ceiling prices is minimal.
Differences in the choice of datasets can lead to different ceiling prices. Even
while using the IMS dataset, the NPPA’s implementation of the methodology for
determining the ceiling price is not clear. We examine the case of Albendazole
200 mg/5 ml suspension, whose ceiling price was fixed on the 21st of June 2013.
According to the NPPA Working Sheet, there are 94 different SKUs producing the
medicine.2 We estimated the market share of each SKU in the list and presented the
results in Table 5.8. There are eight SKUs with more than 1% market share, but the
NPPA reports using 22 SKUs in determining the ceiling price. While not explicitly
mentioned, our calculations suggest that the NPPA rounded off the market share of
SKUs with more than 0.50% as 1%. As a result, SKUs such as Dr. Reddy’s Rediout
brand of 400 mg 10 ml suspension with a market share of 0.5176% is reported by the
NPPA as having 1% market share. Even under this unusual approximation, there are
2
http://www.nppaindia.nic.in/ceiling/press21june13/workingsheet-21-6-13.html
Table 5.7 Comparison of ceiling prices for medicines NPPA fixed the ceiling price on Jun 21 2013
IMS based AIOCD based
Medicine ceiling price ceiling price Difference
Acetazolamide Systemic Tablet 250 mg 3.69 4.48 0.79
Aciclovir Cream 5% 8.89 9.93 1.04
Albendazole Solids 400 mg 1.46 12.29 10.83
Albendazole Suspension 200 mg 1.47 1.95 0.48
Alprazolam Tablet 0.25 mg 0.95 1.28 0.33
Amikacin Injection 250 mg/2 ml 13.95 17.43 3.48
Amlodipine Tablet 2.5 mg 2.03 1.71 0.32
Amlodipine Tablet 5 mg 3.06 2.7 0.36
Amoxycillin Capsule 500 mg 6.09 7.67 1.58
Amoxycillin Suspension 125 mg 0.57 0.72 0.15
Ampicillin Capsule 500 mg 4.76 7.25 2.49
Ampicillin Injection 500 mg 13.41 20.39 6.98
Artesunate Solids 50 mg 20.04 20.84 0.8
Atenolol Solids 50 mg 2.08 2.5 0.42
Atorvastatin Solids 10 mg 5.92 6.54 0.62
Bromocriptine Solids 1.25 mg 7.57 9.59 2.02
Bromocriptine Solids 2.5 mg 13.6 13.85 0.25
Cefixime Tablet 100 mg 7.69 5.11 2.58
Ceftazidime Injection 1000 mg 229.19 190.98 38.21
Ceftriaxone Injection 250 mg 24.6 11.88 12.72
Diazepam Tablet 5 mg 1.32 2.3 0.98
Fluconazole Capsule 200 mg 38.91 37.91 1
Fluconazole Capsule 50 mg 10.16 8.75 1.41
Fluconazole Tablet 100 mg 14.15 4.63 9.52
Glucose Injectables 10% 0.05 0.05 0
Imatinib Mesylate Tablet 100 mg 87.59 97.11 9.52
Levo-Thyroxine (Synthetic) Tablet 100 mcg 1.11 1.12 0.01
Metformin Tablet 500 mg 1.57 1.92 0.35
Omeprazole Capsule 10 mg 2.76 1.5 1.26
Omeprazole Capsule 20 mg 3.02 5.09 2.07
Ondansetron Injection 2 mg/1 ml 7.38 7.77 0.39
Ondansetron Syrup 2 mg/5 ml 1.03 1.08 0.05
Primaquine Tablet 2.5 mg 1.54 2.03 0.49
only 14 different SKUs with more than 1% market share. Yet the NPPA reports
using prices for 22 packs in determining the ceiling price for the medicine at
Rs. 1.48. The ceiling prices based on eight or 14 SKUs are Rs. 1.80 or Rs. 1.70
respectively.
A deeper analysis of the ceiling price reveals that the NPPA uses the listed
number of packs starting from the top of the list. This means that in the case of
Table 5.8 NPPA’s calculations to determine the ceiling price for Albendazole 200 mg/5 ml suspension
104
Company SKU Sales Reported market share Price Market Share we Computed
Glaxosmithkline Zentel Susp 200 mg 10 ml 1 (/5 ml) 227,190,459 0.53 2.02 52.52817
Alkem Noworm Susp 400 mg 10 ml 1 42,830,864 0.1 1.95 9.902822
Mankind Bandy Susp 200 mg 10 ml 1 (/5 ml) 35,044,084 0.08 1.08 8.10246
Blue Cross Womiban Susp 200 mg 10 ml ml 1 (/5 ml) 25,375,927 0.06 1.91 5.867108
Cipla Bendex Susp 200 mg 10 ml 1 (/5 ml) 23,485,722 0.05 1.73 5.430078
Ranbaxy Zeebee Susp 200 mg 10 ml 1 (/5 ml) 12,501,945 0.03 0.53 2.890545
Indoco Abz Susp 10 ml 1 7,213,860 0.02 1.35 1.667899
Unichem Wormfix Susp 200 mg 10 ml 1 (/5 ml) 5,392,763 0.01 1.91 1.246848
Micro Labs Xenda Susp 200 mg 10 ml 1 (/5 ml) 3,763,669 0.01 1.70 0.870189
Albert David Sioban Susp 200 mg 10 ml 1 (/5 ml) 3,486,108 0.01 1.78 0.8060148
Intas Pharma Abd Susp 200 mg 10 ml 1 (/5 ml) 2,905,302 0.01 0.50 0.671728
Medo Pharma Alworm Susp 200 mg 10 ml 1 (/5 ml) 2,497,120 0.01 1.69 0.5773532
Klar Sehen Odal Susp 200 mg 10 ml 1 (/5 ml) 2,472,353 0.01 1.37 0.5716269
Dr Reddys Labs Rediout Susp 400 mg 10 ml 1 2,238,772 0.01 1.08 0.5176212
Mapra Labs Xenith Susp 200 mg 10 ml 1 (/5 ml) 2,151,956 0 1.49 0.4975486
Juggat Pharma Cidazole Susp 200 mg 10 ml 1 (/5 ml) 2,129,812 0 1.77 0.4924288
Zydus Cadila Olworm Susp 200 mg 10 ml 1 (/5 ml) 2,111,061 0 1.48 0.4880934
Wallace Abwal Susp 200 mg 10 ml 1 (/5 ml) 1,836,423 0 1.58 0.424595
Torque Pharma Ben Plus Susp 200 mg 10 ml 1 (/5 ml) 1,824,483 0 2.09 0.4218344
Obsurge Biotech Ah-1 Susp 200 mg 10 ml 1 (/5 ml) 1,740,667 0 1.33 0.4024555
Darkt Internation. Albend Susp 200 mg 10 ml 1 1,530,226 0 1.40 0.3537999
Shine Pharma Albid Susp 200 mg 10 ml 1 (/5 ml) 1,505,611 0 1.50 0.3481087
Novartis Intl. Kealwerm Syrup 200 mg 10 ml 1 (/5 ml) 1,475,580 0 1.69 0.3411654
Emcee Sidose Susp 200 mg 10 ml 1 (/5 ml) 1,413,181 0 1.54 0.3267382
Shrinivas Labs Alvela Susp 200 mg 10 ml 1 (/5 ml) 1,111,645 0 1.60 0.2570208
Indoco Olban Susp 200 Mg 10 ml 1 (/5 ml) 1,071,860 0 1.53 0.2478222
Lupin Limited Lupibend Susp 200 Mg 10 ml 1 (/5 ml) 1,064,667 0 0.60 0.2461591
Burnet Pharma Ben Susp 200 mg 10 ml 1 (/5 ml) 875,992 0 1.94 0.202536
Alembic Worid Susp 200 mg 10 ml 1 865,290 0 0.66 0.2000616
Alkem Dispel Susp 200 mg 10 ml 1 (/5 ml) 842,935 0 1.95 0.194893
Rpg Life Sciences Exyt Susp 200 mg 10 ml 1 (/5 ml) 777,719 0 1.88 0.1798146
Micro Labs Albendol Susp 200 mg 10 ml 1 (/5 ml) 761,730 0 1.58 0.1761178
Sterkem Beworm Susp 200 mg 10 ml 1 (/5 ml) 759,923 0 1.84 0.1757
Torrent Pharma Alminth Susp 200 mg 10 ml 1 (/5 ml) 686,836 0 1.31 0.1588017
Iatros Pharma Albenmint Susp 200 mg 10 ml 1 (/5 ml) 621,888 0 0.81 0.1437853
Wockhardt Ltd Alzad Susp 200 mg 10 ml 1 (/5 ml) 590,364 0 0.65 0.1364967
Makers Labs Wintil Susp 200 mg 10 ml 1 (/5 ml) 588,748 0 0.65 0.136123
Zydus Cadila Zybend Susp 200 mg 10 ml 1 (/5 ml) 534,989 0 0.64 0.1236935
Khandelwal Alltel Susp 200 mg 10 ml 1 (/5 ml) 514,905 0 2.04 0.11905
Abbott Embee Susp 200 mg 10 ml 1 (/5 ml) 472,076 0 0.50 0.1091476
Elder Pharma Eldoben Susp 200 mg 10 ml 1 (/5 ml) 417,818 0 1.80 0.0966027
Mars Helmex Susp 200 mg 10 ml 1 (/5 ml) 375,202 0 1.50 0.0867496
Alkem Elminex Susp 200 mg 10 ml 1 (/5 ml) 366,777 0 1.46 0.0848016
Cadila Pharma Albendazole Syrup 200 mg 10 ml 1 (/5 ml) 328,768 0 0.67 0.0760137
Micro Labs Xenda Susp 200 mg 10 ml 50 (/5 ml) 324,606 0 1.09 0.0750514
Nestor Pharma Albest Susp 200 mg 10 ml 1 (/5 ml) 320,270 0 1.23 0.0740489
Bestochem Albendabest Susp 200 mg 10 ml 1 (/5 ml) 313,789 0 1.88 0.0725504
Dales Pharma Krumex Susp 200 mg 10 ml 1 (/5 ml) 299,675 0 0.88 0.0692871
Mankind Mahabend Susp 200 mg 10 ml 1 (/5 ml) 277,092 0 0.64 0.0640658
Cadila Pharma Vormout Susp 200 mg 10 ml 1 (/5 ml) 226,069 0 0.51 0.0522689
Wockhardt Ltd Wozole Susp 10 ml 1 219,397 0 0.60 0.0507263
(continued)
105
106
Company SKU Sales Reported market share Price Market Share we Computed
Seagull Labs Spantel Susp 200 mg 10 ml 1 (/5 ml) 211,310 0 1.80 0.0488565
Lincoln Pharma Anthel Susp 200 mg 10 ml 1 (/5 ml) 203,260 0 1.06 0.0469953
Aglowmed Wormpel Susp 10 ml 1 202,110 0 1.55 0.0467294
Euphoric Pa-Pa A Susp 200 mg 10 ml 1 (/5 ml) 199,173 0 1.30 0.0460503
Radicura Pharma Al Susp 200 mg 10 ml 1 178,783 0 0.92 0.041336
Libra Drugs Zeben Susp 200 mg 10 ml 1 (/5 ml) 128,357 0 1.13 0.0296771
Agio Pharma Albazio Susp 200 mg 10 ml 1 (/5 ml) 114,080 0 1.11 0.0263762
Morepen Labs Mybend Liquid 400 mg 10 ml 1 110,830 0 0.63 0.0256247
Orchid Chem&Pharm Banhelmin Susp 200 mg 10 ml 1 (/5 ml) 107,979 0 0.58 0.0249656
M M Labs Emanthal Susp 200 mg 10 ml 1 (/5 ml) 107,916 0 0.93 0.024951
Cipla Tiobend Susp 200 mg 10 ml 1 (/5 ml) 104,388 0 0.59 0.0241353
Glaxosmithkline Zentel Susp 200 mg 50 ml 1 (/5 ml) 97,523 0 0.96 0.0225481
Acron Alone Syrup 10 ml 1 95,207 0 1.45 0.0220126
Glenmark Labs Albact Susp 200 mg 10 ml 1 (/5 ml) 94,685 0 1.01 0.0218919
Morepen Labs Morezole Susp 200 mg 10 ml 1 (/5 ml) 92,755 0 2.40 0.0214457
Emcure Sezole Susp 200 mg 10 ml 1 (/5 ml) 92,256 0 1.27 0.0213303
Cipla Xworm Susp 200 mg 10 ml 1 (/5 ml) 91,113 0 0.70 0.021066
Seagull Labs Panamint Susp 200 mg 10 ml 1 (/5 ml) 87,317 0 1.43 0.0201884
Shreya Life Scienc Alzist Susp 200 mg 10 ml 1 (/5 ml) 73,921 0 1.80 0.0170911
Pharmindia Abend Susp 200 mg 10 ml 1 (/5 ml) 51,687 0 1.25 0.0119504
Blue Cross Albendazole Syrup 200 mg 10 ml 1 (/5 ml) 46,620 0 1.11 0.0107789
Medley Pharma Odipar Susp 10 ml 1 42,845 0 0.55 0.0099061
Indoco Wormiknock Syrup 200 mg 10 ml 1 (/5 ml) 39,284 0 0.57 0.0090828
Ambalal Sarabhai Albendazole Susp 200 mg 10 ml 1 (/5 ml) 38,072 0 0.64 0.0088025
Pfizer Combantrin-A Susp 200 mg 10 ml 1 (/5 ml) 28,779 0 2.09 0.0066539
Ind-Swift Elbenol Susp 200 mg 10 ml 1 (/5 ml) 26,019 0 0.57 0.0060158
Cadila Pharma Wormin-A Susp 200 mg 10 ml 1 (/5 ml) 23,534 0 1.12 0.0054412
Synchem Labs Mintel Susp 200 mg 10 ml 1 (/5 ml) 22,840 0 1.57 0.0052808
Moraceae Pharma Morband Susp 200 mg 10 ml 1 (/5 ml) 18,079 0 0.85 0.00418
Syncom Alb Susp 200 mg 10 ml 1 (/5 ml) 10,596 0 0.60 0.0024499
Kanpha Bendol Susp 200 mg 10 ml 1 (/5 ml) 8053 0 1.05 0.0018619
Zydus Cadila Cantel Syrup 10 ml 1 7225 0 0.50 0.0016705
Ranbaxy Albendazole Susp 200 mg 10 ml 1 (/5 ml) 5802 0 0.98 0.0013415
Galpha Labs Helmanil Susp 200 mg 10 ml 1 (/5 ml) 4500 0 1.56 0.0010404
Euphoric Abzole Susp 200 mg 10 ml 1 (/5 ml) 4365 0 0.98 0.0010092
Lark Labs Toko Syrup 200 mg 10 ml 1 (/5 ml) 3845 0 0.72 0.000889
Caryl Pharma Alzol Susp 200 mg 10 ml 1 (/5 ml) 3039 0 1.61 0.0007026
Zee Labs Altec Susp 200 mg 10 ml 1 (/5 ml) 1408 0 1.35 0.0003255
Lincoln Pharma Bentel Susp 200 mg 10 ml 1 (/5 ml) 989 0 1.80 0.0002287
Wings Pharma Albazole Susp 200 mg 10 ml 1 (/5 ml) 924 0 0.53 0.0002136
Cipla Wormex Susp 200 mg 10 ml 1 (/5 ml) 722 0 0.67 0.0001669
Invida India Albrodo Susp 200 mg 10 ml 1 (/5 ml) 410 0 0.91 0.0000948
Stadmed Private Tagazole Susp 200 mg 10 ml 1 (/5 ml) 110 0 1.22 0.0000254
107
Albendazole Suspension the first 22 packs on the working sheet are considered. It is
remarkable that not all of the 22 SKUs have a market share of 1% or more. Looking
closer at the companies producing the 22 packs considered, it seems that packs for
fixation of the price ceilings are not chosen based on the “branded-generic and
generic versions of a certain drug formulation” as stated in the DPCO 2013 having a
market share of at least 1% but based on the company’s total market share. In other
words, once a company has a single pack that meets the market share criterion, all
other packs with different retail prices produced by the same company are also used
for calculating the ceiling price.
Unfortunately, this procedure is repeated for all molecules on the Working Sheet
of June 21 2013, which has a significant impact on the level of the ceiling prices. We
repeat our analyses for Albendazole 400 mg/5 ml suspension and find similar
inconsistencies (see Table 5.9). The NPPA list contains 107 SKUs for 400 mg
Albendazole. Among them, 10 SKUs have a market share of more than 1% with
an estimated ceiling price of 12.71. There are 54 SKUs with more than 0.5% market
share and the ceiling price based on their prices is 12.28. Yet the NPPA’s ceiling
price is based on 32 SKUs and fixed at 9.12.
The above analysis shows two important findings. First, it clearly demonstrates
the ambiguity in the information the NPPA provides to the public. Second, it gives
evidence for the claim that the fixation of ceiling prices by the NPPA is not done
according to the own rules outlined in the DPCO 2013.
The inconsistencies described above are not exhaustive (Table 5.10). There are
identical packages with comparable brand names included in the NPPA list and the
AOICD list that match with dissimilar companies. Although it is possible that
different companies offering brands are named similarly, it looks like the NPPA
has confused company names sometimes leading to a lack of clarity on the type and
number of brands considered for price ceiling calculation. This problem seems to
apply to company Zydus Cadila in the IMS data set and company Biochem Phar-
maceuticals in the AOICD dataset, as well as to company Emcure in the IMS data set
and company Zuventus Healthcare in the AOICD data set. Take the case of
Amikacin. Here, pack Amicin Inj Vial 250 mg 2 ml x 1 with brand name Amicin is
produced by company Zydus Cadila at a price of Rs. 13.72 per unit according to the
NPPA list. The same pack Amicin Inj Vial 250 mg 2 ml x 1 is manufactured by
company Biochem according to the AOICD list at exactly the same price of
Rs. 13.72 per unit. Similarly, for Ampicillin capsule the pack Biocillin Caps
500 mg x 10 with brand name Biocillin is produced by company Zydus Cadila at a
unit price of Rs. 5.24 according to the NPPA and by Biochem at the same price
according to the AOICD. In the latter case, both companies also have identical
market shares. Moreover, looking at molecule Cefixime, the pack C-Tax-O Tabs
Dispers 100 mg x 10 with brand name C-Tax-O is listed by the NPPA for company
Emcure with a market share of 1% and a price per unit of Rs. 6.21 and by the AOICD
for company Zuventus with a similar market share and price. Also in the case of
Ondansetron 2 mg/5 ml the pack Emigo 2 mg Syrup 30 ml is produced by these same
companies at comparable prices. The reason for the mismatch between companies
and packages is unclear. A short search on the websites of the pharmaceutical
Table 5.9 NPPA’s calculations to determine the ceiling price for Albendazole 400 mg/5 ml suspension
Company SKU Sales Reported market share Price Market share we computed
Glaxosmithkline Zentel Tab Uncoated 400 mg 1 319,208,884 0.49 14.02 49.30674
Ranbaxy Zeebee Tabs Chew 400 mg 1 69,170,157 0.11 9.6 10.6844
Alkem Noworm Tab Uncoated 400 mg 1 43,831,785 0.07 12.77 6.770496
Cipla Bendex Tabs Chew 400 mg 1 35,547,976 0.05 12.07 5.490934
Mankind Bandy Tabs Chew 400 mg 1 31,024,473 0.05 6.54 4.792209
Blue Cross Womiban Tabs 400 mg 1 25,664,909 0.04 13.83 3.964342
Intas Pharma Abd Tabs 400 mg 1 8,909,485 0.01 9.84 1.376208
Mankind Bandy Tabs 400 mg 10 7,688,700 0.01 5.71 1.187639
Micro Labs Xenda Tabs Chew 400 mg 1 7,636,455 0.01 12.95 1.179568
Lupin Limited Lupiworm Tabs Chew 400 mg 1 7,134,612 0.01 12.26 1.102051
Indoco Abz Tabs 400 mg 1 6,070,724 0.01 11 0.937717
Unichem Wormfix Tabs Chew 400 mg 1 5,204,667 0.01 13.33 0.803941
Juggat Pharma Cidazole Tab Uncoated 400 mg 1 4,990,185 0.01 10.14 0.770811
Micro Labs Xenda Tabs 400 mg 30 4,963,188 0.01 8.96 0.766641
Zydus Cadila Zelbend Tabs 400 mg 1 4,725,737 0.01 9.63 0.729963
Albert David Sioban Tabs Chew 400 mg 1 4,543,932 0.01 12.24 0.701881
Shreya Life Scienc Albenum Tabs 400 mg 10 4,480,718 0.01 16.35 0.692116
Shrinivas Labs Alvela Tabs Chew 400 mg 1 3,881,264 0.01 12.18 0.599521
Dr Reddys Labs Rediout Tabs Chew 400 mg 1 3,355,741 0.01 5.77 0.518346
Alembic Worid Tabs Chew 400 mg 1 3,322,948 0.01 9.63 0.513281
Cipla Xworm Tabs Chew 400 mg 1 3,251,536 0.01 3.61 0.50225
Zydus Cadila Olworm Tabs 400 mg 1 2,414,483 0 10.63 0.372954
Klar Sehen Odal Tabs Chew 400 mg 1 2,373,826 0 8.58 0.366674

Khandelwal Alltel Tabs Chew 400 mg 1 2,324,107 0 14.44 0.358994
Emcee Sidose Tabs 400 mg 1 2,214,808 0 10.2 0.342111
Obsurge Biotech Ah-1 Tabs Ch.Oran 400 mg 1 2,177,641 0 6.9 0.33637
109
(continued)
110
Darkt Internation. Albend Tabs Chew 400 mg 1 2,001,086 0 9 0.309099
Shine Pharma Albid Tabs 400 mg 1 1,844,490 0 10.69 0.28491
Mapra Labs Xenith Tabs 400 mg 1 1,796,816 0 11.26 0.277546
Ranbaxy Albendazole Tabs 400 mg 1 1,752,600 0 8.4 0.270716
Medo Pharma Alworm Tabs Chew 400 mg 1 1,745,783 0 8.99 0.269663
Glaxosmithkline Zentel Tabs Chew 400 mg 2 1,725,090 0 10.55 0.266467
Iatros Pharma Albenmint Tabs 400 mg 1 1,246,181 0 10.49 0.192492
Zydus Cadila Albendazole Tabs 400 mg 1 1,243,641 0 3 0.1921
Alkem Dispel Tabs 400 mg 1 1,195,687 0 12.45 0.184692
Sterkem Beworm Tab Uncoated 400 mg 1 1,127,798 0 10.82 0.174206
Palson Drug All-In-1 Tabs 400 mg 1 1,104,213 0 9.83 0.170563
Wallace Abwal Tab Uncoated 400 mg 1 1,034,127 0 11.93 0.159737
Emcee Sidose Tabs Chew 400 mg 10 1,025,639 0 9.73 0.158426
Burnet Pharma Ben Tabs 400 mg 1 915,166 0 13.17 0.141362
Lupin Limited Lupibend Tabs Chew 400 mg 1 717,187 0 2.66 0.110781
Glaxosmithkline Zentel Tabs 400 mg 5 712,550 0 11.61 0.110064
Aglowmed Wormpel Tabs 400 mg 1 619,344 0 9.52 0.095667
Elder Pharma Eldoben Tab Uncoated 400 mg 1 615,004 0 13.9 0.094997
Indoco Olban Tabs Chew 400 mg 1 530,345 0 11.74 0.08192
Torrent Pharma Alminth Tabs 400 mg 3 516,406 0 9.98 0.079767
Nestor Pharma Albest Tabs 400 mg 1 484,634 0 9.65 0.074859
Micro Labs Albendol Tabs 400 mg 1 441,812 0 9.67 0.068245
Zydus Cadila Zybend Tabs 400 mg 1 390,024 0 1.71 0.060245
Dales Pharma Krumex Tab Uncoated 400 mg 1 364,844 0 6.4 0.056356
Mars Helmex Tabs 400 mg 1 352,921 0 13.04 0.054514
Lincoln Pharma Anthel Tabs Chew 400 mg 1 342,730 0 8.11 0.05294
Laborate Pharma Abide Tab Uncoated 400 mg 1 339,984 0 12.26 0.052516
Emcee Sidose Tabs 400 mg 3 328,820 0 7.06 0.050791
Cipla Tiobend Tabs 400 mg 1 304,862 0 1.6 0.047091
Uni-San Pharma Helmix Tabs Chew 400 mg 1 304,341 0 8.43 0.04701
Satven&Mer Pharma Low Tab Uncoated 400 mg 10 303,459 0 0.8 0.046874
Radicura Pharma Al Tabs 400 mg 1 289,380 0 7.17 0.044699
Graf Labs D Worm Tabs 400 mg 1 287,930 0 10.73 0.044475
Makers Labs Wintil Tabs 400 mg 1 284,320 0 4 0.043918
Wockhardt Ltd Alzad Tabs 400 mg 1 282,795 0 1.4 0.043682
Wockhardt Ltd Wozole Tabs Chew 400 mg 1 269,132 0 1.75 0.041572
Novartis Intl. Kealwerm Tabs 400 mg 2 242,078 0 8.65 0.037393
Acron Alone Tabs Chew 400 mg 1 229,477 0 8.02 0.035446
Mankind Mahabend Tabs 400 mg 1 210,987 0 1.58 0.03259
Medo Pharma Alworm Tabs Chew 400 mg 10 196,806 0 6.97 0.0304
Klar Sehen Odal Tabs 400 mg 10 167,286 0 0.82 0.02584
Micro Labs Wormal Tabs Chew 400 mg 1 143,685 0 1.75 0.022194
Cadila Pharma Vormout Tabs 400 mg 1 139,855 0 1.36 0.021603
Ind-Swift Elbenol Tabs 400 mg 1 112,999 0 2.73 0.017454
Blue Cross Womiban Tabs 400 mg 4 88,964 0 6.89 0.013742
Morepen Labs Morezole Tabs Chew 400 mg 1 88,903 0 8.84 0.013732
Glenmark Labs Albact Tabs 400 mg 1 69,101 0 9.61 0.010674
Seagull Labs Panamint Tabs 400 mg 1 65,058 0 11.72 0.010049
Syncom Alb Tabs 400 mg 1 61,896 0 4 0.009561
Omega Remedies Albee Tabs Chew 400 mg 1 61,650 0 10.96 0.009523
Moraceae Pharma Morband Tabs Chew 400 mg 2 56,900 0 5.81 0.008789

Libra Drugs X- Worm Tabs Chew 400 mg 1 56,520 0 9 0.00873
Psychotropics Wonil Tabs 400 mg 5 52,490 0 2.62 0.008108
Synchem Labs Mintel Tabs Chew 400 mg 1 49,519 0 9.58 0.007649
111
Zydus Cadila Cantel Tabs Chew 400 mg 1 44,205 0 1.15 0.006828

(continued)
112
M M Labs Emanthal Tabs 400 mg 1 42,942 0 6.14 0.006633
Libra Drugs Zeben Tabs Chew 400 mg 1 34,991 0 10.53 0.005405
Seagull Labs Spantel Tabs 400 mg 10 32,753 0 1.19 0.005059
Ashok Pharma Envorm Tabs Chew 400 mg 1 23,859 0 9 0.003685
Anglo French Drugs Albendazole Tabs 400 mg 1 22,086 0 3 0.003412
Maneesh Pharma Goworm Tabs Chew 400 mg 1 18,787 0 7.76 0.002902
Morepen Labs Mybend Tabs Chew 400 mg 1 18,168 0 1.5 0.002806
Noel Pharma Benz Tabs 400 mg 1 18,077 0 1.8 0.002792
Marc Laboratories Eraworm Tabs 400 mg 1 17,665 0 11.11 0.002729
Glenmark Pharma Milibend Tabs 400 mg 1 14,780 0 5.7 0.002283
Lark Labs Toko Tabs Fort 400 mg 1 14,055 0 4.33 0.002171
Medico Labs Mediminth Tabs 400 mg 1 10,649 0 4.11 0.001645
Pfizer Combantrin-A Tabs Chew 400 mg 1 7619 0 12.23 0.001177
Cipla Wormex Tabs Chew 400 mg 1 6984 0 3.25 0.001079
Unk. Generic Manf. Albendazole Tabs 400 mg 1 5405 0 1.09 0.000835
Indoco Wormiknock Tabs 400 mg 1 4880 0 1.42 0.000754
Zydus Cadila Zelbend Tab Uncoated 400 mg 4 2034 0 8.62 0.000314
Rpg Life Sciences Albendazole Tabs 400 mg 1 1476 0 2.4 0.000228
Pharmasynth Formul Nemofex Tabs Chew 400 mg 1 1144 0 24.34 0.000177
Syncom Alb Tabs 400 mg 10 1063 0 0.27 0.000164
Cadila Pharma Wormin-A Tabs 400 mg 1 769 0 9.05 0.000119
Mapra Labs Xenith Tabs Chew 400 mg 1 763 0 12.51 0.000118
Overseas Elbend Tab Uncoated 400 mg 2 314 0 9.81 4.85E-05
Overseas Elbend Tab Uncoated 400 mg 1 182 0 9.1 2.81E-05
Invida India Albrodo Tabs 400 mg 1 59 0 6.57 9.11E-06
Ar Ex Saf-A Tabs 400 mg 1 48 0 8 7.41E-06
Table 5.10 Comparison of total number of packs, packs considered and similar packs considered
using IMS vs. AOICD data
N of N of N of packs N of packs Common
Medicine with ceiling price packs packs in used by used in N of
notified on 21st June 2013 in IMS AOICD NPPA AIOCD packs
Acetazolamide Systemic Tablet 8 9 3 6 3
250 mg
Aciclovir Cream 5% 7 8 6 5 4
Albendazole Suspension 200 mg 94 51 14 4 4
Albendazole Tablet 400 mg 107 91 32 6 6
Alprazolam Tablet 0.25 mg 84 70 17 8 7
Amikacin Injectables 250 mg 50 41 26 14 11
Amlodipine Tablet 2.5 mg 64 42 34 15 12
Amlodipine Solids 5 mg 88 71 42 17 14
Amoxycillin Suspension 125 mg 69 20 24 6 6
Amoxycillin Capsule 500 mg 105 58 18 7 5
Ampicillin Capsule 500 mg 28 11 13 4 3
Ampicillin Injection 500 mg 27 10 15 5 4
Artesunate Solids 50 mg 14 10 6 8 6
Atenolol Solids 50 mg 69 38 21 9 9
Atorvastatin Solids 10 mg 99 104 45 21 21
Bromocriptine Solids 1.25 mg 9 7 6 6 4
Bromocriptine Solids 2.5 mg 11 9 6 7 4
Cefixime Tablet 100 mg 121 125 48 20 18
Ceftazidime Injection 1000 mg 23 16 8 7 5
Ceftriaxone Injection 250 mg 67 55 28 14 11
Diazepam Tablet 5 mg 20 13 10 6 5
Fluconazole Capsule 200 mg 5 5 5 5 5
Fluconazole Capsule 50 mg 6 5 4 3 3
Fluconazole Tablet 100 mg 4 2 3 1 1
Glucose Injectables 10% 14 6 10 5 5
Imatinib Mesylate Tablet 100 mg 3 10 3 7 3
Levo-Thyroxine (Synthetic) 11 11 4 4 4
Tablet 100 mcg
Metformin Tablet 500 mg 100 94 44 15 15
Omeprazole Capsule 10 mg 11 7 4 2 1
Omeprazole Capsule 20 mg 117 78 26 5 4
Ondansetron Injection 2 mg/1 ml 71 59 31 12 10
Ondansetron Syrup 2 mg/5 ml 56 40 11 7 5
Primaquine Tablet 2.5 mg 3 4 2 4 2
Ispaghula Granules 29 3 20 1 0
companies does not suggest any connection between the two, neither for Zydus
Cadila and Biochem nor Emcure and Zuventus. However, since the discussed
packages have a market share of more than 1%, the result is a lower number of
similar packs considered for price fixation.
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Shankar, R. (2016a, April 18). NPPA clarifies on implementation of prices fixed and notified under
provisions of DPCO, 2013. PharmaBiz.com
References 115
Shankar, R. (2016b, July 12). DoP asks NPPA to re-fix ceiling price of ‘Clotrimazole Cream 1%’ on
review petition filed by Glenmark. PharmaBiz.com
Shankar, R. (2016c, December 12). DoP directs NPPA to adopt correct methodology in fixing
ceiling price of ciprofloxacin 500 & 250 mg tabs. PharmaBiz.com
Shankar, R. (2016d, July 18). DoP directs NPPA to examine new data to review ceiling price of
erythropoietin Inj 2000 IU & 10000 IU. PharmaBiz.com
Shankar, R. (2016e, October 21). DoP directs NPPA to re-fix and re-notify ceiling prices of
“Cefotaxime 1 gm injection”. PharmaBiz.com
Shankar, R. (2016f, September 12). DoP directs NPPA to re-fix ceiling price of ‘Coagulation Factor
VIII’. PharmaBiz.com
Shankar, R. (2016g, August 30). DoP directs NPPA to re-fix retail price of “azithromycin and
dexamethasone phosphate eye drops 3 ml vial”. PharmaBiz.com
Shankar, R. (2016h, September 27). DoP directs NPPA to revise ceiling prices of “Paclitaxel
injection, Carboplatin & Cisplatin” strictly as per para 4 of DPCO 2013. PharmaBiz.com
Shankar, R. (2016i, October 24). DoP quashes ceiling price of levoflexacin 500 mg by NPPA;
directs to refix ceiling price as per DPCO. PharmaBiz.com
Shankar, R. (2016j, May 16). NPPA asks retailers not to return stocks if manufacturers provide
current price list as per revised notified prices of drugs. PharmaBiz.com
Shankar, R. (2017a, February 6). DoP directs NPPA to re-fix retail price of teneligliptin 20 mg +
metformin 1000 mg ER tablets. PharmaBiz.com
Shankar, R. (2017b, September 21). DoP asks NPPA to re-fix ceiling price of co-trimoxazole tablet
after examining documentary proof submitted by Cadila Healthcare. PharmaBiz.com
Shankar, R. (2017c, May 3). DoP asks NPPA to refix prices of “Methotrexate 2.5 mg, 7.5 mg and
10 mg tabs” by considering only 8 formulations with SKU-wise MAT of more than 1% market
share. PharmaBiz.com
Shankar, R. (2017d, October 3). DoP asks NPPA to take expert committee’s opinion for fixing
ceiling price of methylprednisolone Inj 40 mg/ml. PharmaBiz.com
Shankar, R. (2017e, August 14). DoP directs NPPA to re-fix ceiling price of N-acetylcyseine
200 mg sachet. PharmaBiz.com
Shankar, R. (2017f, January 5). DoP directs NPPA to re-fix ceiling price of ondansetron 2 mg/ml
injectables. PharmaBiz.com
Shankar, R. (2017g, June 1). DoP directs NPPA to re-fix ceiling price of Ranitidine 25 mg/ml.
PharmaBiz.com
Shankar, R. (2017h, September 18). DoP directs NPPA to re-fix ceiling prices of clomiphene
100 mg and 50 mg tablets. PharmaBiz.com
Shankar, R. (2017i, August 31). DoP directs NPPA to re-fix the ceiling price of Furosemide
injection. PharmaBiz.com
Shankar, R. (2017j, January 12). DoP directs NPPA to revise ceiling price of formulation methyl-
dopa 500 mg tablet as per para 4(1) and para 6 of DPCO, 2013. PharmaBiz.com
Shankar, R. (2017k, November 11). DoP directs NPPA to take expert panel’s opinion on separate
ceiling prices based on pack sizes of methylprednisole injection. PharmaBiz.com
Shankar, R. (2017l, January 4). NPPA fails to fix ceiling prices of coronary stents due to insufficient
data. PharmaBiz.com
Shankar, R. (2017m, April 17). No provision in DPCO 2013 to differentiate consumer pack and
dispensing pack while calculating ceiling price: DoP. PharmaBiz.com
Shankar, R. (2017n, April 27). Sun Pharma gets favourable review on carboxymethylcellulose
drops 1% as DoP asks NPPA to re-fix ceiling price. PharmaBiz.com
Vijay, N. (2015, February 27). NPPA to discuss identification marks for drugs under ceiling price
with trade, BDCDA wants red color on packs. PharmaBiz.com
Yadav, L. (2016, July 20). DoP agrees to AIOCD’s demand for allowing sale of drugs at pre-revised
prices until their batch number expires. PharmaBiz.com
Part III
The Impact of the 2013 DPCO
Chapter 6
How Effective Are the 2013 DPCO
Regulations?
6.1 Introduction
In this chapter, we examine whether the 2013 DPCO has been successful in making
essential medicines more affordable. Before we do so, it is useful to recall historical
assessments of previous versions of the DPCO. Historical accounts indicate that
the implementation of DPCO regulations in India has been ineffective. In the 1970s,
the implementation of the recommendations of the Hathi Committee were delayed
by 4 years. Although the committee established the importance of focusing
price regulation based on the ‘essentiality’ of drugs rather than their prices, the
recommendation was forgotten by 2002, leading to a fresh debate on the issue. In
1979, the control of drug prices led to a troubling shortage of essential drugs, causing
hardships for patients (Basak 2008). The drafting of the drug policy was delayed in
the 1980s due to opposition from industry associations (EPW 1985). In 1986, the
pharmaceutical policy was still unclear about what drugs needed to be brought under
price regulation, allowing industry associations to influence regulators on behalf of
the pharmaceutical firms (Bal 1986a, b). In 1990, the industry and trade associations
warned about a possible nationwide strike unless the implementation of price control
was postponed (EPW 1990). Similarly, after the implementation of the 1995 price
control regime, prices of essential medicines rose, which benefited pharmaceutical
producers (Malhotra 2010; Rane 1996). Before we examine the effectiveness of the
2013 DPCO, we discuss the assessment by the NPPA as well as an assessment by the
pharmaceutical industry lobby in collaboration with IMS.

120 6 How Effective Are the 2013 DPCO Regulations?
6.2 Revisiting an Evaluation of the Price Control

Regulations Conducted by IMS Health
IMS evaluated the 2013 DPCO and released a report in July 2015. The study was
sponsored by the Organization of Pharmaceutical Producers of India (OPPI), an
industry association of foreign pharmaceutical firms operating in India, who were
less enthusiastic about the imposition of drug price controls in India. The IMS study
argued that price controls are neither an effective nor a sustainable strategy for
improving access to medicines for Indian patients and that they are counterproduc-
tive (PharmaBiz.com 2015). Nitin Goel, general manager, IMS Health South Asia
notes (PharmaBiz 2015):
Price control has limited impact on improving patient access and, furthermore, is not aligned
with the requirements of a vibrant economy like India. Government’s priority should be on
strengthening India’s healthcare infrastructure and extending universal insurance coverage.
The IMS report contains four key findings, which we list below (IMS Health
2015). We also identify potential limitations associated with each of the findings.
Finding 1. For low-income households that are reliant on the government system for
healthcare, DPCO would not improve the patient’s ability to purchase drugs. This is
supported by the fact that no significant penetration of price-controlled molecules in rural
markets is visible, with consumption in rural towns decreasing at ~7% over the last two
years. The price controlled molecules has also witnessed muted growth in prescriptions
outside metros (town class I) as compared to 5% Rx growth in non-DPCO molecules.
In theory, a decline in prices should make the medicines more affordable, partic-
ularly to low-income households in rural areas. Yet the study points to a decline in
prescriptions for price-controlled medicines compared to others. The result is sur-
prising, and the study does not elaborate on the potential underlying mechanisms
causing such decline in prescriptions in rural areas. Nevertheless, the study concludes
that the DPCO is ineffective. We identify the following limitations with this conclu-
sion. First, a decline in prescriptions can result from a shift in production as well as the
promotional effort by pharmaceutical firms away from regulated medicines and into
unregulated medicine markets. We will examine this mechanism in greater detail in
Chap. 7. Second, although the IMS study chooses to focus on low-income house-
holds, access to affordable medicines remains a problem for not only low-income
families but also for the vast majority of the population in India. Hence, the focus of
the 2013 DPCO is not merely to make medicines affordable to low-income families
alone, but to control the inexplicably high profit margins for both manufacturers and
retailers in the pharmaceutical industry, as discussed in Chap. 3.
Finding 2. DPCO has an impact on the tail-end brands than the leading players thereby
increasing market concentration and resulting in discontinuation of brands, with the average
number of brands in DPCO molecules reducing from 36 in 2013 to 32 in 2015. These market
forces can move towards strengthening of oligopolistic behavior, which will result in
reduced set of choices for the doctors/patients.
The basis for the assertion by IMS that the DPCO has an impact on the tail-end
brands alone is unclear. By contrast, as we discussed in Chap. 4, the DPCO takes
6.2 Revisiting an Evaluation of the Price Control Regulations Conducted. . . 121
into account SKUs with more than 1% market share in determining the ceiling price.
As a result, in the market for 500 mg Paracetamol tablets, the 14 SKUs with more
than 1% market share influence the ceiling price, but more than 100 tail-end brands
have no such influence. Also, as we documented in Chap. 3, the leading players in
the market usually also charge relatively higher prices. Consequently, the ceiling
price is generally non-binding concerning the tail-end firms. One would expect that a
well-executed DPCO sets ceiling prices that are binding for the leading brands. The
market structure of the medicine markets with more than 30 SKUs indicates that
there are a small number of dominant firms and a large number of relatively small
firms, commonly referred to as the competitive fringe. It is unclear from the IMS
finding whether SKUs produced by the dominant firms exited the market on those of
the tail-end firms. Overall, if the 2013 DPCO is designed and implemented well, and
pharmaceutical firms comply with price controls, and doctors and patients shop for
better prices, then the intensity of competition should increase between the tail-end
and the leading players.
Finding 3. The decline in R&D resulting in fewer new introductions of generic products;
Post DPCO 2013, the average number of new introductions in DPCO molecules has
declined, which also indicates increasing concentration and reducing competitive intensity.
The medicines brought under the DPCO are generally older, out-of-patent med-
icines. Pharmaceutical firms in India focus on promoting these medicines rather than
invest in R&D. It is unclear what IMS consider to be R&D in the context of DPCO
medicines, and whether the study can come to such conclusions without examining
medicine-specific and dosage-specific investments in R&D. To our knowledge, such
data are not compiled by the Center for Monitoring the Indian Economy (CMIE). In
addition, interpreting new SKU introductions of generic products as a measure of
R&D is highly problematic for several reasons. First, as we will examine later in the
book, the new introductions of generic products in the Indian pharmaceutical
industry typically involve innovations in packaging, branding, and marketing that
have per se no added therapeutic value. Second, as discussed in Chap. 3, a company
like Cipla introduces three different varieties of the same medicine under different
brand names and with different prices, and the brand with highest prices typically
has the highest market share. The presence of multiple such SKUs does not indicate
higher R&D expenses by Cipla. Third, there is anecdotal evidence to suggest that
pharmaceutical firms introduced new SKUs to circumvent DPCO regulations. For
example, GSK claimed that its new SKU of Paracetamol, introduced in August
2011, at a per-tablet price of Rs. 1.59 and a retail margin of 26%. GSK also
discontinued all older Crocin brands. The consumer division of GSK argued that
Crocin Advance is an innovative drug with an advanced technology compared to any
other brand of Paracetamol (Nautiyal 2014a, b, c April 7). GSK went on to claim
exemption from the DPCO regulations and refused to comply with the ceiling price
(Nautiyal 2014a, b, c April 7):
Crocin Advance has a superior pharmacokinetic profile to standard paracetamol tablets and
has been approved as New Drug Formulation by CDSCO. GSK had applied to NPPA
through Remedix Pharmaceuticals, the manufacturer of the drug, for grant of exemption
from price control under the provisions of Para 32, in DPCO 2013.
Naturally, the NPPA rejected GSK’s surprisingly generous interpretation of

novelty and the added therapeutic value of its Crocin Advance SKU, resulting in
recovery of Rs. 5399.37 lakhs by the NPPA by March 14, 2017 for overcharging
consumers (NPPA 2017). Therefore, IMS’s view that new SKU introductions of
generic products is a measure of R&D is questionable.
Finding 4. Macro-economic impact: Price control and the unstable regulatory environment
have increased the margin pressures for companies, thereby impacting their sustainability
especially small and mid-sized players. This further impacts the employment generation
potential of the industry. These factors dampen the sentiments across the industry and
potential domestic and international investors.
While the study speculates that at the macroeconomic level, price controls have a
negative impact, there is little evidence gathered in the study to support the assertion.
Nonetheless, at the macro level, price controls on commonly used pharmaceuticals
can also have a positive impact on the health of the workers in the economy, which
can lead to higher productivity, and it is problematic to draw such far-reaching
conclusions without conducting a proper analysis.
The IMS study argues that drug price controls implemented in other countries
have failed to benefit the poor. In the Philippines, the sales of regulated drugs have
declined while unregulated drug sales increased. Some generic drug producers
experienced a decline in revenues by 50% due to lower drug prices under the price
control regime, which adversely impacted their ability to launch new drugs. Simi-
larly, in China, drug price controls led to a near zero profitability of drug manufac-
turers and retailers. Since hospitals and stores did not want to give up their margins,
they started prescribing and selling more expensive unregulated drugs to remain
profitable, which hurt the availability and affordability of drugs for the poor.
The IMS study provides several recommendations. The study suggests that the
government could: (i) strengthen healthcare financing by extending universal health
coverage; (ii) invest in healthcare infrastructure; (iii) promote joint and bulk pro-
curement by state governments; (iv) establish a tax on tobacco and liquor industry
to fund the healthcare sector and subsidize essential medicines from taxes; and
(v) setup dedicated generic medicine stores. The sweeping conclusions and recom-
mendations of the study are surprisingly based on an examination of only 18 med-
icines under the 2013 DPCO and 18 comparable counterparts not under price control
regulation. The IMS study claims that the list of medicines is “representative of the
whole universe and with strong statistical significance” and validated by key stake-
holders (IMS Health 2015, p. 3).
We deepen our examination of the manner of selection of 18 medicines employed in
the IMS study. We find that these medicines collectively account for 7% of the Indian
pharmaceutical industry between 2011 and 2012. Also, the medicines are partially
regulated, that is, only some dosages of the 18 medicines are regulated and others not,
and the regulated dosages account for 77% of the overall sales during 2011–2012,
indicating that the overall share of the regulated doses of the 18 medicines is closer to
5% of the Indian pharmaceutical market. The 18 medicines represent 6.7% of the
269 medicines under the 2013 DPCO during 2013–2014, as contained in the
Pharmatrac dataset. We present in Table 6.1 the list of 18 medicines under the 2013
Table 6.1 Selection of medicines in the IMS study evaluating the effectiveness of the 2013 DPCO
3-digit Non-
medicine Representative DPCO medicine DPCO Non-DPCO counterpart DPCO 3-digit 2-digit DPCO/Non-
# code selected by IMS for comparison sales selected in IMS study sales substitutes substitutes DPCO sales
1 A10B Metformin|A10B6 5 Glimepiride|A10B4 4.95 46 59 1.01
2 J2A Fluconazole|J2A4 2.18 Ketoconazole|D1A3 1.26 14 14 1.74
3 C8A Amlodipine|C8A1 6.22 Cilnidipine|C8A24 0.28 12 32 22.14
4 C10A Atorvastatin|C10A1 13.92 Rosuvastatin|C10A6 5.31 6 39 2.62
5 C9D Losartan|C9D3 3.95 Telmisartan|C9D4 5.9 6 48 0.67
6 B1C Aspirin|B1C1 0.64 Prasugrel|B1C23 0.28 12 34 2.32
7 C7A Metoprolol|C7A29 6.4 Carvedilol|C7A19 1.21 12 42 5.3
8 A6B Bisacodyl|A6B5 0.86 Lactulose|A6A4 2.63 5 25 0.33
9 A3F Metoclopramide|A3F19 0.64 Prochlorperazine|A4B4 1.1 41 92 0.58
10 A4A Ondansetron|A4A2 4.54 Granisetron|A4A1 0.19 8 23 23.72
11 N5D Alprazolam|N5D1 2.96 Etizolam|N5C8 0.34 16 62 8.64
12 M2A Diclofenac|M2A2 7.03 Aceclofenac|M1A1 1.22 12 17 5.74
13 N2B Paracetamol|N2B1 9.48 Analgin|N2B7* 0.87 11 28 10.9
14 R6A Cetirizine|R6A3 3.01 Levocetirizine|R6A13 2.34 47 47 1.29
15 P1B Albendazole|P1B1 1.98 Mebendazole|P1B2 0.2 11 46 9.84
16 J1C Amoxycillin|J1C1 5.7 Piperacillin|J1H5 0.0 25 153 >100
17 J1F Azithromycin|J1F1 9.8 Lincomycin|J1F6 0.5 15 153 19.54
18 J1D Ceftriaxone|J1D17 11.61 Cefoperazone|J1D22 0.31 58 153 37.73
6.2 Revisiting an Evaluation of the Price Control Regulations Conducted. . .
Notes: The table shows the 18 medicines under the 2013 DPCO selected for study by IMS and 18 other medicines not under DPCO selected for comparison. The
sales are based on Pharmatrac data between January 2011 and December 2012 and measures in billions of rupees. The 3-digit and 2-digit substitutes represent
the number of other medicines under the same therapeutic category at the 3-digit or 2-digit medicine code of the medicine under price regulation. The ratio
DPCO/Non-DPCO sales show the relative size of the regulated medicine compared to the unregulated medicine
Source: Author’s calculations
*Metamizole (commonly known as Analgin) is briefly banned in India in 2013 (Bhaumik 2013; Business Standard 2014)
123
DPCO selected for study by IMS and the list of 18 other medicines not under DPCO
selected for comparison. The sales of these medicines are reported in billions of rupees
based on Pharmatrac data between January 2011 and December 2012. While IMS has
chosen only one medicine for comparison for each medicine under DPCO, there are a
large number of potentially comparable medicines within the 3-digit and 2-digit
therapeutic categories of the DPCO medicines. We identify the “3-digit and 2-digit
substitutes,” which indicate the number of other medicines under the same therapeutic
category at the 3-digit or 2-digit medicine code of the medicine under price regulation.
The ratio DPCO/Non-DPCO Sales shows the relative size of the regulated medicine
compared to the unregulated medicine. The ratio is significantly more than one in more
than half the cases, indicating that the comparison medicines chosen for the study are
significantly smaller relative to the medicines entering the 2013 DPCO.
Some medicines chosen for comparison are not the ideal choices. For example,
the choice of Metamizole, a drug banned in India in 2013 (since 1974 in Sweden and
1977 in the US due to an increased risk of agranulocytosis) as a comparison for
Paracetamol is surprising (Bhaumik 2013). Although the ban on Metamizole was
lifted in 2014, the manufacturers were required to display on packaging and promo-
tional materials the following: “The drug is indicated for severe pain or pain due to
tumor and also for bringing down temperature in refractory cases when other
antipyretics fail to do so” (Business Standard 2014). In addition, the market for
Metamizole is more than ten times smaller compared to Paracetamol. We also found
the choice of Piperacillin as a comparison to Amoxicillin surprising, because it is
more than 100 times smaller than Amoxicillin in sales.
The choices of medicines for comparison are surprising particularly because the
3-digit and 2-digit therapeutic categories contain a large number of other potential
substitutes. We compile the top-selling medicines in each of the 3-digit therapeutic
categories containing the 18 medicines selected for study by the IMS. We list the top
ten medicines including the medicine under the 2013 DPCO. For example, within
the A10B 3-digit category, Metformin is the third largest medicine in sales.
Although Glimepiride is comparable in sales to Metformin, two fixed-dose combi-
nations of Metformin outsell both Metformin and Glimepiride. Similarly, in the case
of Amoxicillin, its fixed-dose combination with Clavulanic Acid outsells the plain
medicine. Overall, as shown in Table 6.2, in six of the 18 cases, the comparison is
not present in the same 3-digit therapeutic category.1
Next, we limit the dataset to tablet and capsule formulations of the medicines chosen
in the IMS study and examine their prices over time. We compare the normalized prices
of 16 of the 18 DPCO medicines and their counterparts in the IMS study, which have
data for tablets or capsules. We plot in Fig. 6.1, the normalized prices of both prices for
each of the medicines, with solid line representing the price trend for the DPCO
1
Table 6.2 also reveals a significant limitation of the 2013 DPCO. While it controls the price of plain
medicines, its combinations are excluded from regulation. Also, several larger, often-prescribed
medicines within the same 3-digit therapeutic category are excluded. Overall, the use of relatively
smaller, and insignificant medicines for comparison cannot be described as a strength of the IMS
study design.
Table 6.2 Top-selling medicines during 2011–2012 by 3-digit therapeutic categories containing
the 18 medicines chosen for analysis in the IMS Health (2015)
DPCO IMS Sales
# Metformin medicine control (Million Rs.)
1 Glimepiride + Metformin|A10B11 13730.1
2 Glimepiride + Metformin + Pioglitazone| 7742.23
A10B36
3 Metformin|A10B6 Yes 5001.63
4 Glimepiride|A10B4 Yes 4947.46
5 Gliclazide + Metformin|A10B10 3311.11
6 Voglibose|A10B22 3236.64
7 Vildagliptin + Metformin|A10B69 2626.35
8 Sitagliptin|A10B66 2300.11
9 Sitagliptin + Metformin|A10B68 2206.07
10 Vildagliptin|A10B67 2129.55
Fluconazole
1 Fluconazole|J2A4 Yes 2184.03
2 Terbinafine|J2A9 998.62
3 Caspofungin acetate|J2A23 728.167
4 Itraconazole|J2A7 488.84
5 Amphotericin B|J2A2 414.171
6 Voriconazole|J2A14 399.022
7 Griseofulvin|J2A8 322.486
8 Ketoconazole|J2A3 Yes 239.008
9 Anidulafungin|J2A19 88.449
10 Micafungin|J2A18 75.3856
Amlodipine
1 Amlodipine|C8A1 Yes 6223.78
2 S-Amlodipine|C8A2 2369.28
3 Diltiazem|C8A6 1500.64
4 Nifedipine|C8A16 1046.18
5 Cilnidipine|C8A24 Yes 281.105
6 Verapamil|C8A23 193.037
7 Nimodipine|C8A18 125.313
8 Lercanidipine|C8A12 88.9306
9 Felodipine|C8A7 44.8254
10 Levosimendan|C8A26 13.2279
Atorvastatin
1 Atorvastatin|C10A1 Yes 13917.5
2 Rosuvastatin|C10A6 Yes 5306.67
3 Simvastatin|C10A7 521.698
4 Pitavastatin|C10A8 29.1274
5 Fluvastatin|C10A3 12.0721
6 Lovastatin|C10A4 6.73759
7 Pravastatin|C10A5 0.197357
(continued)

DPCO IMS Sales
Losartan
1 Telmisartan|C9D4 Yes 5897.52
2 Losartan|C9D3 Yes 3948.55
3 Olmesartan|C9D7 2605.03
4 Valsartan|C9D5 402.809
5 Irbesartan|C9D2 130.687
6 Candesartan|C9D1 15.5745
7 Eprosartan|C9D8 0.288236
Aspirin
1 Clopidogrel|B1C5 3366.53
2 Aspirin + Clopidogrel|B1C19 2201.65
3 Aspirin + Dipyridamole|B1C21 2011.84
4 Aspirin + Atorvastatin + Clopidogrel|B1C20 869.183
5 Tirofiban|B1C9 817.563
6 Aspirin|B1C1 Yes 643.544
7 Prasugrel|B1C23 Yes 277.624
8 Eptifibatide|B1C8 207.075
9 Abciximab|B1C7 131.896
10 Ozagrel|B1C18 54.9724
Metoprolol
1 Metoprolol|C7A29 Yes 6396.76
2 Atenolol|C7A5 2751.57
3 Nebivolol|C7A43 1520.2
4 Propranolol|C7A37 1361.38
5 Carvedilol|C7A19 Yes 1207.23
6 S-Metoprolol|C7A44 843.372
7 Bisoprolol|C7A10 802.56
8 Labetalol|C7A25 223.907
9 S-Atenolol|C7A6 54.6204
10 Sotalol|C7A38 17.0823
Bisacodyl
1 Bisacodyl|A6B5 Yes 860.362
2 Sodium Picosulphate|A6B7 455.014
3 Senna|A6B3 81.2178
4 Other contact Laxatives|A6B6 52.0171
5 Phenolpathalein|A6B4 2.2016
Metoclopramide
1 Domperidone + Pantoprazole|A3F12 6949.89
2 Domperidone + Rabeprazole|A3F13 6767.27
3 Domperidone + Omeprazole|A3F9 3662.19
4 Domperidone + Esomeprazole|A3F10 1518.44
5 Levosulpiride + Rabeprazole|A3F47 1008.97
(continued)

DPCO IMS Sales
6 Domperidone|A3F7 954.097
7 Pantoprazole + Itopride|A3F24 764.485
8 Rabeprazole + Itopride|A3F25 641.827
9 Metoclopramide|A3F19 Yes 637.557
10 Levosulpiride + Pantoprazole|A3F50 503.65
Ondansetron
1 Ondansetron|A4A2 Yes 4535.36
2 Granisetron|A4A1 Yes 191.172
3 Ramosetron|A4A7 167.628
4 Ondansetron + Omeprazole|A4A9 153.625
5 Ondansetron + Ranitidine|A4A8 78.8965
6 Palonosetron|A4A4 76.451
7 Other Ondansetron Combinations|A4A6 9.94007
8 Ondansetron + Paracetamol|A4A3 2.17127
Alprazolam
1 Alprazolam|N5D1 Yes 2963.39
2 Lorazepam|N5D11 1241.24
3 Diazepam|N5D9 711.968
4 Chlordiazepoxide|N5D7 470.713
5 Alprazolam + Propranolol|N5D4 282.26
6 Alprazolam + Sertraline|N5D5 179.576
7 Midazolam|N5D16 170.566
8 Alprazolam + Melatonin|N5D2 95.6862
9 Alprazolam + Fluoxetine|N5D15 66.1076
10 Diazepam + Propranolol|N5D10 60.6792
Diclofenac
1 Diclofenac|M2A2 Yes 7029.45
2 Nimesulide|M2A8 199.392
3 Aceclofenac|M2A1 104.348
4 Flurbiprofen|M2A3 96.7099
5 Piroxicam|M2A9 73.6313
6 Dexketoprofen|M2A15 60.2535
7 Ketoprofen|M2A5 27.4077
8 Thiocolchicoside + Diclofenac|M2A16 17.1606
9 Etoricoxib|M2A14 9.51849
10 Ibuprofen|M2A4 4.56302
Paracetamol
1 Paracetamol|N2B1 Yes 9476.23
2 Paracetamol + Tramadol|N2B3 2310.73
3 Tramadol|N2B5 1656.84
4 Analgin|N2B7 Yes 869.15
5 Pentazocine|N2B6 715.575
(continued)

DPCO IMS Sales
6 Paracetamol + Dextropropoxyphene|N2B2 558.845
7 Tramadol + Paracetamol + Domperidone| 165.815
N2B9
8 Paracetamol + Racemethionine|N2B4 115.509
9 Tramadol + Paracetamol + Serratiopeptidase| 27.0603
N2B11
10 Other Non-Narcotics and Anti-Pyretics| 1.66055
N2B8
Cetirizine
1 Montelukast + Levocetirizine|R6A42 5241.17
2 Cetirizine|R6A3 Yes 3007.91
3 Levocetirizine|R6A13 Yes 2339.21
4 Fexofenadine|R6A11 1815.43
5 Pheniramine|R6A17 1040.18
6 Hydroxyzine|R6A12 757.601
7 Cetirizine + Ambroxol|R6A25 642.991
8 Methdilazine|R6A15 432.44
9 Montelukast + Fexofenadine|R6A36 425.255
10 Loratidine|R6A14 370.29
Albendazole
1 Albendazole|P1B1 Yes 1981.72
2 Pyrantel Pamoate|P1B3 488.122
3 Albendazole + Ivermectin|P1B9 422.283
4 Mebendazole|P1B2 Yes 201.44
5 Levamisole|P1B4 133.195
6 Ivermectine|P1B5 97.6756
7 Piperazine|P1B6 89.5352
8 Fluconazole + Ivermectin|P1B13 14.9957
9 Other Anthelmintics, excluding 12.3113
Schistosomicides|P1B8
10 Albendazole + Levamisole|P1B10 5.5549
Amoxycillin
1 Amoxycillin + Clavulanic acid|J1C4 23738.8
2 Amoxycillin|J1C1 Yes 5703.74
3 Ampicillin + Cloxacillin|J1C8 2742.53
4 Ampicillin + Dicloxacillin|J1C27 942.002
5 Amoxycillin + Cloxacillin|J1C5 779.94
6 Ampicillin|J1C7 655.803
7 Amoxycillin + Dicloxacillin + Lactobacillus| 549.173
J1C28
8 Amoxycillin + Clavulanic acid + Lactobacil- 542.34
lus|J1C21
(continued)

DPCO IMS Sales
9 Amoxycillin + Dicloxacillin|J1C26 398.006
10 Amoxycillin + Cloxacillin + Lactobacillus| 309.506
J1C22
Azithromycin
1 Azithromycin|J1F1 Yes 9801.6
2 Linezolid|J1F7 2519.28
3 Erythromycin|J1F4 2013.12
4 Clarithromycin|J1F2 1930.95
5 Clindamycin|J1F3 1388.96
6 Roxithromycin|J1F10 1336.39
7 Doripenem|J1F21 600.674
8 Clindamycin + Clotrimazole|J1F16 529.315
9 Lincomycin|J1F6 Yes 501.68
10 Spiramycin|J1F12 443.986
Ceftriaxone
1 Cefixime|J1D26 15657.1
2 Ceftriaxone|J1D17 Yes 11607.9
3 Cefpodoxime|J1D16 10417.7
4 Cefuroxime|J1D12 9210.21
5 Cefoperazone + Sulbactum|J1D23 4819.05
6 Cefalexin|J1D1 4462.42
7 Cefpodoxime + Clavulanic acid|J1D37 4443.44
8 Ceftriaxone + Sulbactum|J1D18 4440.73
9 Cefotaxime|J1D13 4144.58
10 Cefixime + Ofloxacin|J1D45 4085.17
medicine. We obtain the normalized price by dividing the maximum retail price at the
SKU-level by the number of tablets in the SKU as well as the strength of the tablet to
obtain a per-milligram price. We then divide the price we observe for the medicine in
the first month they appear in the dataset, which results in the initial price of one. In
more than half of the graphs, the price trends for the DPCO and the non-DPCO
molecule vary differently over time. Using a similar procedure, we plot in Fig. 6.2
the normalized sales of these 16 medicines in their tablet or capsule form over time. We
find that the normalized sales of the DPCO and other medicines depart from each other
significantly in as many as eight cases.
A significant limitation of the IMS study is that it compares medicines that are
selected for price regulation with other medicines. As we discussed so far, any such
comparisons, however well-conceived, remain open to criticism, as different med-
icines are only imperfect substitutes with fundamental differences in their prescrip-
tion and usage patterns over time. One alternative is to examine different dosages of
the same medicine that entered price control regulation. We will exploit this insight
in our own evaluation of the efficacy of the 2013 DPCO subsequently.
130
Fig. 6.1 Normalized price trends, plotted on y-axis, of 16 of the 18 DPCO medicines and their counterparts in the IMS study, the solid line represents DPCO
medicine. Notes: The 16 DPCO medicines from left to right and then from top to bottom are Metformin, Fluconazole, Amlodipine, Atorvastatin, Losartan,
6 How Effective Are the 2013 DPCO Regulations?
Aspirin, Metoprolol, Bisacodyl, Metoclopramide, Ondansetron, Alprazolam, Diclofenac, Paracetamol, Cetirizine, Albendazole, and Azithromycin
6.2 Revisiting an Evaluation of the Price Control Regulations Conducted. . .
131
Fig. 6.2 Sales over time for 16 of the 18 DPCO medicines and their counterparts in the IMS study
We revisited the IMS study in this section primarily to highlight the difficulty in
evaluating the effectiveness of the 2013 price control regulations. In light of the
above shortcomings of the study, it is important to deepen the analysis and examine
how firms responded to the regulations.
6.3 The 2013 DPCO Controls a Declining Share

of the Indian Pharmaceutical Market
The 2013 DPCO regulated 348 medicines while more than 2900 medicines are sold
in India. One way to gauge the effectiveness of the 2013 DPCO is by its scope.
Recall that the scope of pharmaceutical regulation varied significantly since the
1970s. The 1979 DPCO controlled 347 bulk drugs covering nearly 80% of the
market. However, the proposed (but never implemented) policy of 2004 reduced the
number of medicines to 35, which covered only 20% of the market. By contrast, the
2013 DPCO has covered nearly 350 medicines. On the surface, it appears that a
significant portion of the market must be affected by the expansion of the number of
medicines under price controls in 2013.
To examine the scope of 2013 DPCO, we plot the sales of medicines under
regulation and those excluded from regulation in Fig. 6.3. We find that the sales of
regulated medicines remain constant at around 10 billion rupees while that of the
unregulated market doubled from 40 billion in 2011 to 80 billion in 2016. The share
of sales of regulated medicines decreased from 20% of the overall market in 2011 to
11% in 2016. Next, we plot the number of SKUs for the regulated and unregulated
Fig. 6.3 The sales of medicines under 2013 DPCO over time in billion rupees
6.3 The 2013 DPCO Controls a Declining Share of the Indian Pharmaceutical Market 133
Fig. 6.4 The number of unique SKUs under 2013 DPCO over time in thousands
medicines in Fig. 6.4. We find that the number is declining for the regulated
medicines from 7466 in January 2011 to 6323 in July 2016. By contrast, the number
of SKUs for the unregulated medicines increased from 45,515 to 53,361 during the
same period, indicating a potential adverse impact of regulation on the introduction
of new varieties, as the IMS study concludes. While the IMS study interprets these
numbers as reflective of investments in R&D, we hypothesize that the pharmaceu-
tical firms strategically reduced the number of SKUs in regulated medicines and
increased the number of SKUs in unregulated medicines to mitigate the adverse
impact of regulation. A close examination of the trends indicates that the number of
SKUs among the unregulated medicines remained constant until the end of 2013,
and began to increase rapidly afterward.
Next, we report the share of sales attributed to regulated medicine SKUs by 3-digit
therapeutic category. We do so for the partial list of 3-digit categories with a non-zero
percent of the market that in 2011 is likely to enter regulation. In other words, we
exclude from this list those 3-digit classes that were unaffected by the 2013 regulation,
as they would have a zero percent share of sales attributed to the regulated medicines.
Among the 127 categories in the list, there are 46 categories with less than 10% of the
market under regulation and six categories with more than 90% of the market under
regulation. Overall, for 101 3-digit category markets, the percentage of regulated
medicines by sales is less than 50, indicating that the scope of the 2013 DPCO is limited.
As noted in our discussion of the IMS study, the presence of a large number of
potential substitutes within the same 3-digit therapeutic category that are not regu-
lated allows firms to mitigate the impact of regulation. The limitation of the 2013
DPCO goes further than the number of medicines it regulates, but the extent of the
dosages within each medicine market that it regulates. Next, we examine the partial
nature of the price regulation at the medicine level Table 6.3.
Table 6.3 The percentage share of sales by regulated medicines in 3-digit therapeutic category
markets
3-digit Share in Share in Share in Share in Share in
# category 2011 2012 2013 2014 2015
1 A10B 6.17 5.95 5.3 4.72 4.11
2 A10G 70.69 69.32 59.65 56.56 53.86
3 A10H 70.88 70.59 62.53 56.65 62.85
4 A11E 0.05 0.18 0.22 0.22 0.24
5 A11X 9.03 24.76 4.96 4.75 4.73
6 A12A 0 0.19 0.39 0.3 0.14
7 A12C 78.63 80.8 78.72 77.16 74.39
8 A2A 0.73 1.1 4.42 5.7 5.85
9 A2B 4.85 5.49 4.78 4.02 3.86
10 A2C 28.59 28.4 26.54 23.14 24.77
11 A2E 2.69 1.8 2.01 0.44 0.06
12 A3A 29.16 30.7 28.33 20.96 18.76
13 A3F 5.35 4.65 3.67 2.84 2.34
14 A4A 67.85 68.15 67.58 68.53 63.66
15 A4B 21.61 19.86 17.91 15.47 13.87
16 A6B 43.8 48.96 45.21 34.14 37.48
17 A6C 44.84 40.95 39.31 37.97 37.78
18 A7A 8.88 8.17 9.18 9.66 9.14
19 A7E 41.38 36.74 34.15 30.48 27.85
20 A7G 63.14 61.81 57.55 57.17 57.08
21 B1A 7.91 7.49 9.47 5 4.31
22 B1B 64.29 69 68.31 69.17 69.46
23 B1C 32.15 36.48 39.75 36.6 33.94
24 B1D 14.66 17.17 19.91 15.23 18.45
25 B1X 28.75 15.35 12.76 8.47 7.29
26 B2D 40.93 34.64 61.87 1.25 8.92
27 B3A 7.16 7.15 5.18 4.25 4.97
28 C10A 38.83 34.53 29.75 24.38 22.05
29 C1A 93.89 92.78 89.96 91.27 92.25
30 C1B 78.75 75.95 78.64 78.28 78.58
31 C1C 16.72 15.16 9.22 6.72 5.29
32 C1E 26.01 25.05 22.17 17.51 16.08
33 C2A 37.53 30.53 23.93 20.42 6.29
34 C2B 0.19 0.27 0.1 0.06 0.17
35 C3A 19.28 19.69 11.9 9.37 7.49
36 C3C 7.36 6.77 5.52 3.69 3.1
37 C3F 94.23 98.8 98.86 98.83 98.43
38 C7A 52.86 52.55 50.9 46.99 46.86
39 C8A 60.14 61.05 58.89 51.6 47.88
40 C9A 17.21 16.88 18.9 16.11 15.62
41 C9D 32.64 28.1 23.64 18.96 17.48
(continued)
6.3 The 2013 DPCO Controls a Declining Share of the Indian Pharmaceutical Market 135

# category 2011 2012 2013 2014 2015
42 D1A 4.17 4.32 3.41 2.66 2.04
43 D2A 6.83 6.61 5.93 5.56 3.33
44 D6A 10.99 10.76 9.93 9.66 11.2
45 D6B 86.13 83 88.11 83.32 83.48
46 D7A 2.69 3.75 4.12 4.68 4.54
47 D8A 60.55 57.35 48.22 26.45 24.89
48 G2A 73.45 77.64 69.44 60.07 58.88
49 G2B 100 100 100 100 100
50 G3A 26.5 26.56 22.81 20.11 19.08
51 G3B 28.67 25.52 18.63 12.84 11.92
52 G3G 5.37 6.56 4.86 4.01 3.78
53 G3J 40.47 31.67 19.55 9.57 10.5
54 G3X 32.68 25.58 19.92 16.25 14.28
55 G4A 32.13 34.77 35.7 37.35 43.39
56 H2A 48.69 47.74 47.33 41.68 41.46
57 H3A 74.49 71.57 66.17 60.99 57.88
58 H3B 61.73 65.65 66.53 63.25 60.01
59 H4B 100 100 100 100 100
60 J1A 10.87 9.32 8.52 5.64 0.61
61 J1C 58.49 60 59.56 60.08 60.19
62 J1D 29 27.31 26 24.24 24.41
63 J1F 52.42 51.27 48.92 48.45 46.58
64 J1G 43.76 43.67 41.59 40.14 33.33
65 J1H 0.01 0 0 0 0
66 J1K 13.8 13.24 11.91 10.61 10.57
67 J1X 15.71 14.87 13.12 12.11 17.49
68 J2A 43.67 39.35 33.56 30.46 27.63
69 J3A 0.03 0.02 0.01 0 0
70 J4A 20.65 21.22 21.48 21.94 21.81
71 J4B 15.26 12.79 12.77 19.89 13.9
72 J5A 42.05 41.9 37.94 36.6 19.58
73 J5B 24.28 18.59 16.74 10.91 7.93
74 J6A 51.55 62.86 48.06 40.3 56.68
75 J6E 86.52 82.94 79.98 75.74 76.94
76 J7A 38.71 40.43 40.57 36.68 27.46
77 K1A 70.49 73.35 70.01 71.7 75.53
78 K1C 78.22 79.55 71.01 84.12 68.99
79 K2A 100 100 100 100 100
80 K5A 60.57 34.5 54.54 64.05 28.4
81 L1A 18.26 21.77 17.28 11 15.02
82 L1B 49.27 40.65 37.92 44.56 45.43
83 L1C 4.78 2.88 2.97 3.74 3.71
(continued)

# category 2011 2012 2013 2014 2015
84 L1D 41.64 35.52 42.19 40.24 38.31
85 L1X 25.12 19.98 14.48 13.14 16.31
86 L2B 9.56 11.88 9.76 8.14 10.47
87 L3A 56.87 59.64 72.3 68.69 63.84
88 L3B 4 2.35 3.27 1.02 0.5
89 L4A 30.52 26.28 25.34 21.45 23.4
90 M1A 4.81 3.33 2.58 2.23 2.05
91 M1C 19.76 19.17 25.77 15.96 11.12
92 M3A 10.64 5.76 7.52 5.43 8.27
93 M4A 52.71 43.69 35.41 22.28 20.11
94 M5C 50.48 43.18 54.47 44.51 39.86
95 N1A 94.12 92.64 94.15 98.54 98.83
96 N1B 78.4 74.56 68.89 61.37 66.54
97 N1C 64.61 42.2 37.33 36.96 36.73
98 N2A 1.93 0.18 0.06 0.52 0.05
99 N2B 24.36 26.15 23.3 20.96 18.87
100 N3A 17.85 17.08 14.8 12.24 10.28
101 N4A 53.23 53.79 46.73 41.8 42.18
102 N5A 15.54 14.7 13.29 11.63 10.77
103 N5B 3.91 3.3 3.96 4.16 7.28
104 N5D 52.21 51.65 51 42.99 44.74
105 N6A 8.21 7.78 6.39 5.05 4.53
106 N7C 5.15 3.75 3.45 3.81 3.6
107 N7E 3.51 2.17 1.28 1.32 0.61
108 P1A 0.74 0.89 0.9 0.64 0.5
109 P1B 52 61.34 52.3 46.07 44.04
110 P1C 0 0 0 0 0
111 P1D 22.75 22.3 21.6 20.07 21.35
112 P1E 35.77 38.64 30.15 34.09 37.2
113 P2A 22.29 23.06 20.04 16.76 14.94
114 R3A 9.81 8.55 7.31 6.33 5.67
115 R5D 0.18 0.04 0.01 0 0.01
116 R5E 0.06 0.02 0.02 0.01 0
117 R5F 0.02 0.02 0.02 0.04 0.03
118 R6A 17.73 16.34 13.57 11 10.05
119 S1A 2.63 2.32 1.87 1.39 1.05
120 S1D 22.3 20.56 16.76 13.34 12.17
121 S1E 31.58 34.35 31.5 32.44 36.59
122 S1F 0.3 0.3 0.2 0.13 0.1
123 S3A 32.4 30.19 29.8 28.79 22.93
124 S3B 56.58 38.59 54.69 71.86 64.73
125 V3D 4.31 5.09 7.81 6.23 7.84
(continued)
6.4 The 2013 DPCO Controls Medicine Markets Only Partially 137

# category 2011 2012 2013 2014 2015
126 V3E 41.1 47.93 55.23 58.45 58.93
127 V3F 6.64 6.63 2.08 1.3 0.98
Notes: We report the percentage share of sales by regulated medicines by 3-digit therapeutic
category during 2011–2015. The regulation comes into effect in mid-2013, but we report the
share of sales for the SKUs that will enter 2013 DPCO in 2011 and 2012. Overall, there are several
3-digit categories with relatively small fraction of the market under regulation
6.4 The 2013 DPCO Controls Medicine Markets Only

Partially
The 2013 DPCO only partially regulates the Indian pharmaceutical industry. Not
only does the DPCO exclude a large number of medicines but it also excludes
several dosage markets within many regulated medicines. To illustrate the nature of
such incomplete regulation, we compile a list of 108 medicines in their tablet or
capsule form that entered the 2013 DPCO but contained some regulated and other
unregulated dosages. We present the list in Table 6.4. We calculate the market share
of each of the dosage within the medicine market during 2011–2012 using the
Pharmatrac dataset. Some dosages have a very small market share of less than
0.01, but we include them for completeness and report their market share approxi-
mated as 0.00. At the top of the table, Aciclovir tablets are sold in four dosage
markets, 200 mg, 400 mg, 800 mg, and 1200 mg. The 200 mg and 400 mg dosage
markets are regulated, and they account for 14 and 39% market shares respectively.
The 800 mg and 1200 mg dosage markets are unregulated and account for nearly
46.5% market share. The effectiveness of the regulation is significantly affected by
such partial regulation, as firms can adjust to price controls in the regulated dosage
markets by shifting production to the unregulated dosage markets and increasing
prices in those markets.
Although the DPCO regulated some dosages, for some medicines the market
share of the regulated doses more than 90%. For example, 400 mg of Albendazole is
regulated and accounts for nearly 99% of the market. However, as we discussed in
Table 6.2, fixed-dose combinations of Albendazole, such as Albendazole + Iver-
mectin and Albendazole + Levamisole are not regulated. Also, other close plain
medicine substitutes within the same 3-digit category, such as Mebendazole are not
regulated, which undermines the effectiveness of the regulation.
We compile a similar list of partially regulated medicines in their injection or
infusion form in Table 6.5 and for medicines administered as syrups in Table 6.6.
Some injection SKUs contained in the Pharmatrac data do not report their dosage
strength. Consequently, we do not take into account these SKUs in calculating the
market shares during 2011–2012. Nonetheless, we find as many as 70 medicines
with some injection doses regulated and other unregulated and 17 such syrups.
Table 6.4 The partial or incomplete nature of the 2013 price controls for 108 essential medicine in
their tablet form
Regulated tablet Paragraph-19
Medicine|4-digit doses (market Unregulated tablet doses doses (market
# category share) (market share) share)
1 Aciclovir|J5A4 400 mg (39.40), 1200 mg (.67), 800 mg
200 mg (14.02) (45.90)
2 Albendazole|P1B1 400 mg (99.33) 200 mg (.66)
3 Allopurinol|M4A4 100 mg (83.69) 250 mg (2.89), 300 mg
(13.39), 20 mg (.01)
4 Alprazolam|N5D1 0.5 mg (56.88), 20 mg (.02), 100 mg
0.50 mg (.49), (0.00), 12.5 mg (0.00),
0.25 mg (36.25) 1.5 mg (.36), 0.125 mg
(.05), 6.25 mg (0.00),
2 mg (.18), 1 mg (5.71),
10 mg (.00), 5 mg (0.00),
15 mg (0.00)
5 Amitriptyline|N6A1 25 mg (35.95) 5 mg (.12), 10 mg (52.75),
75 mg (4.82), 50 mg
(6.34)
6 Amlodipine|C8A1 5 mg (74.59), 7.5 mg (.01), 50 mg (0.00) 10 mg (9.15)
2.5 mg (16.21)
7 Amoxycillin|J1C1 250 mg (19.79), 500 mg (3.00), 100 mg
500 mg (50.15) (.00), 50 mg (0.00),
125 mg (5.86), 200 mg
(.30), 400 mg (.28),
250 mg (20.40), 875 mg
(.20), 228.5 mg (0.00)
8 Ampicillin|J1C7 250 mg (29.84), 500 mg (.01), 125 mg
500 mg (57.66) (4.23), 2.5 mg (.02), 5 mg
(.01), 250 mg (8.18)
9 Aspirin|B1C1 75 mg (39.29), 162.5 mg (.25), 50 mg
325 mg (2.41), (3.95), 80 mg (.09),
100 mg (14.17) 650 mg (.02), 20 mg
(0.00), 150 mg (38.72),
60 mg (0.00), 163 mg
(1.05)
10 Atenolol|C7A5 50 mg (60.38), 40 mg (0.00), 500 mg 12.5 mg (.87),
100 mg (2.91) (.01), 750 mg (0.00), 25 mg (35.77)
75 mg (.02)
11 Atorvastatin|C10A1 5 mg (3.83), 20 mg (.00), 1000 mg 20 mg (28.84),
10 mg (48.11) (0.00) 80 mg (3.00),
40 mg (16.19)
12 Azathioprine|L4A3 50 mg (98.70) 25 mg (1.28)
13 Azithromycin|J1F1 250 mg (31.81), 20 mg (0.00), 250 mg
100 mg (2.81), (.17), 600 mg (0.00),
500 mg (64.77) 150 mg (.17), 500 mg
(.09), 10 mg (0.00), 50 mg
(.00), 1000 mg (.14),
200 mg (0.00)
(continued)

14 Bisacodyl|A6B5 5 mg (96.33) 10 mg (3.66)
15 Bromocriptine|N4A2 2.5 mg (58.00), 1.6 mg (.27), 0.8 mg
1.25 mg (21.72) (19.72), 5 mg (.07), 10 mg
(.20)
16 Calcium|A12A1 500 mg (1.13) 225 mg (73.75), 740 mg
(2.57), 200 mg (22.47),
500,500 mg (.05)
17 Carbamazepine|N3A1 100 mg (6.15), 200 mg (.00), 150 mg
200 mg (60.68) (0.00), 400 mg (20.21),
300 mg (12.93)
18 Carbimazole|H3B1 5 mg (36.13), 20 mg (17.12)
10 mg (46.75)
19 Cefalexin|J1D1 250 mg (14.32), 250 mg (11.84), 125 mg
500 mg (41.43) (7.55), 500 mg (2.05),
625 mg (0.00), 333 mg
(.00), 750 mg (11.88),
375 mg (10.89)
20 Cefixime|J1D26 100 mg (15.38), 50 mg (3.93), 500 mg
200 mg (79.29) (.00), 100 mg (.03),
200 mg (.43), 400 mg
(.88), 1000 mg (.02)
21 Cetirizine|R6A3 10 mg (95.06) 250 mg (0.00), 10 mg
(1.49), 5 mg (2.57),
180 mg (0.00), 20 mg
(.86)
22 Chlorambucil|L1A1 2 mg (40.38) 5 mg (59.61)
23 Chlorpheniramine| 4 mg (99.23) 2 mg (.76)
R6A4
24 Chlorpromazine| 50 mg (32.02), 10 mg (2.19), 200 mg
N5B2 100 mg (61.09), (.10)
25 mg (4.57)
25 Ciprofloxacin|J1G1 250 mg (15.93), 500 mg (0.00), 250 mg
500 mg (81.40) (0.00), 750 mg (.75),
50 mg (0.00), 125 mg
(.01), 100 mg (.23),
1000 mg (1.58), 25 mg
(.00), 200 mg (.05), 75 mg
(.00)
26 Clindamycin|J1F3 300 mg (71.20) 300 mg (15.78), 150 mg
(13.00)
27 Clomifene|G3G2 100 mg (20.56), 50 mg (10.5.00), 150 mg
50 mg (51.70) (.01), 2.5 mg (.31), 25 mg
(16.89)
28 Clopidogrel|B1C5 75 mg (97.30) 300 mg (.18),
150 mg (2.51)
(continued)

29 Cloxacillin|J1C23 250 mg (10.43), 250 mg (.97), 125 mg
500 mg (85.80) (.40), 625 mg (2.38)
30 Cyclophosphamide| 50 mg (76.23) 500 mg (23.76)
L1A3
31 Cyclosporin|L4A4 25 mg (11.15), 10 mg (.07), 25 mg (.07),
100 mg (55.29), 50 mg (1.25), 100 mg
50 mg (29.04) (3.08)
32 Danazol|G3B3 100 mg (35.15), 100 mg (.69), 200 mg
50 mg (14.93) (49.20)
33 Dapsone|J4B3 50 mg (1.03), 25 mg (3.08)
100 mg (95.87)
34 Dexamethasone| 0.5 mg (77.31) 8 mg (.30), 4 mg (1.80),
H2A5 250 mg (0.00), 200 mg
(.02), 2 mg (.46), 5 mg
(20.04), 500 mg (.01)
35 Dextromethorphan| 30 mg (11.97) 5 mg (.30), 10 mg (42.27),
R5F3 20 mg (45.45)
36 Diazepam|N5D9 5 mg (56.90), 10 mg (28.47)
2 mg (14.60)
37 Diclofenac|M1A12 50 mg (27.45) 100 mg (53.86), 75 mg
(8.90), 25 mg (.11), 50 mg
(9.18), 200 mg (.02),
150 mg (.41)
38 Didanosine|J5B4 400 mg (63.29), 250 mg (2.10), 400 mg
250 mg (30.03) (4.57)
39 Diethylcarbamazine| 50 mg (50.31) 150 mg (2.80), 100 mg
P1E2 (46.86)
40 Digoxin|C1A1 0.25 mg (.00) 250 mg (0.00)
41 Diltiazem|C8A6 60 mg (11.02), 180 mg (2.93), 60 mg 90 mg (48.84),
30 mg (20.87) (0.00), 240 mg (.01), 120 mg
20 mg (.02), 300 mg (16.28)
(0.00)
42 Domperidone|A3F7 10 mg (89.11) 5 mg (8.18), 8 mg (0.00),
40 mg (.05), 20 mg (1.96),
1 mg (.03), 6 mg (.56),
30 mg (.09), 4 mg (0.00)
43 Doxycycline|J1A6 100 mg (61.93) 500 mg (.02), 50 mg (.18),
250 mg (.03), 100 mg
(37.70), 200 mg (.10)
44 Efavirenz|J5B6 200 mg (4.07), 200 mg (4.61), 100 mg
600 mg (27.45) (.02), 600 mg (63.79),
300 mg (.01)
45 Enalapril|C9A6 2.5 mg (25.25), 20 mg (.01) 10 mg (13.89)
5 mg (60.84)
(continued)

46 Erythromycin|J1F4 250 mg (51.65), 40 mg (0.00), 125 mg
500 mg (44.08) (4.19), 333 mg (.00),
100 mg (.05), 150 mg
(0.00)
47 Ethambutol|J4A3 600 mg (13.47), 825 mg (.20), 1000 mg
200 mg (2.47), (22.72)
800 mg (56.06),
400 mg (5.05)
48 Ethinylestradiol| 0.01 mg (14.01), 1 mg (1.27), 0.02 mg (.97)
G3A18 0.05 mg (83.73)
49 Etoposide|L1C4 100 mg (23.05) 50 mg (76.94)
50 Famotidine|A2B2 20 mg (28.34) 20 mg (0.00), 50 mg
(0.00), 10 mg (.09), 40 mg
(71.56)
51 Fluconazole|J2A4 100 mg (.99), 25 mg (0.00), 400 mg
200 mg (10.93), (4.09), 10 mg (0.00),
50 mg (6.19), 20 mg (.05), 5 mg (0.00),
150 mg (77.55) 300 mg (.18)
52 Fluoxetine|N6A8 20 mg (73.12) 25 mg (0.00), 90 mg
(0.00), 10 mg (10.09),
40 mg (4.86), 60 mg
(10.43), 20 mg (1.46),
75 mg (0.00)
53 Folic acid|B3A4 1 mg (2.81), 5 mg 10 mg (.18), 5 mg (.23)
(96.76)
54 Glibenclamide|A10B1 5 mg (88.98), 1.25 mg (.27), 10 mg (.01)
2.5 mg (10.72)
55 Glyceryl Trinitrate| 0.5 mg (1.25) 6.5 mg (3.84) 2.6 mg (66.75),
C1E4 2.5 mg (12.64),
6.4 mg (15.48)
56 Griseofulvin|J2A8 250 mg (68.95) 375 mg (30.96), 150 mg
(0.00), 500 mg (.07)
57 Hydrochlorothiazide| 12.5 mg (66.48), 50 mg (.10)
C3C8 25 mg (33.40)
58 Hydroxychloroquine| 200 mg (86.80) 400 mg (13.18), 300 mg
P1D2 (0.00)
59 Hyoscine|A3A32 10 mg (.00) 20 mg (0.00)
60 Ibuprofen|M1A30 200 mg (9.17), 400 mg (.00), 600 mg
400 mg (61.25) (29.53), 300 mg (.03)
61 Imatinib Mesylate| 100 mg (5.51), 100 mg (14.55), 400 mg
L1X16 400 mg (78.26) (1.66)
62 Imipramine|N6A10 25 mg (70.66), 75 mg (8.55), 50 mg (.87),
75 mg (19.26) 10 mg (.64)
63 Isoniazide|J4A6 100 mg (17.92),
300 mg (82.08)
(continued)

64 Isosorbide Dinitrate| 20 mg (.03), 6.4 mg (0.00), 5 mg
C1E3 10 mg (57.24) (42.59), 2.6 mg (.10),
20 mg (0.00)
65 Isosorbide-5- 10 mg (11.68), 20 mg (0.00), 25 mg 60 mg (10.80),
Mononitrate|C1E1 20 mg (31.77) (1.65), 50 mg (1.71) 30 mg (36.20),
40 mg (6.17)
66 Lamivudine|J5B1 150 mg (13.02) 30 mg (.01), 300 mg (.15),
100 mg (86.80)
67 Leflunomide|M5C1 20 mg (64.27), 100 mg (.15), 5 mg (.03)
10 mg (35.52)
68 Lithium|N6A11 300 mg (28.32) 400 mg (57.45), 450 mg
(14.21), 250 mg (.00)
69 Losartan|C9D3 25 mg (28.26), 100 mg (.75), 0.25 mg
50 mg (70.98) (0.00)
70 Medroxyprogesterone| 10 mg (99.63) 100 mg (.07), 2.5 mg (.28)
G3A19
71 Mesalazine|A7E1 400 mg (41.29) 800 mg (21.69), 1200 mg
(31.40), 10 mg (1.12),
500 mg (4.48)
72 Metformin|A10B6 500 mg (62.59) 850 mg (7.05),
1000 mg
(28.36),
250 mg (1.98)
73 Methotrexate|L1B1 5 mg (10.76), 15 mg (9.46), 20 mg
2.5 mg (33.34), (0.00), 50 mg (.00)
7.5 mg (34.06),
10 mg (12.35)
74 Metoclopramide| 10 mg (81.97) 5 mg (2.43), 15 mg
A3F19 (15.60)
75 Metoprolol|C7A29 50 mg (50.68), 25 mg (2.56), 50 mg 12.5 mg
25 mg (33.43) (4.67), 100 mg (1.02), (1.73), 100 mg
0.50 mg (0.00), 0.25 mg (5.42)
(0.00), 12.5 mg (.37),
75 mg (.05)
76 Metronidazole|A7A1 400 mg (85.19), 500 mg (0.00), 1000 mg
200 mg (14.80) (0.00)
77 Metylergometrine| 0.125 mg (99.91) 0.2 mg (.07)
G2A3
78 Mifepristone|G3X2 200 mg (99.29) 1.5 mg (.27), 250 mg (.43)
79 Nifedipine|C8A16 10 mg (33.52), 20 mg (.55), 30 mg (7.11),
20 mg (53.00), 5 mg (.68)
5 mg (5.11)
80 Nitrofurantoin|G4A3 100 mg (62.61) 150 mg (11.31), 100 mg
(24.86), 50 mg (1.21)
(continued)

81 Norethisterone| 5 mg (99.62) 10 mg (.37), 50 mg (0.00),
G3A12 25 mg (0.00)
82 Ofloxacin|J1G9 100 mg (4.96), 5 mg (.07), 300 mg (1.55),
200 mg (72.70) 10 mg (.07), 2 mg (.14),
20 mg (.02), 600 mg (.14),
800 mg (.15), 250 mg
(0.00), 500 mg (0.00),
400 mg (20.07),
50 mg (.07)
83 Olanzapine|N5A5 5 mg (32.06), 20 mg (4.78), 15 mg
10 mg (38.40) (0.00), 2.5 mg (11.72),
7.5 mg (6.86), 15 mg
(6.11)
84 Omeprazole|A2C1 20 mg (86.20), 200 mg (0.00), 150 mg
40 mg (.17), (0.00), 100 mg (.00),
10 mg (1.85) 20 mg (8.39), 40 mg
(3.13), 500 mg (.07),
10 mg (.11), 250 mg (.05)
85 Ondansetron|A4A2 4 mg (88.52), 2 mg (.83), 1 mg (.00),
8 mg (10.60) 500 mg (.00)
86 Paracetamol|N2B1 500 mg (53.24) 30 mg (0.00), 1000 mg
(1.39), 240 mg (0.00),
300 mg (.74), 250 mg
(1.55), 325 mg (.01),
750 mg (.40), 125 mg
(.98), 100 mg (.01),
500 mg (0.00), 150 mg
(0.00), 600 mg (0.00),
650 mg (41.63)
87 Phenobarbitone| 60 mg (68.08), 15 mg (.00)
N3A10 30 mg (31.90)
88 Phenytoin|N3A12 50 mg (3.43), 150 mg (2.20), 25 mg
100 mg (85.98) (.23), 200 mg (.23),
300 mg (7.92)
89 Plain Vitamin C| 100 mg (.21), 375 mg (.47), 350 mg
A11X31 500 mg (99.30) (0.00)
90 Prednisolone|H2A6 20 mg (12.69), 6 mg (.28), 2.5 mg (.15),
5 mg (41.52), 40 mg (2.29), 30 mg (.80),
10 mg (42.22) 15 mg (0.00)
91 Primaquine|P1D6 7.5 mg (18.45), 45 mg (.66), 15 mg
2.5 mg (6.03) (74.83)
92 Promethazine|A4B1 25 mg (88.36), 650 mg (.05), 50 mg
10 mg (11.59) (0.00)
93 Propranolol|C7A37 10 mg (25.11), 60 mg (1.92), 8 mg (.01), 20 mg (6.30)
40 mg (41.15) 40 mg (21.43), 80 mg
(4.05)
(continued)

94 Pyrazinamide|J4A10 1500 mg (3.53), 300 mg (0.00), 250 mg
750 mg (52.41), (0.00), 1200 mg (2.35)
1000 mg (20.96),
500 mg (20.70)
95 Pyridostigmine| 60 mg (92.80) 180 mg (7.19)
N7C11
96 Quinine|P1D8 300 mg (86.44) 600 mg (7.17), 100 mg
(6.23), 150 mg (.11)
97 Rifampicin|J4A12 300 mg (21.21), 100 mg (0.00), 600 mg
450 mg (45.95), (28.92)
150 mg (3.90)
98 Salbutamol|R3A11 4 mg (67.15), 4 mg (5.32), 8 mg (5.05)
2 mg (22.45)
99 Sodium Valproate| 500 mg (28.77), 1000 mg (.18), 300 mg
N3A14 200 mg (60.00) (10.26), 750 mg (.79)
100 Spironolactone|C3A3 25 mg (42.20) 50 mg (21.73), 100 mg
(36.06)
101 Sulfasalazine|A7E3 500 mg (49.13) 1000 mg (50.86)
102 Terbutaline|R5D3 2.5 mg (33.11) 7.5 mg (8.55), 5 mg
(58.33)
103 Tramadol|N2B5 50 mg (38.59) 100 mg (40.45), 200 mg
(.46), 120 mg (0.00),
60 mg (.00), 150 mg (.05),
50 mg (20.44), 37.5 mg
(0.00)
104 Trihexyphenidyl| 2 mg (99.55) 1 mg (.00), 5 mg (.44)
N4A10
105 Verapamil|C8A23 80 mg (12.18), 240 mg (6.36), 120 mg
40 mg (48.79) (32.65)
106 Vitamin B1 plain| 100 mg (29.37) 75 mg (70.62)
A11E13
107 Warfarin|B1X9 5 mg (64.95) 1 mg (8.68), 2.5 mg (.23),
2 mg (20.56), 3 mg (5.55)
108 Zidovudine|J5B2 300 mg (74.37) 100 mg (11.89), 250 mg
(.09), 300 mg (13.47)
One may argue that it is sufficient to regulate one of the doses of an essential
medicine and that it would automatically lower prices in other dosage markets. For
example, in the market for Aciclovir, if the 800 mg tablet is more expensive because
it is unregulated, an informed consumer can potentially substitute it with two 400 mg
tablets, which are price-controlled. However, as we discussed in Chap. 3, consumers
are not aware of the choices they have, and physicians and pharmacies have an
incentive to prescribe and sell the relatively more expensive medicine because they
receive a higher profit margin in absolute terms.
their injection form
Paragraph-19
Medicine|4-digit Regulated dose dose (market
# category (market share) Unregulated dose (market share) share)
1 Adenosine|C1B1 3 mg (25.52) 30 mg (3.42), 6 mg (71.05)
2 Amikacin|J1 K4 250 mg (16.28) 100 mg (12.30), 500 mg (71.00),
50 mg (.00), 25 mg (.03),
1000 mg (.37)
3 Amiodarone|C1B3 50 mg (1.78) 150 mg (98.20)
4 Amphotericin B| 50 mg (77.97) 500 mg (0.00), 10 mg (12.46),
J2A2 100 mg (8.27), 25 mg (1.29)
5 Ampicillin|J1C7 500 mg (62.40) 250 mg (22.14), 100 mg (6.84),
1000 mg (8.60)
6 Atracurium|M3A2 10 mg (14.32) 50 mg (24.02), 25 mg (53.72),
100 mg (3.38), 2.5 mg (4.55)
7 Azithromycin|J1F1 500 mg (.00) 250 mg (0.00)
8 Betamethasone| 4 mg (99.98) 5 mg (.00)
H2A9
9 Carboplatin|L1X2 150 mg (25.45), 600 mg (.5.00)
450 mg (74.05)
10 Cefotaxime|J1D13 250 mg (16.47), 375 mg (.03), 750 mg (0.00),
125 mg (4.34), 1000 mg (52.43)
500 mg (26.70)
11 Ceftazidime|J1D20 1000 mg 500 mg (4.44), 125 mg (2.98),
(62.95), 250 mg 2000 mg (9.57)
(20.03)
12 Ceftriaxone|J1D17 1000 mg 500 mg (13.85), 125 mg (2.02),
(67.69), 250 mg 2000 mg (4.55)
(11.85)
13 Chloroquine|P1D1 40 mg (96.52) 64.5 mg (3.47)
14 Ciprofloxacin|J1G1 200 mg (68.19) 100 mg (.76), 125 mg (4.86),
400 mg (1.42), 2 mg (21.60),
250 mg (.44), 500 mg (2.42),
50 mg (.27)
15 Cisplatin|L1X3 50 mg (87.51), 100 mg (.18)
10 mg (12.30)
16 Cloxacillin|J1C23 250 mg (9.56) 500 mg (90.44)
17 Cyclophosphamide| 500 mg (27.56) 200 mg (18.13), 1000 mg
L1A3 (54.29)
18 Cyclosporin|L4A4 100 mg (53.88) 50 mg (46.11)
19 Dacarbazine| 500 mg (49.75) 200 mg (49.95), 100 mg (.30)
L1A23
20 Dexamethasone| 4 mg (99.76) 20 mg (.20), 10 mg (.00), 0.5 mg
H2A5 (0.00)
21 Diazepam|N5D9 5 mg (10.53) 10 mg (89.45)
22 Diclofenac|M1A12 25 mg (18.79) 50 mg (.40), 12.5 mg (.00),
80 mg (0.00), 75 mg (80.70),
3 mg (0.00), 100 mg (.07)
(continued)

Paragraph-19
23 Dicyclomine|A3A1 10 mg (79.45) 20 mg (20.54)
24 Digoxin|C1A1 0.25 mg (29.73) 0.5 mg (70.26)
25 Dobutamine|C1C5 50 mg (20.22) 250 mg
(79.76)
26 Dopamine|C1C7 40 mg (66.51) 200 mg (33.49)
27 Doxorubicin (Lipo- 10 mg (1.42), 20 mg (22.26), 2 mg (69.51)
somal)|L1D13 50 mg (6.78)
28 Doxorubicin 50 mg (69.12), 20 mg (1.95)
(Plain)|L1D5 10 mg (28.94)
29 Enoxaparin|B1B3 60 mg (54.18), 30 mg (0.00), 80 mg (1.59), 20 mg (3.65)
40 mg (40.56) 300 mg (.01)
30 Esmolol|C7A23 10 mg (20.12) 100 mg (79.87)
31 Fluorouracil|L1B5 250 mg (11.71) 50 mg (1.30), 500 mg (86.98)
32 Gemcitabine| 200 mg (25.56), 1400 mg (6.25)
L1B10 1000 mg
(68.18)
33 Gentamicin|J1 K1 10 mg (.02), 4 mg (0.00), 5 mg (0.00), 80 mg
40 mg (8.31) (87.69), 60 mg (1.13), 20 mg
(2.79), 800 mg (.00)
34 Glyceryl Trinitrate| 5 mg (45.93) 50 mg (16.35), 25 mg (37.70)
C1E4
35 Haloperidol|N5B9 5 mg (67.62) 50 mg (31.88), 0.25 mg (.46)
36 Hydrocortisone| 400 mg (.83), 40 mg (.15), 250 mg (.07),
H2A7 200 mg (14.65), 500 mg (.97), 25 mg (0.00),
100 mg (82.26) 1000 mg (.81), 125 mg (.20)
37 Hyoscine|A3A32 20 mg (99.86) 250 mg (.14)
38 Ifosfamide|L1A4 1000 mg (3.19) 500 mg (96.80)
39 Ketamine|N1B2 10 mg (4.53), 100 mg (16.00), 500 mg (8.01)
50 mg (71.44)
40 Lorazepam|N5D11 2 mg (99.98) 1 mg (.00)
41 Mesna|V3D5 200 mg (26.15) 600 mg (73.66), 100 mg (.17)
42 Methotrexate|L1B1 50 mg (49.52) 25 mg (.57), 1000 mg (2.56),
500 mg (16.23), 15 mg (30.37),
250 mg (.00), 20 mg (0.00),
7.5 mg (.69)
43 Methyl Predniso- 40 mg (19.85) 1000 mg (30.59), 80 mg (17.37),
lone|H2A8 250 mg (0.00), 500 mg (16.68),
125 mg (15.47)
44 Metoclopramide| 5 mg (96.91) 10 mg (3.07)
A3F19
45 Metoprolol|C7A29 1 mg (71.51) 5 mg (28.47)
46 Metronidazole| 500 mg (99.72) 100 mg (.28)
A7A1
47 Metylergometrine| 0.20 mg (5.11), 1 mg (.00), 0.125 mg (1.11)
G2A3 0.2 mg (93.76)
(continued)

Paragraph-19
48 Midazolam|N5D16 5 mg (17.80), 10 mg (1.88), 7.5 mg (.72)
1 mg (79.58)
49 Mitomycin|L1D8 10 mg (44.79) 2 mg (30.53), 40 mg (24.67)
50 Neostigmine| 0.5 mg (74.37) 15 mg (.77), 2.5 mg (24.84)
N7C10
51 Ondansetron|A4A2 2 mg (48.29) 50 mg (0.00), 4 mg (42.93),
8 mg (8.77)
52 Oxaliplatin|L1X4 50 mg (31.22) 100 mg (68.76)
53 Paclitaxel|L1C8 30 mg (3.06) 300 mg (22.13), 260 mg (27.20),
200 mg (.34), 100 mg (38.34),
110 mg (.05), 6 mg (.10),
250 mg (8.72)
54 Pantoprazole|A2C4 40 mg (.00) 20 mg (0.00), 60 mg (0.00)
55 Paracetamol|N2B1 150 mg (27.61) 500 mg (3.29), 125 mg (1.28),
40 mg (.00), 10 mg (7.78),
1000 mg (59.93), 650 mg (.01),
100 mg (.05)
56 Pheniramine| 22.75 mg 25 mg (.37)
R6A17 (99.62)
57 Phytomenadione| 10 mg (61.66) 1 mg (38.33)
B1A5
58 Prednisolone|H2A6 20 mg (7.65) 500 mg (5.03), 2.5 mg (75.51),
1000 mg (11.78)
59 Promethazine| 25 mg (99.86) 40 mg (.14)
A4B1
60 Protamine|V3E4 10 mg (65.29) 50 mg (34.70)
61 Quinine|P1D8 300 mg (92.44) 600 mg (2.18), 150 mg (5.36)
62 Ranitidine|A2B4 25 mg (41.00) 50 mg (27.45), 20 mg (0.00),
75 mg (.11), 40 mg (.17),
150 mg (31.27)
63 Streptomycin| 750 mg (81.40) 0.75 mg (18.60)
J4A18
64 Suxamethonium| 50 mg (86.16) 500 mg (6.13), 100 mg (7.69)
M3A11
65 Testosterone|G3B2 100 mg (10.23), 40 mg (.12),
250 mg (62.02), 200 mg (.00)
66 Tramadol|N2B5 50 mg (21.56) 100 mg (78.27), 200 mg (.15)
67 Vancomycin|J1X2 1000 mg (5.30), 250 mg (7.38)
500 mg (87.31)
68 Verapamil|C8A23 2.5 mg (53.33) 5 mg (46.66)
69 Vinblastine|L1C1 10 mg (99.02) 1 mg (.97)
70 Vincristine|L1C2 1 mg (99.41) 2 mg (.57)
their syrup form
Medicine|4-digit Regulated dose
# category (market share) Unregulated dose (market share)
1 Albendazole|P1B1 200 mg (87.18) 400 mg (12.81)
2 Amoxycillin|J1C1 125 mg (79.44) 400 mg (.40), 250 mg (19.81), 50 mg (.03),
100 mg (.02), 200 mg (.25)
3 Ampicillin|J1C7 125 mg (77.00) 250 mg (23.00)
4 Azithromycin|J1F1 100 mg (41.79) 2000 mg (.75), 250 mg (.56), 50 mg (.15), 500 mg
(.02), 200 mg (55.88), 125 mg (.62), 20 mg (.10),
40 mg (.10)
5 Cefalexin|J1D1 125 mg (49.08) 150 mg (0.00), 250 mg (50.86), 500 mg (.03)
6 Cetirizine|R6A3 5 mg (96.05) 10 mg (.70), 1 mg (3.25)
7 Chloroquine|P1D1 50 mg (85.83) 80 mg (10.68), 125 mg (.28), 160 mg (0.00),
250 mg (2.88), 100 mg (.33)
8 Domperidone|A3F7 1 mg (93.30) 5 mg (1.74), 10 mg (4.96)
9 Erythromycin|J1F4 125 mg (64.33) 100 mg (35.61), 250 mg (.03), 50 mg (.00)
10 Ibuprofen|M1A30 100 mg (74.47) 200 mg (25.53)
11 Metronidazole|A7A1 100 mg (4.84) 125 mg (6.30), 200 mg (88.84)
12 Ofloxacin|J1G9 50 mg (64.94) 400 mg (.74), 100 mg (30.76), 200 mg (3.56)
13 Ondansetron|A4A2 2 mg (97.98) 4 mg (1.50), 12 mg (.50)
14 Paracetamol|N2B1 125 mg (26.06) 250 mg (48.24), 156.25 mg (.25), 60 mg (.00),
156 mg (.00), 240 mg (.00), 100 mg (.20), 150 mg
(1.19), 500 mg (.15), 650 mg (.02), 120 mg
(23.80)
15 Piperazine|P1B6 750 mg (98.81) 500 mg (1.17)
16 Promethazine|A4B1 5 mg (99.93) 250 mg (.05), 125 mg (.02)
17 Sodium Valproate| 200 mg (99.41) 100 mg (.57)
N3A14
After the NPPA fixed prices of several medicines in 2013, it noticed that the prices
of several anti-diabetic medicines that are not regulated but serve as close substitutes
(such as Glimepiride for Metformin in the IMS study) were brought under price
regulation by invoking the 19th Paragraph of the 2013 DPCO, which applies to the
fixation of ceiling prices under special circumstances (DPCO 2013, p. 17):
Notwithstanding anything contained in this order, the Government may, in case of extra-
ordinary circumstances, if it considers necessary so to do in public interest, fix the ceiling
price or retail price of any Drug for such period, as it may deem fit and where the ceiling
price or retail price of the drug is already fixed and notified, the Government may allow an
increase or decrease in the ceiling price or the retail price, as the case may be, irrespective of
annual wholesale price index for that year.
Using paragraph-19, the NPPA fixed the prices of 108 medicines in mid-2014
although they were not initially regulated under the 2013 DPCO, and were not
included in the National List of Essential Medicines in 2011. In some cases, new
dosages of previously price-controlled medicines were added to the list. For exam-
ple, 10 mg tablets of Amlodipine were added to the list of regulated medicines after
6.5 The 2013 DPCO Did Not Lower Prices of Regulated Medicines Overall 149
2.5 mg and 5 mg were initially included. Similarly, 12.5 mg and 25 mg tablets of

Atenolol were added to the initial list of 50 mg and 100 mg doses under price
regulation. The move indicates the potential weakness the NPPA identified in the
2013 DPCO. However, due to considerable opposition from the industry as well as
noncompliance, the government ended up withdrawing the regulation of additional
medicines and dosages under paragraph 19.
The NPPA’s move to expand medicines by invoking paragraph 19 was met with
resistance by the pharmaceutical industry. The Indian Pharmaceutical Alliance and the
OPPI filed lawsuits on behalf of several pharmaceutical companies questioning the
order (Nautiyal 2014b). The pharmaceutical firms and the pharmacists’ trade associa-
tion raised concerns that the move would result in significant losses (Nautiyal 2014c):
Pharma companies feel that NPPA action may lead to a business loss of Rs. 600 crore which
can impact the annual turnover to the tune of Rs. 6000 crore under the diabetes and cardio-
vascular segments. The drugs that will become cheaper would include atorvastatin,
gliclazide, glimepiride, heparin, metolazone propranolol, ramipril, rosuvastatin, simvastatin,
telmisartan, terazosin, torasemide, trimetazidine and valsartan among others. Retail trade
associations inform that they have not received any revised price list of 108 nonscheduled
formulations from the manufacturers, the state drug regulator says that it is awaiting an
intimation from the government on its implementation.
In the interim, companies such as Pfizer, Cipla, and Sanofi lowered prices on some
diabetic medicines previously not listed under 2013 DPCO and lobbied against the
order directly with the union minister for chemicals and fertilizers (Nautiyal 2014c). In
a surprise move, the Indian government rolled back the NPPA’s invocation of para-
graph 19 by directing its Department of Pharmaceuticals in the Ministry of Chemicals
and Fertilizers to withdraw its guidelines with immediate effect (Nautiyal 2014c). The
OPPI noted that they appreciated the government’s decision to withdraw and that they
look forward to working with the government toward a common goal (Nautiyal 2014c).
6.5 The 2013 DPCO Did Not Lower Prices of Regulated

Medicines Overall
The extent of decline in prices is an important indicator of the effectiveness of design

of the price cap regulation. The government chose to set as the ceiling price the simple
average of the prices of SKUs with more than 1% market share. In this section, we
examine the extent of price changes in the regulated SKUs of various medicines
brought under price controls. We cannot easily compare the prices of a medicine
across tablets, injections, and syrups. Therefore, we first restrict ourselves to the
analysis of prices for tablets. We also cannot directly compare the prices of SKUs, as
different SKUs contain different numbers of tablets and also different dosage
strengths. We normalize the price of the regulated doses of medicines and plot the
normalized price per milligram of a tablet. Since different SKUs are sold at different
prices, we weigh the price of each SKU by the number of units it sells to obtain a
weighted, normalized, per-milligram tablet price. We also exclude a small number of
combination medicines such as Amoxicillin Clavulanic Acid, as it is difficult to

normalize the price of a medicine that contains more than one ingredient in different
dosages. We further normalize the prices of different medicines with their initial price
at the beginning of the dataset. As a result, the price of the composite medicine
composed of all the regulated tablet medicines is set at one in January 2011.
We plot the evolution over time of the weighted price in Fig. 6.5. The price starts
at one due to normalization and increases by 30% in the year before the 2013 DPCO
implementation begins. Recall that the NPPA selected prices for May 2012 to
estimate the ceiling price as the simple average price of SKUs with more than 1%
market share. The prices sharply increased in May 2012 from approximately
1.1–1.25, which inflated the ceiling price. We then see a sharp decline in prices
once the implementation of DPCO began in August 2013 to 1.1, the level before
May 2012, and then steadily rises to 1.3 by mid-2016. The figure indicates that there
is no perceptible decline in the price index of regulated medicines overall. Also, a
suspicious increase in price coinciding with May 2012 and decline coinciding with
August 2013, suggests that the design and implementation of the 2013 DPCO are
likely compromised by the coordinated action by firms in the market.
One concern with Fig. 6.5 is that it includes a large number of relatively small
firms, whose actions can affect the overall trends. Therefore, we exclude from the
price index, SKUs with more than 1% market share, calculated on a monthly basis
from the beginning of the dataset, and plot the index over time in Fig. 6.6. The
patterns we find in Fig. 6.6 are similar to those in Fig. 6.5, but the price index does
not reach the high of 1.3 before the implementation of the DPCO. The trends in
Fig. 6.6 confirm that the extraordinary period of high prices in the year before
regulation is not driven by the small SKUs with less than 1% market share charging
Fig. 6.5 Weighted price of regulated medicines in tablet form over time
6.5 The 2013 DPCO Did Not Lower Prices of Regulated Medicines Overall 151
Fig. 6.6 Weighted price of regulated medicines in tablet form over time, excluding SKUs with 1%
market share
Fig. 6.7 Weighted price of regulated medicines in injection form over time
high prices, but due to the pricing choices of the large SKUs that contributed to the
determination of the ceiling price eventually.
We repeat the analysis for drug types other than tablets and find similar results. In
Fig. 6.7, we plot the price index for injections and find an increase much larger than that
observed for Tablets. We find an increase of 50% in May 2012 compared to the initial
level of one in January 2011. In Fig. 6.8, we plot the price index for syrup and
Fig. 6.8 Weighted price of regulated medicines in syrup form over time
Fig. 6.9 Weighted price of top 3 SKUs of regulated medicines in tablet form over time
suspension SKUs that entered the 2013 DPCO and find a similar increase in the price
index to 1.3 in May 2012 and although the index declines to 1.1 in late 2013, it then
steadily increases to 1.4. We also restrict the SKUs to top three by market share and
repeat the analysis. We plot the price index as well as the aggregate market share of the
top 3 SKUs in Fig. 6.9. The price index increases to approximately 1.15 in May 2012
and the aggregate market share of the top three SKUs increases by 2% from 87.5 to 89.5.
6.6 Some Regulated Medicines Experienced a Decline in Prices 153
6.6 Some Regulated Medicines Experienced a Decline

in Prices
We examine the changes in the price index for each medicine to identify medicines
that experienced a decrease in prices. In Table 6.7, we compiled the list of medicines
and prices at four points during the 5-year period starting January 2011. We show the
price index in January 2011, which is by definition one. Next, we list the price index
in May 2012, as the NPPA utilized the prices from this month to determine the
ceiling price. We also list the price index for August 2013, when the implementation
of DPCO began, and for December 2015, the end of the 5 year period. Among the
128 medicines in the list, the price index decreased for 40 medicines, even though
only marginally in several cases. The price index decreased by more than half for
only four of the 128 medicines during this period, although the DPCO aimed at
lowering prices by half and tinkered with the appropriate the method to average
market prices to achieve that objective. The price index increased significantly in the
interim for some of these medicines. For example, the price index for Biscodyl
increased to 1.46 in May 2012 and for Imatinib Mesylate to 1.21 in August 2013.
The price index varied between 1 and 2 for the next 40 medicines on the list,
indicating that the prices doubled despite the price cap regulation.
Table 6.7 The weighted price index for regulated medicines over time
# Medicine|4-digit category Jan 2011 May 2012 August 2013 December 2015
1 Clindamycin|J1F3 1 1.14 0.38 0.36
2 Ciprofloxacin|S3A2 1 1.04 0.05 0.38
3 Testosterone|G3B2 1 0.78 0.61 0.48
4 Procarbazine|L1X19 1 0.54 0.6 0.49
5 Warfarin|B1X9 1 1.13 0.74 0.54
6 Cyclophosphamide|L1A3 1 1.14 0.82 0.61
7 Amitriptyline|N6A1 1 1.19 0.61 0.61
8 Ritonavir|J5B9 1 1.87 1 0.63
9 Flutamide|L2B5 1 2.09 1.79 0.66
10 Zidovudine|J5B2 1 1.06 1.05 0.66
11 Vitamin B1 plain|A11E13 1 0.62 1.24 0.68
12 Leflunomide|M5C1 1 1.04 0.71 0.7
13 Trihexyphenidyl|N4A10 1 1.3 0.66 0.72
14 Metoclopramide|A3F19 1 0.81 0.7 0.72
15 Neostigmine|N7C10 1 1.14 0.67 0.75
16 Salbutamol|R3A11 1 0.88 1.15 0.76
17 Chlorpromazine|N5B2 1 0.53 0.58 0.77
18 Bisacodyl|A6B5 1 1.46 0.76 0.78
19 Metoprolol|C7A29 1 1.03 0.8 0.78
20 Clomifene|G3G2 1 0.92 0.61 0.81
(continued)

21 Ethinylestradiol|G3A18 1 1.19 0.95 0.82
22 Olanzapine|N5A5 1 1.05 0.8 0.82
23 Chlorambucil|L1A1 1 0.91 0.91 0.82
24 Imatinib Mesylate|L1X16 1 1.05 1.21 0.83
25 Cyclosporin|L4A4 1 1.16 0.96 0.83
26 Acetazolamide systemic|S1D2 1 1 0.51 0.83
27 Dapsone|J4B3 1 1.05 0.88 0.84
28 Fluconazole|D1A17 1 1.18 0.31 0.85
29 Amiodarone|C1B3 1 1.1 0.87 0.85
30 Glyceryl Trinitrate|C1E4 1 1.1 0.96 0.87
31 Azathioprine|L4A3 1 0.79 0.79 0.88
32 Sodium Valproate|N3A14 1 1.34 0.92 0.88
33 Ampicillin|J1C7 1 1.31 1.08 0.89
34 Verapamil|C8A23 1 0.94 1.03 0.9
35 Cetirizine|R6A3 1 1.43 0.88 0.9
36 Promethazine|A4B1 1 0.93 0.89 0.9
37 Pyrimethamine|P1D3 1 0.99 0.99 0.94
38 Dexamethasone|H2A5 1 1.17 1.22 0.95
39 Lithium|N6A11 1 1.14 0.78 0.98
40 Colchicine|M4A2 1 0.78 0.9 0.98
41 Diloxanide|P1A4 1 1.15 1.27 1
42 Didanosine|J5B4 1 1.05 1.02 1
43 Famotidine|A2B2 1 0.89 1.29 1.01
44 Imipramine|N6A10 1 1.04 1.01 1.01
45 Methotrexate|L1B1 1 0.83 0.93 1.02
46 Penicillamine|M1C5 1 0.66 0.95 1.02
47 Norethisterone|G3A12 1 1.2 1.02 1.03
48 Atorvastatin|C10A1 1 1.17 0.88 1.04
49 Hyoscine|A3A32 1 1.7 0.56 1.04
50 Fluconazole|J2A4 1 1.23 1.12 1.04
51 Diazepam|N5D9 1 1.34 0.84 1.04
52 Paracetamol|N2B1 1 1.13 0.97 1.05
53 Isoniazide|J4A6 1 1.1 0.61 1.05
54 Hydroxychloroquine|P1D2 1 0.73 0.67 1.05
55 Metylergometrine|G2A3 1 1.08 0.77 1.06
56 Dextromethorphan|R5F3 1 1.04 1.06 1.06
57 Mefloquine|P1D18 1 1.06 1.1 1.06
58 Cefalexin|J1D1 1 1.52 0.95 1.07
59 Lamivudine|J5B1 1 0.77 1.04 1.08
60 Domperidone|A3F7 1 1.08 0.97 1.09
61 Clofazimine|J4B2 1 1.03 0.83 1.09
62 Losartan|C9D3 1 1.17 1.02 1.11
(continued)
6.6 Some Regulated Medicines Experienced a Decline in Prices 155

63 Cefixime|J1D26 1 1.2 1.01 1.12
64 Tamoxifen|L2B1 1 1.29 0.88 1.12
65 Folic acid|B3A4 1 1.41 0.9 1.13
66 Fluoxetine|N6A8 1 1.2 1.04 1.14
67 Primaquine|P1D6 1 1.28 1.27 1.14
68 Phenobarbitone|N3A10 1 1.92 0.76 1.14
69 Mercaptopurine|L1B8 1 1.04 1.04 1.15
70 Propranolol|C7A37 1 1.24 1.07 1.15
71 Nitrofurantoin|G4A3 1 1.07 1.01 1.15
72 Diclofenac|M1A12 1 1.39 0.99 1.15
73 Albendazole|P1B1 1 1.33 0.96 1.15
74 Spironolactone|C3A3 1 0.98 1.02 1.16
75 Sulfasalazine|A7E3 1 1.36 1.42 1.17
76 Ciprofloxacin|J1G1 1 1.43 1.86 1.17
77 Aspirin|B1C1 1 0.97 0.3 1.19
78 Amlodipine|C8A1 1 1.09 1.11 1.19
79 Carbamazepine|N3A1 1 1.21 1.48 1.2
80 Phenytoin|N3A12 1 1.17 0.9 1.21
81 Metformin|A10B6 1 1.17 1.13 1.22
82 Ondansetron|A4A2 1 1.22 1.06 1.22
83 Azithromycin|J1F1 1 1.25 1.09 1.22
84 Metronidazole|A7A1 1 1.22 1.22 1.24
85 Hydrochlorothiazide|C3C8 1 1.1 1.07 1.26
86 Plain Vitamin C|A11X31 1 4.14 1.33 1.29
87 Melphalan|L1A5 1 1.36 1.39 1.29
88 Allopurinol|M4A4 1 1.23 1.82 1.31
89 Stavudine|J5B3 1 1.52 1.52 1.32
90 Atenolol|C7A5 1 1.38 1.16 1.33
91 Nifedipine|C8A16 1 1.31 1.39 1.33
92 Bromocriptine|N4A2 1 1.25 1.38 1.36
93 Aciclovir|J5A4 1 1.09 1.07 1.38
94 Isosorbide Dinitrate|C1E3 1 1.04 0.37 1.4
95 Diltiazem|C8A6 1 1.11 1.02 1.41
96 Ibuprofen|M1A30 1 0.92 0.78 1.42
97 Digoxin|C1A1 1 1.41 0.86 1.43
98 Erythromycin|J1F4 1 1.59 1.89 1.43
99 Amoxycillin|J1C1 1 1.69 1.47 1.44
100 Enalapril|C9A6 1 1.26 1.3 1.5
101 Glibenclamide|A10B1 1 1.25 1.51 1.5
102 Clopidogrel|B1C5 1 1.16 1.19 1.51
103 Tramadol|N2B5 1 1.88 1.11 1.54
104 Danazol|G3B3 1 1.34 1.29 1.56
(continued)

105 Terbutaline|R5D3 1 3.16 3.04 1.57
106 Carbimazole|H3B1 1 1.17 1.22 1.57
107 Isosorbide-5-Mononitrate| 1 1.32 1.17 1.59
C1E1
108 Alprazolam|N5D1 1 1.37 1.15 1.61
109 Omeprazole|A2C1 1 1.48 1.5 1.62
110 Ofloxacin|J1G9 1 1.33 1.35 1.67
111 Rifampicin|J4A12 1 1.15 1.57 1.68
112 Efavirenz|J5B6 1 0.94 1.78 1.7
113 Medroxyprogesterone|G3A19 1 1.08 1.15 1.72
114 Mesalazine|A7E1 1 1.29 1.3 1.82
115 Mifepristone|G3X2 1 1.34 1.5 1.88
116 Pyridostigmine|N7C11 1 1.24 1.78 1.91
117 Ethambutol|J4A3 1 1.27 1.73 1.94
118 Pyrazinamide|J4A10 1 1.71 1.34 1.95
119 Diethylcarbamazine|P1E2 1 1.26 1.34 1.96
120 Quinine|P1D8 1 1.21 1.33 2
121 Indinavir|J5B8 1 1.2 1.02 2.17
122 Methyldopa|C2A7 1 1.02 1.1 2.45
123 Doxycycline|J1A6 1 1.97 2.41 2.64
124 Chlorpheniramine|R6A4 1 1.21 1.96 3.27
125 Prednisolone|H2A6 1 1.81 3.06 4.02
126 Raloxifene|G3 J2 1 1.81 1.87 4.07
127 Cloxacillin|J1C23 1 0.97 1.39 4.27
128 Griseofulvin|J2A8 1 2.21 2.67 7.2
Notwithstanding these price trends, it is difficult to assess the effectiveness of the

regulation, as we do not know how the prices would have changed in the absence of
the price cap regulation. One may argue that the regulation prevented further,
significant increases in prices. As we noted earlier in discussing the IMS study,
comparing the prices of different medicines can lead to unreliable conclusions.
Similarly, limiting the focus to regulated formulations can also lead to inaccurate
conclusions. However, the patterns are useful to argue that partial regulation has not
managed to lower the prices of several regulated medicines formulations in absolute
terms.
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Chapter 7
Firm Strategies to Mitigate the Impact
of Price Control Regulation
7.1 Introduction
In the previous chapter, we examine the limitations in the design of the 2013 DPCO.
It is reasonable to expect that pharmaceutical firms likely to be affected by the
regulation undertook actions to mitigate their impact. Because of such strategic
actions, regulations, despite being well-intentioned, can sometimes make matters
worse (Noll 1989). Have the 2013 DPCO regulations made consumers worse-off
than they were before? In this chapter, we examine some of the strategies firms used
to mitigate the impact of price controls. We are aware of more strategies than we
discuss below. Documenting the larger set of firm strategies is part of our ongoing
research agenda.
7.2 Coordinated Price Increases Before Regulation
Glazer and McMillan (1992) note firms that are going to be subject to regulation are
aware of them well before the actual passage of legislation. Therefore, firms under
the threat of regulation can undertake actions, both independently and as a group, to
reduce the probability of regulation as well as to mitigate the impact of regulation.
Ellison and Wolfram (2006) show that those firms that are more vulnerable to
regulation coordinated to lower prices to forestall the 1993 healthcare reform in
the US. Similarly, in India, the pharmaceutical industry coordinated through its
industry associations and lobby groups, as the demand for broader and more
effective regulation of drug prices in India for more than a decade between 2002
and 2013. As noted in Chap. 2, the deliberations during this period involved the
formation of several committees and drafting of many proposals and reports. We
begin this chapter by documenting several instances of a coordinated response by
pharmaceutical firms to forestall or influence in their favor the 2013 DPCO.

160 7 Firm Strategies to Mitigate the Impact of Price Control Regulation
First, the pharmaceutical industry effectively coordinated to oppose cost-based

regulated and the idea of controlling all essential medicines. After the Supreme
Court of India stayed the implementation of the 2002 Pharmaceutical Policy, the
government was reluctant to control the prices of all essential medicines and filed an
appeal to implement the 2002 policy (The Financial Express 2005). Since the
Supreme Court refused to reconsider its judgment, the government set up the Sen
Committee to explore alternative options to price control. The Sen Committee held
several meetings with drug industry associations and with other stakeholders such
as the citizen groups. Several industry experts expressed their concerns about
cost-based price regulation due to its hidden influence on quality and innovation
(Ray 2013). The Committee, therefore, concluded that the government should
regulate the prices of medicines in accordance with a ceiling price, as opposed to a
uniform price (The Sen Committee 2005). At the same time, it highlighted the risk of
effort diversion when imposing a ceiling price (i.e., the movement from controlled to
non-controlled drugs, making controlled drugs fall out of the market). To avoid this,
the committee recommended the coverage of all formulations of the same drug, as
well as the price monitoring of all therapeutic substitutes. However, the government
disapproved some of the recommendations (Deshpande 2006). It released a new
draft policy based on the recommendations of the committee in December 2005, but
did not disclose the section regarding price regulation (Balakrishnan 2006).
Second, the industry associations argued for partial regulation, counter to the
recommendations of the Sen Committee. The pharmaceutical firms were willing to
accept the control of prices of all drugs on the NLEM – but only the strengths that
were included in the NLEM and no other formulations (Mathew 2006). In order to
address the issue of price control, the government set up a new committee, highly
represented by the industry – it concluded that the 354 drugs on the NLEM (2003)
and their formulations did not need to be regulated since some of the prices were
considered ‘reasonable’ by the industry. Despite this, the government wanted to
keep the option of cost-based price regulation open for discussion and instituted a
Pharma Advisory Forum, which, as industry representatives argued, was tilted in
favor of the regulator and the ministry (Mukherjee 2006).
Third, the pharmaceutical firms also came together to preempt regulation by
advocating voluntary self-regulation. Uncertain about the outcome of the discus-
sions of the Advisory Forum, industry associations proposed that they would
voluntarily lower the prices of several medicines. Malhotra (2010) notes that
11 companies agreed to reduce the prices of 886 SKUs by October 2006. These
firms included Alembic, Alkem Laboratories, Cadila Healthcare, Cipla, Emcure
Pharmaceuticals, Lupin, Medley Pharmaceuticals, Nicholas Piramal, Ranbaxy Lab-
oratories, Unichem Laboratories, and Wockhardt. Malhotra (2010) finds that the
drugs included in the voluntary agreement were not the essential medicines, and
even included formulations of traditional medicine. Such a coordinated response was
effective in delaying the regulation, as contemporaneous press statements highlight:
“As a result of the pulling of various forces and interest groups it appears that the
Cabinet may defer any decision of finalizing the policy and might refer it either to a
Group of Ministers or a Committee of Secretaries to formulate a consensus that
seems to be elusive till now” (The Hindu Business Line 2007). The Minister of
7.3 Evidence of Coordinated Price Increase in Regulated and Unregulated. . . 161
Chemicals and Fertilizers blamed the industry lobby for the delay in the implemen-
tation of the policy, “We have been trying hard to get the policy cleared for long. But
it is still stuck with the Cabinet. You know, the private lobby is so strong, and they
have been trying to stop it” (PharmaQuest 2009). The policy proposal remained with
the GoM until 2012 when the 2012 NPPP was announced. Although the Supreme
Court was leaning towards maintaining the cost-based method of pricing, the GoM
finally decided on the market-based approach. Moreover, it overruled the Health
Ministry’s proposal to fix the price cap based on the average price of the three lowest
priced brands and instead recommended that the ceiling price is calculated based on
the three top-selling brands (Unnikrishnan 2012a).
Fourth, the industry argued for a market-based regulation and for the ceiling price
to be based on the average of the MRP of top-three SKUs in the market by sales
(Mathew 2005). After much criticism, the ceiling prices were calculated based on the
simple average of all brands having 1% or more market share. Although this was
more acceptable than the initial suggestion, it still determined the maximum price
based on the top brands and ensured higher profits for pharmaceutical companies in
comparison to the cost-based alternative. As such, the reduction in prices using the
market-based formula were inferior to the reduction in prices using the cost-based
formula, which was still being used under the 1995 DPCO (Gopakumar 2017).
According to a statement by the managing trustee of LOCOST at the time, “Bulk
drug prices left to the market can lead to cartelization on vital drugs. In some vital
drugs (like anti-TB Rifampicin) only 2–3 major manufacturers are present. The
government has no recourse if bulk drug prices shoot up without reason (or with
reason). Smaller manufacturers for all drugs will have to rely on higher priced local
manufacturers of bulk drugs. This will render smaller manufacturers of formulations
uncompetitive” (Pradhan 2011). Although pharmaceutical companies maintained
that the price control policy would affect their profitability, they pushed for the
market-based approach, as it would allow them to set their profit margins, provided
the prices of their products do not exceed the ceiling prices. An account by one of the
industry lobbies stated, “Though the average profitability of the pharmaceutical
industry will be impacted badly by about 25%, the Indian Pharmaceutical Alliance
(IPA) is reconciled to the new policy as it moves away from the intrusive and opaque
pricing regime to a more transparent system of pricing” (Unnikrishnan 2012b).
Finally, we argue that the pharmaceutical firms timed their coordinated price
increases just before May 2012, likely indicating their knowledge of the policy
process and their influence on its timing and content.
7.3 Evidence of Coordinated Price Increase in Regulated

and Unregulated Dosage Markets
We begin by examining the price index developed in the previous chapter for
regulated and unregulated doses of the partially regulated medicines. We computed
separately the weighted, normalized, per-milligram prices for regulated and
Fig. 7.1 Comparing the price index for regulated and unregulated doses of medicines in their
tablet form
unregulated doses of partially regulated medicines and plotted the price indices in
Fig. 7.1. We find that the price index increased much more for the unregulated doses
of the medicines that entered the regulation. The price index for the unregulated
doses, shown by the dashed line, is twice as high as that for the regulated doses at
2.25 in December 2015. The unregulated doses also experienced a much sharper
increase in price in the months before May 2012, indicating that the pharmaceutical
firms looked to compensate the price declines in the regulated markets with price
increases in the unregulated markets. We argue, based on Fig. 7.1, that partial
regulation has been a significant limitation of the 2013 DPCO, undermining its
effectiveness in lowering prices overall. We plot in Figs. 7.2 and 7.3 the price indices
for regulated and unregulated doses of medicines administered in an injection form.
The price index for the unregulated doses, shown in dashed line, increased by more
than 15 times in the months leading up to the implementation of the DPCO, and
eventually declined to about five times the price index for the regulated doses. We
observe a similar pattern for medicines administered as syrups or suspensions. The
increase in prices in both the regulated and unregulated doses happens well before
the regulation is implemented. Consistent with Glazer and McMillan (1992), phar-
maceutical firms increased prices in the unregulated doses as early as in May 2012,
which remained high after the implementation of the regulation. The prices in the
unregulated dosage markets also increased in May 2012, more than a year before the
regulation was to be implemented, and declined on the eve of implementation of
regulation in August 2013. However, the prices of regulated doses increased
subsequently.
injection form
syrup form
Next, we examine the overall impact of the regulation on prices of medicines by

including both regulated and unregulated doses. To examine the overall effect of the
price control regulation on the prices of partially regulated medicines, we average the
separately normalized prices for regulated and unregulated doses and plot them in
Fig. 7.4 Price index averaged across regulated and unregulated doses of medicines in their
tablet form
injection form
Figs. 7.4, 7.5 and 7.6 for tablets, injections, and syrups respectively. The trends show
that the overall price at least doubled during 2011–2015, and in the case of injections
and syrups price more than doubled.
To illustrate the extent to which firms coordinated on prices, Bhaskarabhatla et al.
examine the case study of the Metformin medicine, which is used extensively to treat
syrup form
Fig. 7.7 Price of regulated and unregulated doses of metformin tablets
patients with diabetes mellitus in India. They show that firms coordinated to
selectively increase the prices of SKUs containing the regulated dosage. We build
on their example of Metformin medicine and plot in Fig. 7.7 the average MRP for
500 mg and 650 mg Metformin tablets for a longer time series after the implemen-
tation of the regulation. The figure shows that the average price of 500 mg
Metformin tablets, normalized per 1000 mg, remained identical to the average price
of 100 mg Metformin tablets before the implementation of the regulation at around
three rupees per tablet. The average price of 500 mg SKUs selectively increased
in May 2012 and subsequently declined after August 2013. The average prices of
both doses converged again at 3.5 rupees per tablet after the 2013 DPCO was
implemented. Bhaskarabhatla et al. argued that such a coordinated, temporary
increase was aimed at inflating the prospective ceiling price. The government, likely
aware of such coordinated action, decided to use PTR as the basis for regulation (for
further details see Chap. 4).
While the trends indicate that the consumers as a whole are worse off, if the
most vulnerable segments of the society have enjoyed better access to lower-priced,
regulated medicines, then the 2013 DPCO can be considerable as valuable for some
segments of the consumers. However, there is little evidence based on prescriptions
data that physicians prescribe price-regulated medicine dosages for lower-income
households. Also, as the IMS study (2015) pointed out, the imposition of price
controls may have crowded out producers from the production of regulated doses.
Next, we examine such diversion of production resources.
7.4 Diverting Production from Regulated

to Unregulated SKUs
Armstrong and Sappington (2007, pp. 1637–1639) describe the challenges in

designing regulation when firms operate in both regulated as well as related but
unregulated markets. We continue to examine the Metformin market and plot in
Fig. 7.8 the share of the 500 mg tablet market as a percentage of the total market for
Metformin tablets composed of 500 mg and 1000 mg doses. We find that the share
increased temporarily before the regulation but subsequently declined. Although the
extent of decline in Metformin is not significantly high (it ranges between 65 and
70% based on market share during the 5 year period), the shift in production can
potentially be substantial for other medicines. To examine the trends overall, we
expand the set of medicines to include all those affected by the 2013 DPCO. We plot
in Figs. 7.9, 7.10 and 7.11 the quantity share of regulated doses as a percentage of the
total quantity of the medicine for tablets, injections, and syrups. The patterns indicate
that the quantity of regulated medicines as a share of the total sales of the medicine
did not decline substantially overall. We present the quantity share of regulated
SKUs by medicine in Table 7.1. Although one would expect a decline in prices to
increase the share of sales for the regulated SKUs, overall, there is a decline in sales
in the case of some medicines, albeit by a small percentage. Particularly, top-selling
medicines such as Atorvastatin and Paracetamol have experienced a decline of
more than 5% during 2011–2015. Bhaskarabhatla et al. (2018) examine the case
of Paracetamol in greater detail. They define effort diversion as the redirection of
production resources from regulated to unregulated market segments. They argue
7.4 Diverting Production from Regulated to Unregulated SKUs 167
Fig. 7.8 Share of 500 mg metformin tablets as a percentage of 500 mg and 1000 mg metformin
markets
Fig. 7.9 Quantity share of regulated SKUs among all SKUs of regulated medicines in tablet form
that when the costs of production in the regulated and unregulated markets are
similar—as is the case for different dosages markets of the same medicine—then
even if the costs are not known, information asymmetries on the demand side can
lead to inefficient effort diversion. Using Pharmatrac data on Paracetamol between
Fig. 7.10 Quantity share of regulated SKUs among all SKUs of regulated medicines in
injection form
Fig. 7.11 Quantity share of regulated SKUs among all SKUs of regulated medicines in syrup form
March 2007 and June 2015, they document the nature and extent of effort diversion
from 500 mg to 650 mg tablets. They also find that firms successfully increased the
relative price in the unregulated market and diversified away from the regulated
500 mg segment into the unregulated 650 mg segment, thus limiting the overall
effectiveness of regulation.
Table 7.1 The share of units of regulated SKUs among all SKUs of partially regulated medicines
in tablet form
# Medicine | 4-digit Category Jan 2011 May 2012 August 2013 December 2015
1 Glyceryl Trinitrate | C1E4 3.12 2.44 1.98 1.32
2 Doxycycline | J1A6 66.54 55.32 50.92 5.9
3 Dextromethorphan | R5F3 7.27 8.38 9.61 9.24
4 Efavirenz | J5B6 58.64 41.9 10.22 10.87
5 Lamivudine | J5B1 9.36 12.64 19.37 11.62
6 Chlorambucil | L1A1 56.27 62.65 41.34 22.44
7 Famotidine | A2B2 35.11 36.68 29 27.31
8 Amitriptyline | N6A1 30.87 30.1 30.05 27.96
9 Primaquine | P1D6 27.61 28.64 35.41 32.26
10 Lithium | N6A11 35.78 35.57 34.73 33.53
11 Diclofenac | M1A12 48.58 33.43 35.92 34.95
12 Zidovudine | J5B2 58.92 64.02 67.07 35.75
13 Methyldopa | C2A7 100 100 100 36.34
14 Mesalazine | A7E1 70.04 60.37 46.58 39.28
15 Ritonavir | J5B9 61.26 30.88 14.22 39.79
16 Isosorbide Dinitrate | C1E3 46.54 46.58 43.4 41.02
17 Warfarin | B1X9 56.19 52.3 52.9 41.65
18 Vitamin B1 Plain | A11E13 7.3 32.28 46.44 41.85
19 Tramadol | N2B5 53.12 49.69 57.31 45.31
20 Paracetamol | N2B1 54.44 56.53 50.24 49.47
21 Diltiazem | C8A6 54.45 52.38 53.52 50.51
22 Rifampicin | J4A12 57.88 46.96 54.37 51.73
23 Clindamycin | J1F3 47.44 56.32 47.89 51.74
24 Isosorbide-5-Mononitrate | C1E1 60.34 61.31 56.38 55.5
25 Spironolactone | C3A3 62.95 75.25 57.94 56.53
26 Atenolol | C7A5 53.38 55.06 54.12 57.18
27 Cefalexin | J1D1 45.59 48.19 56.4 57.7
28 Diethylcarbamazine | P1E2 31.51 45.75 42.54 58.83
29 Sulfasalazine | A7E3 66.7 65.49 62.85 60.57
30 Aspirin | B1C1 56.37 57.09 61.31 61.05
31 Fluoxetine | N6A8 69.81 72.8 69.43 62.88
32 Atorvastatin | C10A1 73.6 69.97 67.47 63.4
33 Propranolol | C7A37 78.18 74.08 72.3 63.88
34 Aciclovir | J5A4 69.64 66.43 66.27 64.14
35 Olanzapine | N5A5 67.11 65.07 64.57 64.76
36 Nitrofurantoin | G4A3 68.35 70.6 66.91 66.47
37 Bromocriptine | N4A2 78.13 62.47 53.47 67.54
38 Metformin | A10B6 68.2 69.74 68.64 67.59
39 Amoxycillin | J1C1 63.62 65.36 61.08 69.17
40 Ibuprofen | M1A30 72.64 81.95 75.84 73.57
41 Clomifene | G3G2 70.64 79.11 72.73 73.68
42 Carbamazepine | N3A1 79.7 78.86 76.71 74.26
(continued)

43 Danazol | G3B3 47.54 70.36 74.85 75.44
44 Cyclophosphamide | L1A3 60.86 68.76 77.9 76.76
45 Verapamil | C8A23 82.44 81.82 77.64 77.46
46 Chlorpheniramine | R6A4 98.18 96.58 94.9 77.84
47 Metoclopramide | A3F19 92.6 93.21 82.3 78.83
48 Imatinib Mesylate | L1X16 80.97 76.05 81.48 79.05
49 Ethambutol | J4A3 84.27 83.67 83.72 79.88
50 Diazepam | N5D9 82.76 80.79 78.63 81.52
51 Cyclosporin | L4A4 99.1 93.28 90.98 82.72
52 Metoprolol | C7A29 83.37 83.77 83.71 82.87
53 Domperidone | A3F7 82.98 83.39 82.69 83.66
54 Phenytoin | N3A12 88.33 84.85 84.83 84.14
55 Dapsone | J4B3 96.94 97.4 94.44 84.46
56 Methotrexate | L1B1 97.75 93.36 92.57 86.26
57 Hydroxychloroquine | P1D2 93.08 91.36 89.1 86.74
58 Allopurinol | M4A4 90.5 91.12 88.69 87.48
59 Quinine | P1D8 76.13 83.19 83.67 87.64
60 Sodium Valproate | N3A14 89.86 88.28 88.28 88.84
61 Ofloxacin | J1G9 87.42 87.05 88.76 89.39
62 Terbutaline | R5D3 33.21 16.9 43.27 90.67
63 Acetazolamide Systemic | S1D2 88.48 92.67 90.64 91.11
64 Enalapril | C9A6 91.55 92.02 93.46 91.85
65 Cefixime | J1D26 88.29 88.42 91.14 91.88
66 Carbimazole | H3B1 90.69 91.12 92.42 91.91
67 Norethisterone | G3A12 99.06 99.26 99.6 92.86
68 Erythromycin | J1F4 88.76 93.01 93.23 93.41
69 Fluconazole | J2A4 98.2 96.26 95.83 93.63
70 Omeprazole | A2C1 89.37 88.33 91.42 94.31
71 Ampicillin | J1C7 89.36 91.3 94.28 94.33
72 Nifedipine | C8A16 94.95 95.4 95 95.08
73 Ethinylestradiol | G3A18 90.84 94.39 95.35 95.5
74 Dexamethasone | H2A5 90.11 92.78 88.73 95.65
75 Alprazolam | N5D1 94.17 95.24 96.16 95.96
76 Imipramine | N6A10 93.73 95.48 94.96 96.15
77 Pyridostigmine | N7C11 96.63 96.65 96.98 96.45
79 Cetirizine | R6A3 93.48 94.41 96.55 96.47
78 Amlodipine | C8A1 94.75 95.01 95.09 96.47
80 Testosterone | G3B2 97.08 98.5 98.66 97.33
81 Medroxyprogesterone | G3A19 98.74 98.96 99 97.58
82 Clopidogrel | B1C5 97.68 97.57 97.42 97.66
83 Tamoxifen | L2B1 100 100 92.45 97.71
84 Ciprofloxacin | J1G1 96.89 97.31 97.91 98.12
85 Salbutamol | R3A11 95.27 87.79 96.97 98.24
(continued)

86 Bisacodyl | A6B5 97.2 96.82 98.94 98.3
87 Prednisolone | H2A6 98.96 98.77 98.49 98.4
88 Azathioprine | L4A3 98.67 98.79 98.6 98.63
89 Ondansetron | A4A2 98.1 97.81 97.83 98.66
90 Hyoscine | A3A32 99.98 100 100 98.77
91 Griseofulvin | J2A8 84.53 90.49 99.84 98.84
92 Pyrazinamide | J4A10 97.81 97.89 97.61 98.86
93 Glibenclamide | A10B1 98.57 98.86 98.57 98.87
94 Azithromycin | J1F1 99.55 99.58 98.88 98.92
95 Folic Acid | B3A4 99.68 99.27 98.47 98.96
96 Plain Vitamin C | A11X31 98.83 99.4 96.82 99.49
97 Leflunomide | M5C1 98.24 99.79 99.14 99.62
98 Chlorpromazine | N5B2 99.45 97.87 99.51 99.65
99 Trihexyphenidyl | N4A10 99.69 99.72 99.6 99.68
100 Losartan | C9D3 99.67 99.64 99.64 99.7
101 Metylergometrine | G2A3 99.86 99.9 99.79 99.89
102 Mifepristone | G3X2 97.99 80.93 100 99.9
104 Albendazole | P1B1 99.01 99.2 99.94 99.95
103 Hydrochlorothiazide | C3C8 99.9 99.93 99.96 99.95
128 Phenobarbitone | N3A10 99.77 100 100 100
123 Flutamide | L2B5 100 100 100 100
118 Amiodarone | C1B3 100 100 100 100
107 Mefloquine | P1D18 100 100 100 100
106 Fluconazole | D1A17 100 100 100 100
105 Metronidazole | A7A1 100 100 100 100
116 Cloxacillin | J1C23 98.48 96.04 100 100
115 Indinavir | J5B8 100 100 100 100
125 Neostigmine | N7C10 100 100 100 100
114 Isoniazide | J4A6 100 100 100 100
119 Mercaptopurine | L1B8 100 100 100 100
112 Promethazine | A4B1 100 99.83 99.84 100
126 Ciprofloxacin | S3A2 100 100 100 100
121 Clofazimine | J4B2 100 100 100 100
120 Digoxin | C1A1 100 100 100 100
127 Pyrimethamine | P1D3 100 100 100 100
122 Raloxifene | G3 J2 100 100 100 100
109 Penicillamine | M1C5 100 100 100 100
110 Didanosine | J5B4 95.57 94.12 93 100
108 Stavudine | J5B3 100 100 100 100
117 Diloxanide | P1A4 100 100 100 100
111 Melphalan | L1A5 100 100 100 100
113 Colchicine | M4A2 100 100 100 100
124 Procarbazine | L1X19 38.08 100 41.93 100
7.5 Introduction of Product Varieties of Regulated

and Unregulated SKUs
7.5.1 Exemptions for New Products Under the 2013 DPCO
Pharmaceutical firms can, in theory, introduce new product varieties of the same
medicine to attempt to mitigate the impact of the 2013 DPCO. For example, the
pharmaceutical firms can over-invest in innovation in the unregulated market seg-
ments of a medicine, thus softening price-competition and generating greater
demand in those segments. As discussed in Chap. 3, using the same active ingredi-
ent(s), companies can develop several product varieties with little to no cost. For
example, Cipla sells three different brands of 400 mg Alebndazole tablets, Bendex,
Tiobend, and X Worm. Similarly, Klar Sehen sells the same brand of 400 mg
Albendazole tablets, but in three different package sizes, containing one, two, or
20 tablets. It is rational for pharmaceutical companies to develop and sell SKUs that
cater to different segments of the population conveniently. Also, launching new
product varieties under different brand names or package sizes can lower the risk of
failure by allowing the firm to learn and discover the brands and package sizes that
succeed in the market. From a consumer’s point of view, having many distinct
brands and variety should also, in theory, increase welfare by providing them with
the product characteristics they prefer. For regulators, however, dealing with product
varieties remains a challenging issue, as the regulation should exempt newer varie-
ties that are not merely packaging and marketing innovations, but enhance the
efficacy of a drug. A regulation that is too strict can potentially hinder incremental
innovations. To that effect, the NPPA decided to create a subsection in the DCPO
regulation (section 32):
Non–application of the provisions of this order in certain cases:
i. A manufacturer producing a new drug patented under the Indian Patent Act,
1970 (39 of 1970) (product patent) and not produced elsewhere, if developed
through indigenous Research and Development, for five years from the date of
commencement of its commercial production in the country.
ii. A manufacturer producing a new drug in the country by a new process developed
by indigenous Research and Development and patented under the Indian Patent
Act, 1970 (39 of 1970) (process patent) for five years from the date of the
commencement of its commercial production in the country.
iii. A manufacturer producing a new drug involving a new delivery system devel-
oped through indigenous Research and Development for a period of five years
from the date of its market approval in India: Provided that the provision of this
paragraph shall apply only when a document showing approval of such new
drugs from Drugs Controller General (India) is produced before the Government.
In other words, the NPPA allowed for a 5-year exemption for any new drug or
novel delivery system. This exemption is a way for the NPPA to promote research
and development in the newly regulated market, as innovators could still finance
7.5 Introduction of Product Varieties of Regulated and Unregulated SKUs 173
their research by increasing their price and gain from their newly acquired compet-
itive advantage. But despite its advantages, this system also has an important
drawback, namely that it can create an important loophole in the ceiling price
mechanism. As Abbott (1995) notes,
The critical question is how to define the product for purposes of the price cap. Is a bottle of
50 400 mg tablets the same product as a bottle of 25 800 mg tablets? What if additional
active ingredients are added to one but not the other? Or, what if one product is in solid form
and the other in liquid? Clearly, there are many ways in which the same basic active
ingredient could be incorporated into a “new product,” and the pharmaceutical industry is
noted for its ingenuity in developing alternative presentations. Introducing one and phasing
out the other might enable the pharmaceutical firm to avoid the price cap and could be very
difficult to detect -- was the product changed in order to get around the price cap or is the
“new” product really better for consumers?
Regulators must be able to answer such questions case by case and weigh the
advantages and disadvantages each time. Is the innovation substantial? What are the
advantages for the Indian population? Is it worth the price? Regulating and assessing
the quality of an innovation is extremely hard, especially in a market where the
stakes are this high. The NPPA thus has to weigh each decision assessing the
public’s interest while keeping an eye on the pharmaceutical companies’ interest,
which is a challenging trade-off to balance.
Historically, however, pharmaceutical firms have introduced new product varie-
ties of existing medicines to avoid price controls. For example, Pfizer changed the
composition of its cough syrup, Corex to dodge the 1995 drug price controls
(Ghangurde 1998). Similarly, Burroughs Wellcome, a subsidiary of Glaxo, replaced
pseudo-ephidrine with phenyl propalomina in its brand of anti-cold medicine brand,
Actifed (Ghangurde 1998). Gulhati (2004) elaborated on the economics behind the
choice:
Actifed, a cough and cold remedy of Glaxo is an international brand. All over the world it
contains pseudoephedrine while in India it contains phenylpropanolamine. Last year PPA
was found to be causing strokes. Coldarin [Johnson & Johnson] issued front page ads to
inform readers that its product was free from PPA. Yet recently they themselves have
changed their own formula by using the discredited, dangerous PPA. Why? Because PPA
is cheaper while psuedoephedrine is not only expensive but under price control. Since both
are decongestants, they should be subjected to similar price controls or remain out of price
control.
7.5.2 Pharmaceutical Firms’ Reaction to the DCPO

Legislation
Next, we examine how pharmaceutical firms responded to the DPCO by introducing

new product varieties. First, pharmaceutical firms applied for exemptions from the
2013 DPCO by changing the route of administration. As noted in Chap. 5, the case
of Crocin Advance is one of the significant cases of unsuccessful attempts to gain
exemption from the 2013 DCPO. Crocin is a brand of Paracetamol produced by
GlaxoSmithKline, and it is widely used in India. The 2013 DPCO regulated the
500 mg Crocin tablets. In response, GSK decided to launch a new product called
Crocin Advance, which contained the same dosage of Paracetamol but had a new
and innovative delivery system discovered through research and development to be
exempted from the price cap. GSK thus decided to launch Crocin Advance at
Rs. 30 for a 15 tablet and discontinue the old Crocin that was priced at Rs. 12.70
(Nautiyal 2014). According to GSK, Crocin Advance has substantial benefit com-
pared to the regular slow release version, as “Crocin Advance is India’s first
paracetamol tablet with Optizorb technology. It starts releasing its medicine in as
little as 5 min. It gets absorbed 25% faster than standard paracetamol.”1 In other
words, GSK justified a 130% increase in price because patients would be able to feel
the effect of Paracetamol approximately 1 min and 30 sec earlier. GSK hoped that
the NPPA would agree to keep Crocin Advance out of the ambit of 2013 DPCO for
5 years to cover GSK’s research and development expenses, as specified under
paragraph III of section 32. The NPPA did not agree with GSK’s arguments because
they considered that Paracetamol was not a new drug. A special technical committee
of the NPPA ruled that a different way of manufacturing a new drug or a faster
delivery system does qualify as an innovation for the NPPA. The section of DCPO
2013 thus did not apply to this case. An injunction on the sale of Crocin Advance
was then released, and GSK had to recall the entire stock of Crocin Advance, and
relabel it to comply with the ceiling price. By March 2017, GSK paid Rs. 53.99
crores to the NPPA as reimbursement for overcharging the consumers and violating
the 2013 DPCO. Depending on the importance of the innovation on the delivery
system, the NPPA has however allowed for exemptions. Drugs with innovative
delivery systems can be sold at a higher price by setting a different ceiling price for
these. For example, “Glycerol Trinitrate” has a different price ceiling for its
sustained release tablet or capsule (Shankar 2014a). But overall, the Department of
Pharmaceutical stated that “no drug can fall out of price control merely because it
involves a New Drug Delivery System. Hence, merely because a capsule is conven-
tional or non-conventional does not make it cease to be capsule” (Shankar 2017).
Second, pharmaceutical firms tweaked the dosages of their brands to mitigate the
impact of the DPCO. For example, GSK argued that its Crocin suspension was
not subject to 2013 DCPO as 120 mg/ml was not mentioned in the 2011 edition of
the National List of Essential Medicines. GSK continued to sell the medicine at
Rs. 37.77, even though the NPPA fixed the price of Crocin suspension at Rs.19.20.
The 2011 National List of Essential Medicine includes 125 mg/ml but not 120 mg/
ml. By exploiting this loophole, GSK tried to push other medicines of the Crocin
brand like Crocin drops. According to the Maharashtra Food and Drug Administra-
tion, other Crocin products like Crocin drops were available at Rs.32 even though
the ceiling price was set at Rs. 4.80 (Nautiyal 2014). All these maneuvers were met
with skepticism by the Maharashtra Food and Drug Administration, and the NPPA
decided to rule against GSK, which had to reimburse the overcharged amount. The
practice of tweaking dosages was widespread before the implementation of DCPO
1
http://www.crocin.com/products/crocin-advance.html
7.6 Evidence of Temporary Increases in Product Margins 175
2013, and the Department of Pharmaceutical has demanded to the NPPA “to
vigorously pursue the issue with the Ministry of Health to its logical conclusion”
(Alexander 2013).
Third, pharmaceutical firms have developed combinations to avoid price controls.
This manipulation can have two different goals. First, adding an active ingredient in
a drug creates a gray area where regulators have to decide whether or not it is subject
to DCPO 2013. For example, a company can add caffeine to paracetamol arguing it
is not the same medication anymore, or that the added product brings an improve-
ment worthy of an exemption to the price ceiling. An analysis of the petitions
submitted to the Department of Pharmaceutical gives us a good overview of how
companies try to circumvent the regulation. Medications are composed of two
things: the active ingredient, like paracetamol, the molecule that is supposed to
“solve the problem,” and the excipient, the vehicle of the active ingredient. Cipla
tried to persuade the NPPA to consider their medication differently by arguing that
excipients are also active ingredients. The review was finally rejected by the DoP
“the ground that DPCO does not distinguish between prices based on different
excipients” (Alexander 2014). Finally, adding other components to the drug such
as vitamins can also create an opportunity to change the legal classification of the
product. The practice has been used by the Indian pharmaceutical firms for a long
time and was even present before the implementation of DCPO 2013. Indeed, adding
nutritional supplements can make active substances to be considered as a dietary
supplement under the Prevention of Food Adulteration Act of 1954 which is not
under the responsibility of the NPPA and not subject to the DCPO 2013 price ceiling
(Alexander 2013). Overall, since the Crocin Advance scandal, both the NPPA and
the pharmaceutical companies have been more careful in their product introductions.
Any variant of a drug has to be first submitted to the NPPA, which decides if the
medication should be subject to the DCPO 2013 or not (Nagappa et al. 2015). As
PharmaBiz.com (2017) notes:
Some pharmaceutical companies have launched formulations by altering a scheduled for-
mulation, with strength other than as specified in DPCO 2013 and/or in combination with
other non-scheduled medicines without even applying for price approval from NPPA as
required.
We described how pharmaceutical firms attempted to use new product varieties to

circumvent the 2013 DPCO by relying on publicly reported cases. However, it is
likely that we missed several other strategies firms employed to avoid regulation.
7.6 Evidence of Temporary Increases in Product Margins

7.6.1 Introduction
Price controls and trade margins are twin issues that must be addressed together.
However, the 2013 DPCO remains silent on the issue of trade margins. Although the
ceiling prices were initially designed to be based on MRP in 2005, when the DPCO
2013 was publicly notified, the government based it on PTR and allowed for a 16%
margin for retailers (see for more details, Chap. 4). The move led to a considerable
disagreement between pharmaceutical firms and the AIOCD, the union of pharma-
ceutical traders in India. According to Vijay pharmacies in Karnataka refused to
stock medicines that newly entered price control regulation because the trade
margins on such medicines became lower:
The only way to come out of this situation would be to see that manufacturers comprehend
our situation and call to restore the margins as this is only going to hamper not just our sales
but revenues of the pharma companies too following the reluctance to sell these drugs by
pharmacy outlets.
Our subsequent analysis focuses on trade margins on pharmaceutical firms and

how they evolved historically and changed in response to the imposition of price
controls. As noted in Chap. 3, trade margins account for a significant share of the
prices consumers pay. Moreover, margins provide incentives along the vertical
value chain that contradict cost-efficiencies for consumers, since absolute returns
from margins are higher for products that are sold at higher prices and margins. As
we discussed in Chap. 5, such incentives increase the sales of more expensive
drugs, adversely affecting the affordability of medicines. Although the problem
relates to products sold across several industries in India in general, it is more
pronounced in the pharmaceutical industry, because of the relationships between
pharmacists, physicians and pharmaceutical firms in generating demand for pre-
scriptions. Trade margins also play an important role in undermining the overall
competitiveness of the regulated markets. For example, in the presence of price
controls, physicians and pharmacists have an incentive to promote the medicines
with prices closer to the ceiling price, as those medicines likely involve greater
margins. Accordingly, trade margins have been a long-deliberated issue in the
Indian pharmaceutical industry.
7.6.2 The Role of All India Organization of Chemists

and Druggists
Pharmacies in India played a significant role in increasing trade margins on

medicines. The pharmacies are represented by the trade association, All India
Organization of Chemists and Druggists (AIOCD). The AIOCD fought for higher
trade margins following the 1979 DPCO. The AIOCD argued that the government
allocated generous profit margins on regulated medicines for pharmaceutical man-
ufacturers, but considerably lower margins for retailers. Indeed, the 1979 DPCO
provided margins as high as 100% on some regulated medicines and even higher
margins for unregulated medicines. The AIOCD organized boycotts of pharma-
ceutical firms to coerce them into increasing trade margins. Singh (1984) notes:
The drug industry finally buckled last year, and representative associations of the manufac-
turers agreed to allow an 8 per cent wholesale margin and 18 per cent retail margin on all
drugs classified under the Government’s non-essential category IV.
Monopolies and Restrictive Trade Practices Commission (MRTPC) judged

AIOCD’s use of boycotts to extract higher trade margins illegal, but their use
continued unabated (Dubashi 1985). The AIOCD agreed with the trade associa-
tions of pharmaceutical manufacturers IDMA and OPPI, which fixed the trade
margins for unregulated medicines at 30% and for the regulated medicines at 24%.
Whenever medicines enter or exit the DPCO, the AIOCD and pharmaceutical
firms renegotiate the trade margins, leading to a period of threats of boycotts. The
case of the 2013 DPCO was no different. The 2013 DPCO did not resolve the
long-standing dispute between the pharmaceutical firms and the retail trade
associations. The IDMA and AIOCD continued to lobby for higher margins for
their membership respectively (Shankar 2014b). Bhaskarabhatla et al. document
evidence that the AIOCD boycotted firms such as GSK that refused to increase
margins on their best-selling medicines (e.g., Augmentin) entering the 2013
DPCO. Following the boycotts, several firms pledged not to lower margins on
newly regulated medicines from 30 to 24%. We will examine how the margins
changed during this period of bargaining momentarily.
In 2015, the AIOCD criticized that the 2013 DPCO neglects the important role
of wholesalers in the pharmacy trade chain (Vijay 2015a). The criticism focuses
on two aspects: first, the AIOCD general secretary, Suresh Gupta, criticized that
the DPCO capped the retail margins at 16%, despite the recommendation to use
20% as a benchmark for the retail margin; second, Gupta criticized that the DPCO
did not mention any wholesaler margin. In line with this criticism, the president of
the AIOCD Shinde declared his organization’s disagreement with the cap on
margins as regulated in the DPCO 2013 and announced that the AIOCD would
accept “nothing less” than margins of 20% to retailers and 10% to wholesalers and
“strongly oppose” any related action by the government (Vijay 2015b). Similar to
the criticism by Gupta, Shinde complained that the DPCO regulation did not
mention wholesaler margins. The IDMA also formulated a harsh criticism of the
DPCO-regulation, urging the government “not to initiate the capping of trade
margin on generic drugs as this would force the retailers to close their business
resulting in non-availability of medicines in rural areas” (Rana 2015).
In response to reports of excessive trade margins on pharmaceuticals, on behalf
of the Prime Minister’s office (PMO), a committee was formed to prevent the
“unethical practice of pharmaceutical companies”. In particular, the PMO criticized
that margins for essential drugs were “running up to 4000%,” clearly violating the
DPCO 2013. The committee was headed by Sudhansh Pant, joint secretary in the
Department of Pharmaceuticals. Moreover, the committee was joined by represen-
tatives from the NPPA, the Competition Commission of India and participants from
the industry.
7.6.3 Report by the Committee on High Trade Margins
In the Indian pharmaceutical industry, trade margins were first capped as part of the
1970 DPCO. Interestingly, regulations on trade margins were significantly stricter at
that time compared to the most recent DPCO in 2013. For instance, under the 1970
and 1979 DPCOs, the trade margin for wholesalers is fixed at 2%, and for retailers,
the margin varied from 10 to 12% based on whether the medicine was ethical or
non-ethical category. The retailer margin was fixed at 16% under the 1987 and 1995
DPCOs, but the ceiling price was computed based on manufacturing costs rather
than market-based prices. By contrast, the DPCO 2013 includes a notional retail
margin of 16%, which applies only to price-controlled drugs. The stipulated margin
is considered notional because, as we will elaborate momentarily, there is nothing
preventing firms from providing margins greater than 16%. It is useful to recall that
the DPCO 1970 originally introduced “a combined trade margin for all intermediary
levels between manufacturer and retailer including retailer” (Pant et al. 2016).
However, an amendment introduced on 11th January 1971 separately fixed the
trade margins for wholesalers and retailers. Pant et al. (2016) note:
Initially, wholesaler and retailer margin was fixed but subsequently Government tried to lift
control on upstream margins and wholesaler margin was not specified in the later DPCOs.
Under DPCO, 2013 except for adding margin to price to retailer while fixing ceiling/retail
prices, DPCO, 2013 does not specify any other trade margins to be paid by the manufacturer
or trader.
Moreover, the Pant report acknowledges that the discussion on trade margins
has become a heated issue related to the 2013 DPCO due to the large number of
complaints the NPPA received identifying the cases of exorbitant margins. In
particular, the NPPA received several complaints through its Centralized Public
Grievance Redress and Monitoring System and through the Ministry of Chemicals
and Fertilizers, which indicated that the trade margins were 300–5000% (Pant et al.
2016, p. 13). The report notes that there is a considerable difference between “the
sale price of the company to the distributor/wholesaler and the MRP printed on it.”
Such discrepancy between prices throughout the value chain critically affects the
equilibrating process in the market. The Pant report mentions the case of M/s
Ranbaxy Laboratories Ltd. v/s State of Haryana, in which the drug is sold to dealers
at Rs. 2, but the MRP printed on the strip is Rs. 26. The report cites the judgment of
the Punjab and Haryana High Court (Pant et al. 2016):
Before parting with the judgement, it has to be noticed that although the petitioner is
allegedly selling the drug in question to the consumer at about 900% of the reasonable
price of the drug, but there appears to be no legal provision in force to save the consumers
from such naked fleecing of the consumers by the petitioner or other drug manufacturers by
over-pricing the drug to such an extent. It is surprising that no remedial or ameliorating step
has been taken either by State or by the Union of India in this regard. The court hopes that
now at least the concerned authorities shall wake up and shall take some remedial step to
save the consumers from such fleecing.
Although India tried to cap trade margins of unregulated medicines in 2000, its
law ministry at the time opined that doing so can potentially be challenged under
article 14 of the Indian constitution guaranteeing the right to equality. However, in

2007, the ministry modified its opinion and stated that controlling unfair trade
margins by putting a ceiling is in consonance with article 14. The Sandhu Committee
also opined on the matter in 2004, suggesting a trade margin of 8–10% for whole-
salers and 16–20% for retailers on branded generics and 15 and 35% for generic
medicines.
In its meetings with the NPPA in July 2015, the industry representatives argued
that high trade margins facilitate the distribution and sale medicines in remote areas,
thus increasing the availability of medicines in India. The NPPA, however, argued
for debranding plain generics containing only one ingredient on the basis that the
Drug Controller General of India (DCGI) issues licenses in generic names. Also, the
NPPA suggested that paragraph 7(2) of the 2013 DPCO should be amended, which
would restrict the notional margin of 16% to the actual trade margin that can be
enforced by the law. The Competition Commission of India surprisingly stated that
capping trade margins is considered anti-competitive, unless there is a “strong
justification on the grounds of public policy” (Pant et al. 2016).
In consultation meetings with several stakeholders and lobbyists from the indus-
try as well as trade associations in 2015, traders pointed out that they agree on
capping trade margins and that by doing so the availability of drugs will not be
affected. However, traders also underlined their demand to raise the cap on margins.
Moreover, traders required distinguishing generic-generic medicines from others
allowing for higher margins in that segment. Concerning generic medicines, traders
argued that higher margins were necessary for generic drugs as “marketing expenses
are passed on to the retailers” and “no return from retail on account of expiry and
breakage is accepted” (Pant et al. 2016).
In general, the analysis of the committee concluded that “instead of controlling
MRP, the Government should only cap the trade margins” (Pant et al. 2016).
Moreover, the report recommended capping the overall trade margin which would
leave companies the freedom to adjust margins for different trade channels. In
contrast to the DPCO 2013 regulation, the committee suggested: “that the cap on
trade margin should be calculated backward with reference to the retail price (MRP)”
(Pant et al. 2016). Furthermore, the committee pointed out that “[h]igh Trade
margins are not specific to a particular type of drug. It is generally prevalent in
non-scheduled drugs due to historical reasons, but abnormally high margins have
also been observed in scheduled drugs” (Pant et al. 2016). Moreover, the report
concluded that capping trade margins does not conflict with existing legislations and,
in particular, does not violate the Competition Act, 2002.
After long deliberations, the committee came up with the proposal of a gradual
system to cap the margins. The committee opined that capping the trade margin on
lower-priced medicines will push traders to shift to higher-priced medicines. To
mitigate such effects, they suggested to cap margins of medicines with an MRP of Rs
50 and above at 35%, while margins of medicines with an MRP between 20 and
50 were suggested at 40%. For medicines with an MRP between Rs 2 and Rs 20, the
trade margin is suggested to be capped at 50%. Further, the committee recommended
avoiding capping margins of medicines below Rs 2. Finally, the committee proposed
to cap trade margins of “all drugs including generics, branded, scheduled, and
non-scheduled drugs”. The Pant Committee made additional, but related recommen-
dations, which we list below (Pant et al. 2016, p. 33–34):
• Recommended a cap on the trade margins, including medical devices such as
stents and orthopedic implants
• Recommended capping trade margins concerning price to the trader rather than
maximum retail price.
• Recommended an amendment to Form V submitted by manufacturers to the
NPPA under the 2013 DPCO to include price to the trade so that it can be
monitored.
• Recommended adjusting the trade margins appropriately when manufacturers
offer promotional offers.
• Recommended amending paragraph 7(2) of the 2013 DPCO as stated below: “No
manufacturer shall sell a drug to the Trade, unless otherwise permitted under the
provisions of this order or any order made thereunder, the MRP of which exceeds
the margins notified by the Government from time to time with reference to the
price to trade.”
The Pant Committee also clarified that the practice of providing high trade
margins is unethical, defined as not consistent with the rules or standards for right
conduct or practice especially the standards of a profession. Also, the NPPA clarified
that the consumers of generic medicines are often adversely affected due to higher
prices compared to branded generic equivalents. As an example, the Committee
noted that Alken sold the generic version of 50 mg Nandrolone injection at an MRP
of Rs. 185. However, PCI Pharma sold the same medicine under the brand name
Decapic at an MRP of Rs. 14.25 and Jaksonpal Pharma sold the medicine under the
brand name of Metadec at an MRP of Rs. 260. Similarly, the generic version of a
pack of ten 20 mg Piroxicam tablets is sold by Alkem at an MRP of Rs. 43. By
contrast, Indswift sold the same medicine at an MRP of Rs. 3.75 for ten tablets under
the brand name Doloswift and Akumentis sold at Rs. 85 under the brand name
Pirover.
The Pant Committee also refuted the claim that capping trade margins is inher-
ently anticompetitive. The committee noted that capping trade margins will neither
create entry barriers nor push existing manufacturers out of the market. The com-
mittee argued that placing an upper limit on the trade margin allows pharmaceutical
firms the freedom to choose their margins, but protects consumers against exorbitant
margins. Therefore, the committee argued that capping trade margins are not in
violation of the Competition Act of 2002.
7.6.4 Representations to the Pant Committee

and Deliberations After the Committee’s
Recommendations
The pharmaceutical firms and their industry associations provided a coordinated

opposition to the idea of limiting trade margins. The extent of coordination is visible
in their representations to the Pant Committee. For example, the three pharmaceu-
tical manufacturers, Alken Laboratories, Micro Labs, and Cipla, submitted letters to
the Pant Committee. A cursory examination of the letters reveals that the letters are
substantively identical, each containing the same 11 points. We document the
responses by the IDMA, the IPA, pharmaceutical firms, AICDF, and the Competi-
tion Commission of India in Table 7.2. In general, the industry associations and their
members argued that capping trade margins would compel them to legally challenge
the NPPA. In a letter to the DoP, the Indian Drug Manufacturers Association stated:
“that any move to cap trade margins would seriously impact micro, small and
medium scale drug companies engaged in manufacturing such medicines”. The
IDMA’s criticism (or a veiled threat) went as far as to argue that medicines in rural
areas may become partly unavailable as a consequence. Although the committee’s
recommendations on trade margins were far more generous compared to the initial
regulations of the DPCO 2013, different industry and trade bodies proceeded to
oppose their implementation. Once more, in their criticism, they argued with the
availability of drugs in rural areas and the affordability for small manufacturers.
Only a few days later, in another statement the AIOCD threatened the government
again, warning that any reduction of the trade margins below the requested level of
10% to retailers and 20% to retailers would come at the cost that “the supply of
medicines to the patients will be severely affected” (Rana 2016). The continued
opposition by the AIOCD and the IDMA drew criticism from industry observers
(Francis 2016):
Such a stand and threats issued by the associations representing pharma industry and trade
on the availability of medicines in the event of capping margins are not fair. Retail margins
of 1000 per cent and more on any product are unethical and when it is on a lifesaving product
it is totally unjustified. Therefore, DoP has to come out with the notification capping margins
without any further delay.
Two months after the announcement of the recommendations by the committee,

the AIOCD again pushed their claims, now demanding to increase the cap on trade
margins to 50%, including a retailer margin of 35% as well as a wholesaler margin of
15%, valid for “all generics, scheduled and non-scheduled drugs, ethical, non-ethical
medicines, surgical equipment viz. stents, orthopedic implants” (Yadav 2016). With
respect to the introduction of margin caps, Kaustav Ganguli, Healthcare Lead and
Senior Director at Alvarez & Marsal argued that “there has to be a mechanism to
ensure that the impact of lower prices is borne in a fair manner by all stakeholders
across the value chain covering hospitals and distributors instead of only by manu-
facturers” (Vijay 2016). The controversy persisted in 2017, as the AIOCD opposed
Table 7.2 Stakeholder responses to the proposal to limit trade margins on the sale of medicines
Stakeholders Response to the proposal to cap trade margin in the sale of medicines
Indian Drug Manufac- Capping trade margins will disrupt sales in rural areas and adversely
turers Association affect small and medium-sized pharmaceutical firms
Organization of Trade margins are a matter between the manufacturer and the trade. So
Pharmaceutical long as the availability of drugs at mandated ceiling price is
Producers of India maintained, there is no reason for additional regulatory guidance
Capping trade margins will adversely affect the availability of medi-
cines in remote villages.
Fixing and maintaining a “Stokist Price” (that is, price to the trader)
could be deemed anti-competitive as the manufacturer should be free
to sell the product at any price as negotiated between manufacturers
and stockists as long as the same conforms with the DPCO.
Amending Form V to include price to the trader is burdensome as the
IPDMS website is not user-friendly.
Indian Pharmaceutical Trade margins are not regulated for any commodity or product,
Alliance however essential.
Regulating trade margin can violate competition laws and adversely
affect competition.
Regulated trade margin will compromise access to medicines in
remote areas.
Capping the trade margin will embolden the traders to seek the
minimum stipulated amount and settle for nothing less.
Confederation of Indian Manufacturers are compelled to give margins higher than 16% because
Pharmaceutical otherwise, retailer’s associations boycott their products
Industry
Alkem, Cipla, and Capping trade margins will be in violation Article 14 of the Indian
Micro Labs constitution.
Capping trade margins will lead to severe shortages.
The trade margins are not capped in any other country.
Prices of price-controlled and non-controlled medicines are already
among the cheapest in India as compared to other developing countries
and the increase in prices have always been below or at par with
inflation.
Capping trade margins will not lower MRP. Instead, the MRPs will
rise because the PTR will rise. As a result, the ceiling prices, currently
calculated by PTR, will rise.
The calculation of mark-ups is incorrect.
Higher trade margins allow for distribution to rural areas
All India Chemists & Support capping trade margins
Distributors Federation Argued for strengthening rules around disclosing PTR through
Form V, which would not allow manufacturers to hide actual trade
margins and restrict the practice of allowing extraordinary discount or
margin or incentive or bonus to any dealer
Capping
Competition Commis- Generally, any kind of fixation of trade margin and the price is
sion of India considered anti-competitive, unless there is strong justification on the
grounds of public policy.
(continued)

Stakeholders Response to the proposal to cap trade margin in the sale of medicines
National Pharmaceuti- Supported limiting trade margins by amending the 2013 DPCO to
cal Pricing Authority include paragraph 7(2): “No manufacturer is allowed to give margin to
retailer exceeding the margin specified in sub para (1) of this
paragraph”
Source: Pant et al. (2016).
the government’s evolving policy on online pharmacies and proposed changes to the
DPCO. The AIOCD general secretary noted (Yadav 2017a):
At present wholesalers get 10 per cent margin on non-scheduled drugs and 8 per cent margin
on scheduled drugs from drug manufacturers. On the other hand, retailers receive 20 per cent
margin on non-scheduled drugs and 16 per cent margin on scheduled drugs from drug
manufacturers. Given the existing margin cap, it’s impossible for chemists to offer 25-30 per
cent discount to customers. We have appealed to the government to prevent e-pharmacies
from offering heavy discount or remove existing margin cap for wholesalers, retailers,
he said.
Recently, the AIOCD demanded changes in the DPCO 2013 (Yadav 2017b),
their criticism addressed the calculation of the price ceiling for scheduled formula-
tions. The AIOCD proposed the following formula (Yadav 2017b):
1) retail price (RP) minus percentage (DPCO 1995 formula) then the retailers margin is equal
to RP minus 20 per cent; 2) if the margin is to be calculated on PTS then the formula should
be as follows: Price to stockiest (PTS) plus 39 per cent as to maintain 20% margin to retailer
and 10 per cent margin to distributor.
As can be concluded from these intense deliberations, the definition of maximum

margins is a controversial topic in the Indian pharmaceutical industry. In the
following subsection, we use Pharmatrac data to descriptively analyze the size of
trade margins as well as highlight how trade margins changed in the period sur-
rounding the implementation of the 2013 DPCO.
7.6.5 Analysis of Trade Margins Using the Pharmatrac Data
Using Pharmatrac data, we examine the extent of trade margins before and after the
2013 DPCO. The pharmaceutical industry claims that the high trade margins are
prevalent among generics. However, our analysis of price-controlled medicines,
most of which are branded, out-of-patent medicines, indicates relatively high trade
margins. We limit the analysis to all SKUs that entered price cap regulation in
2013. We plot in Fig. 7.12, the percentage of trade margins, calculated as 100*
(MRP-PTR)/PTR. The trade margin increased from an average of 29% in January
2011 to 33% in March 2012. However, the average trade margin increased suddenly
in the next month to 73% and reached a high of 105% in January 2013. The margin
decreased briefly after the 2013 DPCO was implemented but soon increased to a
high of 74% in January 2015. The trade margins declined subsequently and hovers at
Fig. 7.12 Retail trade margin for regulated SKUs before and after the 2013 DPCO implementation
around 40% at the end of our dataset in July 2016. The Figure shows how pharma-
ceutical firms strategically doubled or tripled margins, even though the 2013 DPCO
assumes a margin of 16% in determining the ceiling price.
We examine the extent to which margins changed for the top 16 price-regulated
medicines in our dataset with more Rs. 10 billion in sales during January 2011 and
July 2016. We plot the evolution of margins before and after the 2013 DPCO in
Fig. 7.13. Although the margins did not increase substantially in the case of four
medicines, in the remaining cases, they increased multiple times the initial margin.
For example, in the case of Paracetamol, the margins increased to more than 250%
during August 2013.
Next, we report in Table 7.3 the average trade margin for all the price-controlled
medicines during 2011–2015. We find that in 2015, none of the medicines had an
average trade margin of less than 16%, the lowest being 16.7 for Deferoxamine. For
many of the medicines, the trade margins in 2012, 2013, and 2014 remained
considerably higher compared to 2011 and 2015, indicating the manner in which
pharmaceutical firms collectively manipulated the margins during the implementa-
tion of the 2013 DPCO. Therefore, one can conclude that the DPCO 2013 did not
succeed in lowering trade margins in the Indian pharmaceutical industry. Addition-
ally, the lines for scheduled and non-scheduled drugs deviate towards the end of the
observed period, with the line for scheduled drugs increasing more rapidly. Overall,
these analyses suggest that pharmaceutical firms strategically changed their margins
to mitigate the impact of the 2013 DPCO. Since we observed similar patterns of
changes to trade margins for both scheduled and non-scheduled tablets, there is
strong evidence that the DPCO 2013 failed to contain trade margins.
7.6 Evidence of Temporary Increases in Product Margins
185
Fig. 7.13 The evolution of retail trade margins for the top 16 medicines with more than Rs. 10 billion in sales during Jan 2011–Jul 2016
Table 7.3 Average trade margin, as a percentage, by year for price-controlled medicines
Medicine | 4-digit category 2011 2012 2013 2014 2015
Water For Injection | K5A1 84.02 2656.28 2288.04 1507.79 330.29
Metylergometrine | G2A3 35.23 215.71 196.09 184 109.66
Cetirizine | R6A3 54.51 223.46 238.7 190.57 88.47
Atorvastatin | C10A1 25.5 49.03 54.74 128.93 74.14
Tramadol | N2B5 36.55 131.57 176.2 177.69 73.72
Enalapril | C9A6 25.41 73.2 211.2 79.03 66.92
Mifepristone | G3X2 40.93 121.47 87.18 119.85 66.41
Omeprazole | A2C1 54.88 148.51 182.33 176.17 66.08
Suxamethonium | M3A11 25 65.33 71.82 64.95 65.07
1/1 Electrolyte Solutions | K1A1 26.23 77.27 99.29 91.04 62.85
Diclofenac | M1A12 34.21 82.16 89.08 102.38 59.46
Propofol | N1B5 24.93 62.51 77.39 79.39 57.47
Vancomycin | J1X2 26.86 65 77.75 67.24 57.11
Albendazole | P1B1 32.07 115.11 124.7 101.53 54.55
Streptokinase | B1D2 22.85 54.84 68.43 53.07 50.66
Hepatitis B | J7A3 105.38 118.87 110.46 145.88 48.1
Ofloxacin | J1G9 31.21 72.83 82.17 81.83 47.34
All Oral Electrolytes - Ors | A7G2 27.67 68.15 88.42 81.16 43.1
Sodium Bicarbonate | A2A20 24.98 49.47 49.78 40.05 42.78
Folic Acid | B3A4 28.09 81.18 107.78 125.49 41.91
Domperidone | A3F7 32.14 125.39 144.04 147.54 41.29
Amikacin | J1 K4 32.45 89.4 100.89 92.46 41
Snake-Bite Sera | J6A1 25 25.54 49.96 73.46 40.33
Fluconazole | J2A4 33.75 108.36 108.11 89.87 40.05
Ringers And Ringers Lactate Solutions | 29.33 120.66 116.26 142.37 39.4
K1A7
Amlodipine | C8A1 28.81 45.75 46.87 51 39.23
Paracetamol | N2B1 32.42 72.82 135.29 144.19 37.35
Ondansetron | A4A2 28.91 60.63 74.05 73.98 37.09
Pantoprazole | A2C4 28.28 57.47 75.69 55.32 36.87
Norethisterone | G3A12 25.87 34.68 36.99 36.59 36.86
Ciprofloxacin | J1G1 31.52 73.89 75.71 79.39 36.52
Amoxycillin | J1C1 27.77 93.93 106.01 80.08 36.36
Alprazolam | N5D1 40.26 66.96 198.61 94.62 36.26
Cefalexin | J1D1 28.53 115.54 97.43 105.41 36.14
Enoxaparin | B1B3 26.57 38.67 50.82 45.51 35.94
Povidone Iodine | D8A2 35.53 77.38 103.5 83.71 35.81
Lidocaine | N1C10 24.97 78.45 63.72 51.6 35.58
Tetanus | J7A2 25.81 38.88 44.99 46.87 35.45
Allopurinol | M4A4 32.39 55.14 64.12 72.49 35.37
Bisacodyl | A6B5 26.53 40.02 51.83 84.89 35.25
Thiopental Sodium | N1B6 25.42 70.93 82.5 35.93 34.4
Iuds Containing Hormones | G3A9 35.2 44.25 33.6 42.93 34.26
(continued)

Atenolol | C7A5 25.47 42.48 55.72 44.25 34.18
Ampicillin | J1C7 26.84 71.28 88.26 69.8 34.15
Leflunomide | M5C1 26.85 28.45 30.49 34.34 34.1
Isoflurane | N1A4 24.57 83.94 296.86 351.57 33.86
Levo-Thyroxine (Synthetic) | H3A2 25.61 28.04 53.45 41.88 33.61
Mesna | V3D5 38.23 27 55.81 91.39 33.28
Calamine | D2A12 26.51 30.34 31.88 34.26 33.01
Hydrocortisone | H2A7 30.19 78.68 91.76 62.41 32.37
Oxytocin | G2A4 31.68 82.59 61.15 96.53 31.77
Phenobarbitone | N3A10 24.14 27.98 32.24 30.17 31.65
Isosorbide-5-Mononitrate | C1E1 25.99 29.67 35.57 33.52 31.52
Metoclopramide | A3F19 28.36 39.25 39.84 41.74 31.49
Ceftriaxone | J1D17 28.37 56.63 64.72 63.35 31.41
Indinavir | J5B8 25 40.89 30.46 29.58 31.25
Ipratropium | R3A7 25 28.82 31.25 36.58 31.25
Mercaptopurine | L1B8 29.59 29.67 30.35 26.04 31.25
Gentamicin | S3A4 27.36 52.37 58.37 61.68 31.11
Amoxycillin + Clavulanic Acid | J1C4 26.95 42.16 49.69 42.09 31.1
Clotrimazole | D1A1 34 29.29 35.71 50.56 31.01
Digoxin | C1A1 20.98 26.7 60.83 91.41 31
Ceftazidime | J1D20 24.91 61.84 44.22 45.6 30.61
Promethazine | A4B1 27.08 41.92 56.7 45.59 30.39
Dexamethasone | H2A5 27.26 70.4 61.65 65.26 30.24
Diazepam | N5D9 44.08 45.62 45.18 58.35 30.22
Clopidogrel | B1C5 26.03 52.33 40.66 32.05 30.15
Glibenclamide | A10B1 25.09 299.78 60.66 40.43 30.14
Permethrin | P2A4 25.29 54.24 34.61 35.62 30.06
Zinc | A12C3 25.51 27.02 29.73 29.06 30.04
Esmolol | C7A23 25 33.59 42.84 30.82 30.03
Clindamycin | J1F3 25 29.69 31.25 63.89 30
Dextromethorphan | R5F3 24.99 29.04 29.99 29.99 29.99
Tropicamide Eye Drops/Ointment | S1E5 25.05 26.51 25.86 28.16 29.94
Framycetin | D6A5 24.97 24.31 25.49 28.93 29.93
Asparaginase | L1X32 30.18 15.59 21.07 52.54 29.91
Isosorbide Dinitrate | C1E3 24.87 28.53 28.5 26.48 29.9
Diloxanide | P1A4 24.95 27.71 29.81 34.23 29.88
Spironolactone | C3A3 24.97 24.15 25.47 28.43 29.87
Ciprofloxacin | S3A2 27.57 36.83 40.81 36.53 29.85
Hydrochlorothiazide | C3C8 24.95 27.1 31.86 28.44 29.84
Vitamin B1 Plain (With Additives) | A11E13 24.99 28.62 30.85 31.23 29.76
Miconazole | D1A4 29.53 117.45 61.43 47.93 29.66
Metformin | A10B6 25.5 29.33 33.35 30.43 29.65
Methyl Prednisolone | H2A8 25.12 42.62 46.27 39.46 29.65
(continued)

Danazol | G3B3 25.02 31.05 29.68 27.57 29.58
Isoniazide | J4A6 19.01 28.12 31.55 29.29 29.57
Efavirenz | J5B6 35.5 35.36 31.41 38.57 29.41
Azithromycin | J1F1 26.54 34.37 39.13 35.81 29.4
Amiodarone | C1B3 26.02 30.02 30.81 27.87 29.33
Hydroxychloroquine | P1D2 25.92 29.81 28.91 28.05 29.26
Haloperidol | N5B9 23.73 27.27 26.74 25.6 29.21
Methotrexate | L1B1 25.87 33.42 32.67 30.88 29.19
Prednisolone | S3B7 24.99 41.46 51.27 24.43 29.1
Hyoscine | A3A32 25.39 36.07 27.71 40.59 29.03
Levodopa + Carbidopa | N4A6 35.38 26.21 23.27 23.07 28.99
Dactinomycin | L1D3 19.05 16.39 22.81 24.8 28.89
Cefixime | J1D26 26.56 55.74 51.04 46.37 28.88
Carbimazole | H3B1 25 39.18 36.18 25.6 28.83
Cisplatin | L1X3 20.14 33.71 36.45 32.01 28.8
Nitrofurantoin | G4A3 25.31 29.83 29.4 31.05 28.79
Timolol Eye Drops/Ointment | S1D24 30.28 29.32 28.83 35.96 28.76
Glyceryl Trinitrate | C1E4 24.99 28.73 33.38 30.33 28.66
Propranolol | C7A37 25.01 29.17 28.51 31.32 28.65
Midazolam | N5D16 26.91 46.92 59.13 32.08 28.64
Dicyclomine | A3A1 23.76 79.64 35.84 27.41 28.61
Lamivudine + Zidovudine | J5B18 33.98 28.6 52.92 32.39 28.54
Sodium Valproate | N3A14 25.87 28.26 30.67 29.66 28.51
Imipramine | N6A10 27.78 27.29 28.21 41.69 28.4
Nevirapine | J5B7 24.99 29.91 33.26 41.33 28.4
Aciclovir | D6B1 25.61 27.76 46.52 33.98 28.38
Ispaghula | A6C1 25.4 45.99 36.98 33.47 28.38
Homatropine Eye Drops/Ointment | S1E3 25.21 27.21 34.05 32.12 28.25
Glucose | K1C4 24.94 67.6 102.13 124.55 28.22
Nifedipine | C8A16 25.72 49 54.17 31.99 28.22
Mannitol | C3F5 27.49 75.5 105.94 73.64 28.21
Lorazepam | N5D11 27.1 28.17 28.53 27.44 28.2
Lamivudine + Stavudine | J5B19 26.91 29.01 31.78 30.8 28.2
Mesalazine | A7E1 25.2 26.83 24.59 25.59 28.17
Lamivudine | J5B1 25.04 50.91 113.52 27.01 28.11
Pyrimethamine | P1D3 24.94 29.68 31.26 31.26 28.1
Diltiazem | C8A6 26.04 29.39 28.94 28.12 28.1
Aciclovir | J5A4 25.83 37.23 35.9 36.43 28.07
Acetazolamide Systemic | S1D2 25.06 27.89 28.22 26.92 28.07
Ketamine | N1B2 24.98 34.13 49.18 74 28.02
Metoprolol | C7A29 26.26 31.75 30.18 29.62 27.97
Mefloquine | P1D18 25.07 28.68 28.98 24.06 27.97
Warfarin | B1X9 24.99 29.72 32.13 28.92 27.94
(continued)

Misoprostol | A2E1 24.99 29.64 31.18 31.62 27.92
Lamivudine + Stavudine + Nevirapine | 27.83 28.93 52.88 28.01 27.92
J5B30
Losartan | C9D3 25.77 35.17 35.46 33.92 27.89
Atropine | A3A10 28.53 63.44 67.7 74.24 27.85
Ibuprofen | M1A30 25.24 48.78 47.19 54.64 27.83
Amitriptyline | N6A1 26.3 28.07 33.66 29.54 27.81
Clomifene | G3G2 25.8 27.76 36.2 35.26 27.72
Azathioprine | L4A3 25.92 61.02 53.55 36.23 27.67
Flutamide | L2B5 24.84 29.28 33.69 30.98 27.67
Betamethasone | D7A2 25.36 24.66 23.01 26.02 27.65
Zidovudine | J5B2 25 29.02 29.48 29.27 27.58
Unfractionated Heparins—Systemic | B1B1 28.3 54.16 43.36 56.36 27.56
Terbutaline | R5D3 25.88 54.97 37.3 31.96 27.52
Lithium | N6A11 25.09 25.5 30.16 30.81 27.52
Verapamil | C8A23 24.8 22.72 21.64 20.84 27.48
Aluminium + Magnesium | A2A15 25.13 27.28 28.23 99.89 27.46
Lamivudine + Zidavudine + Nevirapine | 27.5 60.4 35.49 31.59 27.46
J5B22
Raloxifene | G3 J2 24.91 28.77 28.52 28.33 27.45
Ranitidine | A2B4 27.63 43.54 56.65 41.8 27.44
Ritonavir | J5B9 25 29.86 31.25 28.91 27.39
Povidone Eye Drops/Ointment | S1F25 29.69 29.69 28.12 28.37 27.24
Diethylcarbamazine | P1E2 25.06 152.76 163.54 46.5 27.24
Phenytoin | N3A12 25.2 27.66 30.12 28.13 27.21
Fluorouracil | L1B5 25.54 41.33 2405.19 32.33 27.15
Famotidine | A2B2 37.88 320.82 69.06 153.44 27.07
Olanzapine | N5A5 32.89 30.98 31.31 29.42 27.05
Albumin | J6A8 33.9 34.19 43.69 30.47 27.04
Dopamine | C1C7 24.75 37.68 78.98 40.69 27.03
Sulfasalazine | A7E3 24.98 52.84 30.8 23.79 27.02
Colchicine | M4A2 24.98 28 28.15 24.67 26.96
Bupivacaine | N1C4 24.99 37.78 31.23 32.54 26.94
Bcg | J7A11 27.47 28.51 29.42 28.27 26.86
Trihexyphenidyl | N4A10 24.87 28.7 49.38 28.75 26.85
Artesunate + Sulfadoxine + Pyrimethamine | 25 33.77 31.42 28.11 26.81
P1D20
Medroxyprogesterone | G3A19 23.51 24.32 25.7 25.59 26.8
Cetrimide | D8A8 30.96 31.78 41.12 36.41 26.78
Neostigmine | N7C10 25.68 55.46 150.3 160.03 26.76
Quinine | P1D8 25.06 65.25 33.75 34.51 26.69
Salbutamol | R3A11 38.24 99.42 126.49 42.23 26.69
Pilocarpine Eye Drops/Ointment | S1D23 25.66 25.65 28.46 33.72 26.63
(continued)

Fluoxetine | N6A8 25.09 45.2 62.01 41.17 26.57
Adenosine | C1B1 25 39.54 50.47 59.61 26.54
Testosterone | G3B2 25 26.78 29.51 26.1 26.53
Pyrazinamide | J4A10 20.63 85.75 40.43 37.05 26.52
Prednisolone | H2A6 24.94 24.79 24.09 26.76 26.51
Atropine Eye Drops/Ointment | S1E1 25.09 27.83 27.74 39.59 26.41
Gemcitabine | L1B10 26.26 46.93 114.78 93.14 26.39
Amphotericin B | J2A2 25 28.37 32.89 62.04 26.32
Ethambutol | J4A3 19.03 26.82 30.02 26.95 26.3
Tamoxifen | L2B1 25.29 38.66 45.95 28.78 26.29
Imatinib Mesylate | L1X16 28.87 61.13 69.2 95.01 26.28
Metronidazole | A7A1 25.57 44.31 35.48 26.99 26.26
Methyldopa | C2A7 25.35 23.22 24.25 22.44 26.21
Pyridostigmine | N7C11 24.99 25.9 27.64 24.51 26.15
Doxycycline | J1A6 25.47 104.81 91.51 56.74 26.09
Atracurium | M3A2 24.72 41.62 30.22 57.39 26.05
Gentamicin | J1 K1 58.95 38.07 33.91 29.06 26.01
Beclomethasone | R3A2 25 22.9 25 27.37 25.99
Carbamazepine | N3A1 21.66 26.71 25.39 29.59 25.98
Melphalan | L1A5 17.57 27.41 64.51 50.56 25.8
Filgrastim | L3A2 35.8 82.06 69.03 44.77 25.79
Cefotaxime | J1D13 24.87 35.56 37.26 33.94 25.77
Chlorpromazine | N5B2 26.8 25.5 58.56 24.35 25.76
Erythromycin | J1F4 25.43 36.55 41.31 25.14 25.64
Primaquine | P1D6 25.3 30.6 31.2 35.37 25.64
Nitroprusside | C2B21 26.68 30.61 26.38 32.9 25.63
Betaxol Eye Drops/Ointment | S1D5 24.99 24.54 23.88 25.41 25.62
Human Premix | A10G1 20.99 25.09 28.85 27.18 25.59
Codeine | R5E3 24.99 33.41 33.1 30.58 25.49
Pyrimethamine + Sulphadoxine | P1D4 24.92 24.85 24.44 25.54 25.49
Dobutamine | C1C5 25 61.75 56.84 26.84 25.48
Ethinylestradiol | G3A18 24.99 29.57 36.84 24.97 25.34
Dapsone | J4B3 25 30.87 39.47 25.88 25.32
Naloxone | N7E3 24.62 29 30.73 22.53 25.32
Regular Human Insulin | A10H1 24.19 23.49 25.66 25.8 25.19
Bromocriptine | N4A2 25.88 30.61 31.39 30.33 25.14
Cyclophosphamide | L1A3 25.02 33.38 27.74 29.95 25.13
Anti Rabies Vaccine - Arv | J7A16 23.72 28.66 30.31 29.38 25.07
Cyclosporin | L4A4 25.87 30.19 32.35 28.48 25.01
Phytomenadione | B1A5 24.78 29.69 30.49 30.92 25.01
Interferon Alpha 2B | L3B10 26.04 25.53 20.44 31.82 25
Adrenaline | C1C3 25 637.79 251.17 305 25
(continued)

Stavudine | J5B3 24.99 136.04 255.4 29.32 25
Factor Viii | B2D1 79.08 48.05 57.94 39.8 25
Polio | J7A9 80.96 25 122.65 70.77 25
Hydrocortisone | D7A8 25 30.58 77.19 30.3 25
Topical Contraceptives | G2B1 25 25.09 24.31 19.67 25
Fentanyl | N2A4 24.99 23.15 11.62 24.33 25
Measles | J7A6 23.26 25 25 25 25
Cloxacillin | J1C23 23.52 27.5 408.64 382.99 24.99
Fluconazole | D1A17 23.77 27.87 25 39.02 24.96
Clofazimine | J4B2 24.98 40.17 24.36 19.47 24.94
Streptomycin | J4A18 18.99 22.43 22.48 20.63 24.76
Chloramphenicol | S1A2 24.99 26.36 26.16 29.71 24.68
Anti Rh-D Immunoglobulin | J6E2 25 25.34 25.72 24.55 24.68
Plain Vitamin C | A11X31 463.06 515.82 605.87 27.21 24.64
Sulfacetamide | S1A55 24.56 31.65 32.22 32.96 24.61
Chloroquine | P1D1 25.61 23.72 28.37 25.67 24.56
Ethinyl Estradiol + Levonorgestrel | G3A11 25.57 25.22 23.1 30.32 24.52
Chlorpheniramine | R6A4 24.99 26.96 35.84 28.08 24.5
Aspirin | B1C1 25.03 80.68 461.41 26.8 24.38
Low Dextrans (< ¼ 50,000 Daltons) | K2A1 25 27.71 30.3 26.93 24.05
Urokinase | B1D1 19.29 55.45 63.42 18.58 23.89
Piperazine | P1B6 24.98 27.77 44.46 74.17 23.75
Betamethasone | H2A9 25.06 32.56 27.11 24.71 23.75
Protamine | V3E4 19.05 28.18 30.9 27.01 23.69
Vincristine | L1C2 21.77 33.36 33.33 27.78 23.61
Penicillamine | M1C5 27.22 26.24 31.33 23.3 23.39
Paclitaxel | L1C8 20.63 47.72 340.3 208.84 23.25
Dexchlorpheniramine | R6A27 24.98 28.82 29.32 34.11 22.28
Rifampicin | J4A12 19.22 21.27 23.65 23.58 22.16
Procarbazine | L1X19 19.05 26.93 172.99 45.86 21.95
Vitamin A | A11X25 26.08 24.24 22.99 19.26 21.89
Ifosfamide | L1A4 25.49 42.76 25.46 37.94 21.81
Griseofulvin | J2A8 24.98 82.08 150.26 34.25 21.78
Pheniramine | R6A17 24.93 24.22 23.81 22.59 21.65
Carboplatin | L1X2 23.04 53.19 52.43 35.08 21.44
Dacarbazine | L1A23 27.69 34.57 36.47 36.22 21.26
Etoposide | L1C4 20.34 55.99 49.89 43.82 21.08
Doxorubicin (Plain) | L1D5 26.71 56.32 34.01 31.76 21.04
Oxaliplatin | L1X4 45.95 72.59 65.88 49.71 20.73
Doxorubicin (Liposomal) | L1D13 19.05 89.73 80.14 46.05 20.25
Daunorubicin | L1D4 19.05 29.51 25.04 42.19 19.6
Vinblastine | L1C1 19.05 23.51 24.99 25.34 19.54
(continued)

Bleomycin | L1D2 22.36 48.92 46.14 34.87 19.49
Mitomycin | L1D8 29.25 27.36 78.15 57.69 19.29
Glucagon | H4B1 18.53 27.78 29.19 32.26 19.21
Chlorambucil | L1A1 21.76 27.22 28.94 28.79 18.47
Deferoxamine | V3F2 19.05 13.4 60.91 78.93 16.7
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Part IV
Enforcement and Compliance
Chapter 8
Enforcement and Compliance with Price
Ceilings on Essential Medicines
8.1 Introduction
The effectiveness of price control regulations depends as much on the design of the
policy as on implementation. Yet rarely if ever studies examine the enforcement and
compliance aspects of such price control regulations. In this chapter, we address this
gap in the literature by examining the extent of compliance with price ceilings
imposed on essential medicines in India in 2013 and how it has changed in response
to enforcement efforts. We estimate the extent of noncompliance with the 2013
DPCO and the total overcharged amount. We identify firms and markets with
significant levels of noncompliance. We also reflect on whether the regulator has
followed a targeted approach to enforcement to induce compliance and whether such
targeting has had any impact on overall compliance. We examine efforts by the
regulator to ask firms to self-report their prices and whether that has had any impact
on inducing compliance.
8.2 The Literature on Regulatory Compliance
The enactment of laws and regulations does not by itself ensure compliance. Some
firms obey, others evade, and yet others defy them. Compliance depends on the
regulator’s ability to set and communicate standards, to design and implement
mechanisms to monitor evasion and noncompliance and to enforce regulations by
punishing—swiftly, demonstrably, and impartially—those that flout the standards.
Regulations are pervasive, but compliance remains a global challenge for environ-
mental protection, public finance and tax collection, consumer protection, and health
and safety. A large body of work focuses on compliance issues in tax collection and
environmental protection, but very little exists on compliance in the area of phar-
maceutical price regulation. Heyes (2000) surveys the theoretical literature on

198 8 Enforcement and Compliance with Price Ceilings on Essential Medicines
enforcement and compliance with a focus on environmental protection, but these

theories are useful in our context as well.
Following Becker (1968), one would expect compliance to increase with fines
and inspections. While in theory full compliance may be achieved by sufficiently
increasing fines and inspections, in practice regulatory authorities have limited
resources and ability to monitor, and there are practical, legal, and political con-
straints on the extent to which penalties can be imposed. For example, fines cannot
exceed the total wealth of a violating firm. Also, large fines for small violations lead
to poor marginal deterrence for large violations, that is, there is little incentive for
firms to commit small violations instead of large ones if even small violations invite
large fines (Stigler 1970). Besides fines and inspections, a third lever at the regula-
tor’s disposal is the regulatory standard itself. A regulator, for example, can decide
how high or low should the price ceiling be on a given essential medicine. If the
regulator believes it cannot achieve full compliance with a given standard using
monitoring and punishment alone, then it can set a sufficiently strict statutory
standard in an attempt to achieve the more lenient informal standard. However,
Kambhu (1989) suggests that imposing stricter standards can, contrary to our
intuition, lower compliance, as firms invest in defensive measures such as litigation
or deception. Shaffer (1990) finds that stricter standards can increase compliance if
nonlinear penalties can be implemented but such schemes may not be practical
where inspectability and recovery of fines remain a challenge. In addition, when a
regulator imposes a fine, firms invest in challenging the enforcement power of the
regulator (Nowell and Shogren 1994), switching to production and operational
procedures that are less transparent (Heyes 1994), and lobbying to weaken regula-
tion and enforcement (Cheng and Lai 2012), all of which lower compliance when
enforcement is strengthened.
Given the limits on the effectiveness of fines, inspections, and strict standards in
achieving full compliance, some studies suggest innovative strategies to leverage
limited enforcement resources to induce greater compliance. For example, a targeted
enforcement strategy that divides firms into two (or more) groups based prior history
of compliance and focuses on firms with a prior record of noncompliance is shown to
be advantageous compared to random inspections (Greenberg 1984; Harrington
1988). Raymond (1999) shows that such targeting requires that the regulator know
each firm’s compliance costs, which may not be possible in many contexts. Malik
(1990) suggests enforcement leverage based on screening for firms that gain more
from potential violations, monitoring and imposing fines on them if they are found to
violate while not enforcing the standard on the remaining firms can induce greater
overall compliance. Kaplow and Shavell (1994) suggest enforcement leverage can
be built by asking firms to self-report, as it can lead to savings because those who
self-report violations do not require detection and they bear sanctions with certainty.
Livernois and McKenna (1999) suggest that such self-reporting can increase com-
pliance even under a regime of low fines if the regulator has the power to order any
self-reporting, noncompliant firm to return to compliance. Heyes and Rickman
(1998) suggest that when the regulator meets a regulated firm in more than one
regulated market, the regulator tolerates violations in some markets to induce greater
8.2 The Literature on Regulatory Compliance 199
compliance in others, which they term regulatory dealing. Overall, the above
theoretical literature suggests ways to induce greater compliance while recognizing
that the regulatory resources and powers are limited and that fines are not costless
transfers from noncompliant firms to the regulator.
Separate from these economic models, scholars have developed regulatory
enforcement models that recognize economic, social, and normative motivations
underlying compliance and noncompliance and the role of legitimacy and fairness of
the regulation and enforcement procedure in achieving compliance. As Garvie and
Keeler (1994) note, the non-economic literature distinguishes enforcement by deter-
rence and compliance regimes. Whereas a deterrence regime looks at each episode of
violation independently and unforgivingly, a compliance regime promotes compli-
ance through frequent contact between the regulator and the firm and through
tolerance for intermittent violations as long as the firm is on a trajectory of compli-
ance. Among the non-economic theories promoting such a compliance regime is the
idea of responsive regulation, which suggests that compliance increases as the
regulated firm has an increasingly positive assessment of and attitude towards the
regulator (Ayres and Braithwaite 1992). These scholars suggest an incremental
approach to the severity of punishments for violations starting with persuading the
violating firm to change its behavior without imposing any fines. They also suggest
that regulators can collaborate with NGOs to build social pressure and induce
compliance, particularly in developing countries (Braithwaite 2006).
The empirical literature largely examines compliance with taxes and environ-
mental standards in the US. Early empirical work finds that resources for enforce-
ment play a significant role in compliance (Epple and Visscher 1984). Regens et al.
(1997) find that firms invest in compliance-specific tools and personnel when the
regulator’s budget increases. Laplante and Rilstone (1996) find that inspections and
the threat of inspections induce compliance. Gray and Deily (1996) find that
regulators focus enforcement resources on identifying large violations and that
greater enforcement leads to greater compliance. Magat and Viscusi (1990) and
Nadeau (1997) find that rigorous enforcement has led to better compliance and
shorter durations of noncompliance in the US pulp and paper industry. Harrison
(1995) compares the US pulp and paper industry with the same industry in Canada
and finds that the relatively less adversarial and cooperative approach of the Cana-
dian regulator contributed to a relatively lower level of compliance in Canada.
Helland (1998) finds that self-reporting by firms indicates their willingness to
cooperate with the regulator and self-reporting increases after targeted inspections
that detect violations. Yee et al. (2016) provide evidence to suggest that a clearer
understanding of the enforced regulation and the fear being targeted arbitrarily play a
role in increasing compliance in developing countries.
The literature on enforcement and compliance with pharmaceutical price controls
is surprisingly limited given the number of countries experimenting with such
regulations. In an exception, Menon (2001) suggests that the Canadian experience
in controlling prices for patented medicines through annual reviews by a review
board has been positive. The board does not set prices but highlights cases of
excessive prices, asks firms to voluntarily lower prices, and if necessary, conducts
public hearings. The board also has the option to take legal action if compliance is
not reached. However, we are unaware of a quantitative analysis of the effectiveness
of such an enforcement strategy. A separate stream of literature focuses on the
impact of price controls on incentives for innovation and launch of patented med-
icines in developing countries (Cockburn et al. 2016; Berndt and Cockburn 2014;
Kyle 2007; Danzon et al. 2003) and strategies for pricing such medicines in
developing countries (Cockburn et al. 2016; Danzon et al. 2015).
Another stream of literature looks at the impact of pharmaceutical price controls
on prices in developing countries (Yang et al. 2010; Yang et al.2013; Meng et al.
2005). Closely related to our context, Bhaskarabhatla et al. (2016) examine the
impact of partial market-based price regulation of essential medicines implemented
in India in 2013 on prices for Metformin, a widely-used antidiabetic medicine. They
find that firms increased their prices in a coordinated manner before the implemen-
tation of the regulation to inflate the ceiling price. However, they do not examine
issues surrounding enforcement and compliance. Chu et al. (2011) examine the
impact of reforms in Taiwan found that average cost per prescription and the
duration of prescriptions increased in Taiwan when price reduction policies were
implemented as physicians found ways to circumvent the controls, reflecting chal-
lenges with compliance. The Philippines introduced pharmaceutical price controls in
2009, but anecdotal evidence suggests that it has led to the shortage of inexpensive
generic medicines.1 Overall, we are unaware of studies that examine enforcement
strategies and compliance with price controls on essential medicines in developing
countries. We address this gap by exploiting the recent revision of price controls on
essential medicines in India.
8.3 Price Controls in India: Enforcement and Compliance
8.3.1 Historical Background for Pharmaceutical Price

Controls in India
Price controls have been commonplace in India since its independence in 1947.
Many controls on commodities instituted by the British before independence con-
tinued to exist even after. Price controls were made permanent through the Essential
Commodities Act of 1955, which regulated the prices of a wide variety of products
such as petroleum and related derivatives, food grains and seeds, textiles, fertilizers,
and medicines. Noncompliance with these price controls was treated as a criminal
offense. Activities such as hoarding, black-marketeering, tax evasion, food adulter-
ation, and illegal trading in licenses and permits and such offenses invited impris-
onment up to 3 years or fine or both as documented by De (2014: p. 289):
1
Philippines President Arroyo Orders Drug Price Controls, Wall Street Journal July 28, 2009.
Philippine Price Controls Hamper Rise of Generics, Wall Street Journal June 18, 2010.
8.3 Price Controls in India: Enforcement and Compliance 201
The controls system was undergirded by an exceptional regime of criminal law. These arose
from the belief that these ‘socio-economic’ criminals needed stronger deterrence than fines
and public shaming. Indeed, a socio-economic offence was characterised as one that was not
challenged by the ‘organised moral sentiments’ of the community, because the crimes were
often complex, and public agencies like the press were themselves controlled by businesses
involved in violating these laws. . .. In recognition of the fact that companies were likely to
try and contravene such orders, the controls regime made all directors, managers, and
officers of a corporate body liable for a contravention unless they could prove that this
took place without their knowledge or negligence. In cases of violation, deviating from the
Indian Evidence Act, the burden of proof was shifted to the accused. Perhaps most omi-
nously, those charged for violating control orders would be subject to a summary trial under
the Criminal Procedure Code.
It is difficult to imagine noncompliance under such a stringent legal framework.

Nonetheless, over the years the pendulum has swung in the opposite direction
regarding enforcement of price controls in India although laws remain in place.
For example, although tax evasion is considered a serious economic offense even
today, only a small percent of the population in India pay taxes, indicating poor
enforcement and compliance. It is in this new regulatory context that the pharma-
ceutical price controls operate in India. Price controls have been imposed on
medicines in India through the Drug Price Control Order (DPCO) in 1970. Subse-
quently, several DPCOs have been issued in 1979, 1987, and 1995, each, according
to a study by the regulator, with a progressively ‘more liberalized and industry-
oriented view’ (NPPA 2002). Prior studies by the All India Drug Action Network
(AIDAN), an NGO, identified cases of flagrant violations under the 1995 DPCO. We
report in Table 8.1, a sample of medicine brands that violated the 1995 DPCO. The
extent of violations was significant, often more than 100% of the ceiling price. We
plot in Fig. 8.1 the overcharged amount recovered and not recovered under the
DPCO 1995. We find that the recovered amount has remained constant, but the
overcharged amount has sharply increased over time.
8.3.2 The Enforcement Agency: National Pharmaceutical

Pricing Authority
It was not until 1995 that an enforcement agency was set up to determine the level of
noncompliance and undertake remedial action, although price controls existed since
1970. The National Pharmaceutical Pricing Authority (hereafter, NPPA) is respon-
sible for fixing and revising the prices of selected medicines and enforcing price
ceilings and ensuring availability of medicines in the country. The NPPA currently
has a pricing division that determines ceiling prices, a monitoring and enforcement
division that collects data and identifies cases of overcharging, two divisions dedi-
cated to recovering the overcharged amount from the pharmaceutical firms, and a
legal division to prosecute noncompliant firms.
The NPPA operates by identifying instances of overcharging and sending notices
demanding the return of the overcharged amount with interest. However, firms that
Table 8.1 Flagrant violations of DPCO 1995

Over pricing violating ceiling price
Brand Pack Existing price Approved price Difference %
Astra Zeneca
Theobric tabs 10’s 7.45 2.88 158.68
Theobric SR tabs 10’s 13 5.98 117.39
Glaxo Smith Kline
Zevit syrup 30 ml 27 7.78 247.04
Salbutamol Resp 10 ml 12.69 7.78 63.11
Vent plus ease 30’s 16.5 13.28 24.25
USV Limited
Visyneral 15 ml 18.61 11.2 66.16
Covita plus 10’s 34 5.24 548.85
MVI injection 10 ml 12.97 5.56 133.27
CPV Forte caps 10’s 110 44.83 145.37
Glynase XL tabs 10’s 19 9.53 99.37
Doxy-1 caps 8’s 26.8 7.02 281.77
Visyneral Zink 15 ml 28.58 8.7 228.51
Wockhardt
Dexvita drops 15 ml 27 10.35 160.87
Dexvita syrup 120 ml 39 14.28 173.11
Source: All India drug action network
10000
Overcharged amount not recovered

Overcharged amount recovered
Overcharged amount demanded
8000
Rs. Millions
6000
4000
2000
0
2010 2012 2014 2016

Year
Fig. 8.1 Overcharging by pharmaceutical firms and recovery of fines by the NPPA under
DPCO 1995
8.3 Price Controls in India: Enforcement and Compliance 203
violate price ceilings do not pay any additional fines beyond the interest rate on the
overcharged amount. The NPPA has a nearly two-decade-long record of enforce-
ment of price ceilings on bulk drugs under the DPCO 1995 regime. During this
period, the NPPA has sent more than 1280 notices, but it has a poor record of
recovering the overcharged amount. Using data from the NPPA, we plot in Fig. 8.1
the amount the NPPA identified as overcharged and the amount that was recovered
so far under the 1995 DPCO. The recovered amount has not increased while the
extent of overcharging has been rapidly rising, reflecting the NPPA’s inability to
enforce price controls on medicines in the DPCO 1995 list itself. Responding to a
question in the Indian parliament, a minister in the government noted that the NPPA
had recovered only 7.8% of the nearly Rs. 49.28 billion it identified since August
1997 through March 31, 2016.2 All India Drug Action Network (AIDAN), an NGO
pursuing affordable access to essential medicines has identified several flagrant
violations of the 1995 DPCO and argued that the process of recovering overpriced
amount has been abandoned for years (see Table 8.1).
The increase in the number of medicines from 74 to 348 in the 2013 DPCO and
the additional qualifications on dosages and delivery forms of a regulated medicine,
makes the job of monitoring all the more challenging for the NPPA given its history
of enforcement. For example, the NPPA now sets different prices for tablets and
capsules of the same dosage strength of medicine in some cases, which the NPPA
must also monitor. What is further troubling is the weakening of enforcement
powers. For example, the 2013 DPCO provides NPPA “power of entry, search
and seizure,” but penalties under the Essential Commodities Act of 1955 do not
apply. That is, the regime of criminal law that undergirded price controls in the post-
independence era does not appear to apply to violations of the 2013 DPCO. The
NPPA has sought to amend it so that a tougher law would discourage noncompliance
(Dey 2016). Also, the 2013 DPCO elaborated on the procedure for the recovery of
the overcharged amount under 1987 and 1995 DPCOs without mentioning the 2013
DPCO, leading to confusion among some experts (Vijay 2013).
Newspapers have documented violations of DPCO 2013 and editorials have
called for an extensive price monitoring network that covers all state-level drug
control offices (Francis 2013, 2014). A Parliamentary panel has also asked the NPPA
to vigorously pursue defaulting firms and recover fines (Alexander 2013). In its
response, the NPPA noted that recovery has not happened because several cases are
pending in the courts, including in several High Courts and the Supreme Court. The
NPPA responded to calls for effective action by approving a plan to set up moni-
toring cells across the country, but the implementation challenges remain (Francis
2016a):
Recovery notices are sent by NPPA only when the violations of price fixing orders are
detected. NPPA has been finding it difficult to ensure ground-level compliance of its orders
on ceiling prices for both essential and non-essential medicines ever since it was set
2
Government recovers just 7.8% of Rs 4928 crore drug overcharging fine, Economic Times, May
10, 2016.
up. Being a Central body with no effective network of inspectors in States and Union
Territories to monitor price violations, drug companies have been flouting DPCO until
violations are noticed. NPPA has been trying hard to detect cases of major violations by
seeking support from drug control administrations. Last year, the Authority made an attempt
to involve the state governments in curbing price violations and requested the state drug
control administrations to set up their own price monitoring cells. This did not work out with
no cooperation from most of the state governments. Last June, NPPA announced that it was
planning to set up Price Monitoring Units in seven states for better compliance of price fixing
orders.
The NPPA has struggled to fix the prices of several medicines for more than
2 years after the government decided to control prices because of lack of data on
prices of several medicines. It relied on IMS Health database, which did not contain
data on some medicines manufactured by domestic firms. The NPPA in 2015 asked
firms to self-report prices and began compiling a database of prices called Integrated
Pharmaceutical Database Management System (IPDMS). Recently the NPPA clar-
ified its procedures to recover the overcharged amount, partly leveraging the IPDMS
(Shankar 2016a, b):
The M&E division shall first examine all such cases based on the consolidated price list in
Form I, Form II and Form V furnished by the manufacturers or available on IPDMS as per
Para 15, 16, 24 and 25 of the DPCO, 2013 and verify the fact of overcharging. The
manufacturer and dealers both will be responsible for overcharging on jointly or separate
basis. If the manufacturer has not already furnished the information in Form 1, Form II and
Form V or the information is not enough to draw a conclusion, the Monitoring division will
send the prescribed time-bound preliminary notice (PN) to the company and seek requisite
information on the prescribed format within 21 days from the date of receipt of the PN or
30 days from the date of issue of PN.
The NPPA has also launched a hotline for citizens to call in and report cases of
overcharging and an online portal for registering such complaints. Yet it must be
noted that pharmaceutical prices are in some ways challenging to monitor, as they
can be changed from one production batch to the other. While the NPPA can use the
data reported by IMS or Pharmatrac to set ceiling prices, these datasets have not been
used widely for establishing noncompliance in a court of law, as pharmaceutical
firms will argue that such databases are unreliable. As noted earlier in the book, if the
IMS and Pharmatrac datasets are appropriate to determine the ceiling price, then they
must also be valid for enforcement. As Shankar (2014) notes,
One of the biggest challenges being faced by the NPPA today is to monitor ceiling/retail
price compliance in respect of scheduled drugs/“new drugs.” With over 600 scheduled
formulations, which translate into more than 6000 packs (different brands) sold at over
6 lakh retail outlets spread across the length and breadth of the country the task of ensuring
comprehensive oversight on price compliance by manufacturers, importers, marketers,
distributors, retailers of pharmaceutical products is a very challenging task to accomplish
in the absence widespread consumer awareness regarding ceiling/retail prices of scheduled
drugs/“new drugs” notified by the NPPA as well as a greater degree of self-regulation and
accountability among the pharmaceutical industry & trade.
8.4 Estimating the Overcharged Amount Under 2013 DPCO 205
8.4 Estimating the Overcharged Amount Under

2013 DPCO
We use the AIOCD’s PharmaTrac data for our analysis. The data are widely used by
the financial analysts, pharmaceutical firms, NGOs, retailers and wholesalers, policy
makers in India and researchers around the world (Bhaskarabhatla et al. 2016; Evans
and Pollock 2015). Since the data are compiled by the trade association of retailers,
these data more accurately record prices and sales than other sources such as the IMS
Health. We link data on ceiling prices, obtained from the Compendiums of Ceiling
Prices for 2013, 2014, 2015, and 2016 as compiled by the NPPA. Overall, we find
2028 instances of price setting and revisions over the last 4 years under the 2013
DPCO. We match 783 medicines of a specific dosage and delivery form with entries
in the PharmaTrac database for each month. That is, for Paracetamol, we match
Rs. 0.83 as the ceiling price for the 500 mg tablet, Rs. 1.71 as the ceiling price for the
650 mg tablet. Therefore, we can measure for each Stock Keeping Unit (SKU),
whether there is compliance in a given month or not. We can then estimate the
amount of overcharging for each noncompliant SKU and finally the total amount of
overcharging under DPCO 2013. We begin by illustrating how we calculate
overcharging with the example of Paracetamol tablets for 1 month and highlighting
the challenges in doing such an arithmetic. We then repeat the process to estimate the
overall level of noncompliance.
8.4.1 Estimation of Overcharging Illustrated Using

500 Milligram Paracetamol Tablet SKUs
Our data on Paracetamol contains 835 SKUs for tablets, injections, suspensions, and
oral drops. We focus on 163 SKUs related to 500 mg tablets, which have come under
price regulation since June 2013. We exclude 22 SKUs with more than 30 tablets in
the pack and exclude observations where the maximum retail price is more than ten
times the price to the retailer. These choices reflect our conservative approach to
estimating a lower bound for the overcharged amount and to avoid any suggestion
that such an estimate is due to outliers in the data. We use the following formulae
to convert the ceiling price specified by the 2013 DPCO per tablet into the
SKU-specific ceiling price by multiplying with the number of tablets in the SKU,
as shown in eq. (1).
SKU Ceiling Price ¼ DPCO Ceiling Price ∗ Number of Tablets in Pack ð8:1Þ
Overcharge ¼ ðPharmaTrac Maximum Retail Price SKU Ceiling PriceÞ
∗ Sales Units
ð8:2Þ
We then quantify the overcharged amount, as shown in eq. (2), by subtracting the
SKU-specific ceiling price from the actual price as it appears in the PharmaTrac data
for the SKU in a given month and multiplying the difference with the number of
units of the SKU sold in India in that month. The ceiling price of 500 mg Paracet-
amol tablet was set at Rs. 0.94 in June 2013, and an SKU with ten tablets in the pack
would have a ceiling price of Rs. 9.4. If the pharmaceutical firm sells for more than
Rs. 9.4, then the firm is determined to be overcharging. Note that our estimate uses
the appropriate ceiling price for any given month during this period as it has been
revised over time.
Table 8.2 lists the pharmaceutical firm, the particular SKU of the firm in violation,
and the overcharged amount for the top 50 SKUs with at least Rs. 100 million
overcharged amount between June 2013 and July 2016. Not surprisingly, at the top
Table 8.2 Overcharging under the 2013 DPCO in Paracetamol 500 mg Tablet SKUs above
Rs. 1 million during June 2013 and July 2016
Overcharge
Pharmaceutical firm Stock keeping unit (SKU) (Rs. Millions)
Glaxosmithkline Pharmaceuticals Ltd. Crocin advance 500 mg tablet 15 130.54
Glaxosmithkline Pharmaceuticals Ltd. Calpol 500 mg tablet 15 114.05
Dew Drops Lab Denim P 500 mg tablet 10 16.45
East India Pharmaceutical Works Ltd. Pyrigesic 500 mg tablet 10 12.47
Ipca Laboratories Pvt. Ltd. Pacimol Xp 500 mg tablet 10 10.95
Micro Labs Ltd. Dolo 500 mg tablet 15 9.6
Ronak Labs Cetcold 500 mg tablet 10 7.04
Themis Medicare Ltd. Metacin 500 mg tablet 8 6.18
Apex Laboratories Ltd. P 500 mg tablet 10 5.91
Abbott Healthcare Pvt. Ltd. Malidens 500 mg tablet 10 4.62
Themis Medicare Ltd. Metacin 500 mg tablet 15 4.5
Glaxosmithkline Pharmaceuticals Ltd. Crocin 500 mg tablet 15 4.32
Mankind Pharmaceuticals Ltd. T98 500 mg tablet 10 3.65
Indoco Remedies Ltd. Febrex 500 mg tablet 10 3.16
Troikaa Pharmaceuticals Ltd. Xykaa rapid 500 mg tablet 10 3.15
Medo Pharma Medomol 500 mg tablet 10 2.96
Ipca Laboratories Pvt. Ltd. Pacimol 500 mg tablet 10 2.95
Rekvina Pharmaceuticals Dispar kid 500 mg tablet 10 2.83
Macleods Pharmaceuticals Pvt. Ltd. Macfast 500 mg tablet 10 2.83
Veritaz Healthcare Ltd. Fepanil 500 mg tablet 10 2.76
Exotic Laboratories Pvt. Ltd. Eboo 500 mg tablet 10 2.2
Cipla Ltd. Paracip 500 mg tablet 10 1.5
Apex Laboratories Ltd. P 500 mg tablet 15 1.46
Ipca Laboratories Pvt. Ltd. Pacimol 500 mg tablet 15 1.25
Indoco Remedies Ltd. Febrex 500 mg tablet 15 1.18
Vanguard Therapeutics Pvt. Ltd. Tyfy 500 mg tablet 10 1.14
Jagsonpal Pharmaceuticals Ltd. Paracetamol-Jag 500 mg tablet 1.08
Total 360.73
8.4 Estimating the Overcharged Amount Under 2013 DPCO 207
of the list is the well-publicized case of GSK’s Crocin Advance, which violated the
DPCO and unilaterally claimed an exemption from price ceiling for 5 years on its
Paracetamol tablet because it had a fast-release feature. Naturally, the claim was
rejected, and GSK was asked to comply with the price regulation. According to the
PharmaTrac data, GSK charged Rs. 30 for Crocin Advance SKU with 15 tablets
between June 2013 and June 2014, when it should have charged a maximum of
Rs. 14.1 or lower. GSK reduced the price from Rs. 30 to Rs. 29.76 during July and
August 2014. In September 2014 GSK reduced the price to Rs. 15.72 while the
actual ceiling price should have been Rs. 15. News reports in April 2014 suggested
that it would price at Rs. 14.84 (Nautiyal 2014). GSK later increased the price to
Rs. 16.36 in October 2015 and lowered it to Rs. 15.91 in June 2016. We estimate the
total overcharged amount by GSK for “Crocin advance 500 mg tablet 15” SKU to be
Rs. 130.54 million. Similarly, the overcharged amount for “Calpol 500 mg tablet 15”
SKU, also manufactured by GSK, is estimated to be Rs. 114.05 million. There are
25 other SKUs with more than Rs. 1 million in illegal overcharging. Overall, the
overcharged amount for Paracetamol 500 mg Tablet SKUs alone is estimated to be
Rs. 369.53 million.
According to the NPPA’s detailed statement of overcharging up to February
2017, GSK overcharged Rs. 5399.37 lakhs or Rs. 53.99 million on Crocin Advance
tablets. Yet our estimates show that the overcharged amount until July 2016 is
more than twice the amount recovered by the NPPA. Also, the NPPA has not
identified any overcharged amount for GSK’s other significant SKU of Paracetamol,
Calpol, although our estimates show that the overcharged amount is as high as
Rs. 114 million.
8.4.2 Estimation of Overcharging for all Medicines

in the 2013 DPCO
We follow a similar approach to estimate the overcharged amount and find that there
are 200 firms with at least Rs. 1 million and 104 firms with at least Rs. 10 million
in overcharges. The list of 51 firms with at least Rs. 100 million is presented in
Table 8.3. Sanofi tops the list with an overcharged amount of Rs. 3.5987 billion. It is
not surprising to find Sanofi at the top of the list as prior market research and
newspaper reports suggested that Sanofi would be hit the hardest due to price
controls (Gokhale 2014):
Paris-based Sanofi’s Indian business is worst hit based on maximum retail prices and would
have lost 1.39 billion rupees ($23.1 million) of sales in the past year under the curbs, market
researcher AIOCD AWACS estimates.
It is clear from our estimates that, over the past 3 years, Sanofi did not fully
comply with the 2013 DPCO and continued to charge prices above the ceiling price.
It does not surprise us that Cipla is the second on the list with Rs. 3.471 billion in an
illegal collection as Cipla already has outstanding notices for Rs. 1.768 billion under
Table 8.3 Overcharging above Rs. 100 million by pharmaceutical firms under the 2013 DPCO,
during Jan 2011–Jul 2016
Pharmaceutical firm Overcharging (Rs. Million)
Sanofi India Ltd. 3598.7
Cipla Ltd. 3471.55
Glaxosmithkline Pharmaceuticals Ltd. 2919.93
Zydus Cadila 2378.99
Pfizer Ltd. 2145.71
Ranbaxy Laboratories Ltd. 2083.35
Dr. Reddys Laboratories Ltd. 1364.54
Bharat Serums & Vaccines Ltd. 1333.5
Abbott Healthcare Pvt. Ltd. 1286.72
Micro Labs Ltd. 1277.18
Novartis India Ltd. 1245.69
Alkem Laboratories Ltd. 1010.07
Lupin Ltd. 903.29
Sun Pharma Laboratories Ltd. 895.99
Intas Pharmaceuticals Ltd. 868.13
Emcure Pharmaceuticals Ltd. 744.96
Jb Chemicals 661.05
Panacea Biotec Ltd. 644.07
Torrent Pharmaceuticals Ltd. 610.7
Ipca Laboratories Pvt. Ltd. 516.37
Wockhardt Ltd. 460.76
Alembic Ltd. 392.7
Cadila Pharmaceuticals Ltd. 390.98
Macleods Pharmaceuticals Pvt. Ltd. 326.45
Usv Ltd. 319.36
Unichem Laboratories Ltd. 306.59
Zuventus Healthcare Ltd. 300.48
Troikaa Pharmaceuticals Ltd. 275.93
Abbott India Ltd. 261.27
Rpg Life Sciences Ltd. 228.91
Hegde & Hegde 226.46
Franco Indian Pharmaceuticals Pvt. Ltd. 225.31
Glenmark Pharmaceuticals Ltd. 220.43
Apex Laboratories Ltd. 215.67
Allergan India Ltd. 190.2
Serum Institute of India Ltd. 184.67
Win-Medicare Pvt. Ltd. 181.88
Biocon Ltd. 181.13
Fdc Ltd. 176.05
Mankind Pharmaceuticals Ltd. 159.45
Indoco Remedies Ltd. 156.4
Natco Pharma Ltd. 136.12
(continued)
8.5 Enforcement Activity by the NPPA for 1995 and 2013 DPCO 209

Pharmaceutical firm Overcharging (Rs. Million)
Corona 129.97
Blue Cross Laboratories Ltd. 128.67
Samarth Life Sciences Pvt. Ltd. 122.91
Akumentis Healthcare Ltd. 122.11
Shield Pharmaceuticals 118.63
Biochem Pharmaceutical Inds 110.53
Janssen 108.99
Tablets India Ltd. 104.41
Astrazeneca Pharma India Ltd. 100.38
Total 36,524.29
the 1995 DPCO, or nearly 3.5% of the total fines imposed under the 1995 DPCO
(Business Line 2016). The total amount of overcharging among all firms in our
dataset is estimated to be Rs. 39.619 billion after excluding SKUs with large packs
and SKUs where the maximum retail price is not more than ten times the price to the
retailer. The estimate is slightly larger at Rs. 43.938 billion without these exclusions.
Some critics of the procedure point to the presence of local taxes, which we have not
incorporated in our estimates. While it is true that some local bodies impose one or
2% local taxes on medicines, the medicine packs state that the maximum retail price
is inclusive of all taxes. Nonetheless, if we allow for a generous 5% on local taxes,
we find that the estimate for the overcharged amount is Rs. 31.451 billion with the
exclusion of large packs and cases where maximum retail price is more than ten
times the price to the retailer and Rs. 34.639 billion without such exclusions.
8.5 Enforcement Activity by the NPPA for 1995

and 2013 DPCO
The NPPA has begun enforcement activities under the 2013 DPCO and sent two
notices in 2013, 39 in 2014, 104 in 2015, and 21 until the end of June 2016. We
examine NPPA’s enforcement strategy based on these activities. We found that
among the pharmaceutical firms that were sent notices under 2013 DPCO,
40 firms were not matched to any of the 919 firms in the Pharmatrac dataset,
indicating that these are relatively small firms. We present the list of these firms in
Table 8.4. While a targeted approach to enforcement would call for focusing on large
firms with a prior history of violations, the limited resources of NPPA seem to be
directed toward small firms, considered too small even to be included in the
Pharmatrac dataset. We also examine the 47 SKUs, shown in Table 8.4, which
matched those in the Pharmatrac data. We find that the total overcharging in these
SKUs to be Rs. 0.735 billion during June 2013 and July 2016, slightly higher than
the NPPA’s estimate of Rs. 0.627 billion. However, we found that 30 of the 47 SKUs
Table 8.4 The market shares of selected SKUs facing enforcement under the 2013 DPCO
SKU reported as subject of enforcement Market share Overcharge (Rs. Million)
Ambistryn S 0.75 gm injection 1 3.53 17.77
Ambistryn S 1 gm injection 1 0.33 0.14
Andial 2 mg tablet 10 5.86 3.09
Atocor 10 mg tablet 10 0.13 43.68
Atorsave 10 mg tablet 10 0.06 13.03
Auxime 200 mg tablet 10 0 0.5
Aziclass 250 mg tablet 6 0.01 0.65
Calaptin 80 mg tablet 10 4.35 7.7
Cetfast 10 mg tablet 10 0 0.01
Cetfast 5 mg syrup 30 ml 0 0.01
Chlorocol eye 0.1% ointment 3 gm 2.69 1.18
Ciprolet ds 500 mg tablet 10 0.03 4.05
Crocin advance 500 mg tablet 15 0.4 130.54
Diapill D3 60,000 Iu tablet 4 0.01 0.02
Domperi 1 mg suspension 30 ml 0.06 0.34
Enoxsave 40 mg injection 0.4 ml 0.01 9.2
Eradiclav 500/125 mg tablet 6 0 0.09
Eradiclav duo 500/125 mg tablet 6 0 0.01
Fever X 500 mg tablet 10 0 0.07
Floxip 250 mg tablet 10 0.01 1.18
Floxip 500 mg tablet 10 0.01 3.65
Gardenal 60 mg tablet 20 1.33 36.55
Gardenal 60 mg tablet 30 2.63 36.96
Genticyn 0.3% eye drops 10 ml 5.56 1.99
Glyciphage 500 mg tablet Sr 10 0.45 193.73
Hcqs 200 mg tablet 10 1.76 85.92
Heksi 2 mg tablet 10 0.02 1
Homide 2% eye drops 5 ml 2.68 10.49
Inderal 10 mg tablet 10 1.6 19.09
Mazetol 100 mg tablet 10 0.68 0.42
Mixtard human 30/70 40 Iu injection 10 ml 17.81 46.87
Moxipil 250 mg tablet Dt 10 0 0.07
Neorof 1% injection 10 ml 0.58 8.67
Neorof 1% injection 20 ml 0.87 14.99
Oflavid 200 mg tablet 10 0 0.15
Pedimite 5% cream 30 gm 0.02 0.08
Perinorm 10 mg tablet 10 2.04 17.15
Perinorm 10 mg tablet md 10 3.23 1.61
Perinorm 5 mg drops 30 ml 2.35 4.9
Perinorm 5 mg syrup 30 ml 2.11 4.68
(continued)

SKU reported as subject of enforcement Market share Overcharge (Rs. Million)
R Mox cv 500/125 mg tablet 6 0 0.01
Sarotena 25 mg tablet 10 0.11 1.9
Triben 1% cream 20 gm 0.73 0.08
Vpl 2.5 mg injection 2 ml 4.55 0.07
have a market share of less than 1% and the average market share to be 1.5%,
indicating that the NPPA is likely targeting small violations. We find that the
absolute amount of overcharges is more than 44 times larger than what is identified
by the regulator. Collecting overcharges is challenging because of considerable
delays in the judicial process. However, if collected, the fines can be used to provide
free medicine to much of India’s population—if not all—given the budget for
providing free medicines for a large state like Karnataka is Rs. 0.3 billion per year.
One may argue that weak enforcement by the NPPA must be understood in the
context of a strict statutory standard the NPPA imposed. That is, the pharmaceutical
firms violating the ceiling price may argue that the ceiling price is set at levels
impossible for them to comply with profitably. The flaw with this argument is that
prior work shows that pharmaceutical firms, particularly those with more than 1%
market share, coordinated to inflate the ceiling price just before the implementation
of the 2013 DPCO, resulting in a weak statutory standard at the beginning of the
2013 DPCO.
Overall, the enforcement activity has been characterized not only by the NPPA’s
low estimates of overcharging by the pharmaceutical firms but also the limited
recovery of these overcharged amounts. We report in Table 8.5 the number and
status of cases of overcharging under the 1995 DPCO since its inception until the
end of February 2017. The percentage of the overcharged amount recovered is
15 between August 1997 and March 2009. We report the number and status of
cases of overcharging under the 2013 DPCO in Table 8.6. According to the NPPA,
the total amount recovered from the pharmaceutical companies is only 13.34% of the
claims made by the NPPA. As we discussed in the previous section, the NPPA
appears to have substantially underestimated the overcharged amount in the first
place. Next, we report in Table 8.7 the outstanding amount various pharmaceutical
companies owe to the NPPA under the 1995 DPCO. We also reported in Table 8.8
both the overcharged and the outstanding amounts owed to the NPPA under the
2013 DPCO.
The All India Chemists and Druggists Federation (AICDF), a competing and
relatively small union of retailers compared to the AIOCD, has recently sent letters
to the NPPA alleging that the pharmaceutical companies are continuing to violating
212
Table 8.5 The status of cases of overcharging under DPCO 1995 since inception until 28.02.2017
Aug 1997– 2009– 2010– 2011– 2012– 2013– 2014– 2015– 2016–
Particulars Mar 2009 2010 2011 2012 2013 2014 2015 2016 2017
DPCO 1995 1995 1995 1995 1995 1995 1995 1995 1995
Number of cases 653 87 42 40 103 88 90 160 24
Overcharged demanded amount including interest 2645.87 71.23 107.11 60.81 129.22 415.9 526.06 907.49 93.17
Total amount realized during the year 156.04 35.91 17.26 10.69 14.97 40.06 34.37 7.59 220.36
Total amount realized against the demands for the 401.71 23.8 20.35 8.88 10.36 55.3 11.92 4.89 0.04
year
Percentage of the amount realized against the 15.18 33.41 19.00 14.60 8.02 13.30 2.27 0.54 0.04
demand for the year (%)
Amount outstanding 2244.16 47.43 86.76 51.93 118.86 360.6 514.14 902.6 93.13
Source: NPPA (http://www.nppaindia.nic.in/order/stmt-14-03-2017.pdf)
8 Enforcement and Compliance with Price Ceilings on Essential Medicines
Table 8.6 The status of cases of overcharging under DPCO 2013 since inception until 28.02.2017
2013– 2014– 2015– 2016– Cumulative
Particulars 2014 2015 2016 2017 total
DPCO 2013 2013 2013 2013 1995 &
2013
Number of cases 2 39 103 96 1527
Overcharged demanded amount including 0 53.99 20.47 7.43 5038.72
interest
Total amount realized during the year 0.02 55.8 4.73 74.48 672.28
Total amount realized against the demands 0.04 55.96 8.14 70.89 672.28
for the year
Percentage of the amount realized against 0.00 103.70 39.77 954.10 13.34
the demand for the year (%)
Amount outstanding 0.04 1.97 12.33 63.46 4366.44
Source: NPPA (http://www.nppaindia.nic.in/order/stmt-14-03-2017.pdf)
the ceiling prices imposed under the 2013 DPCO, and that the state drug regulators
in West Bengal are ignoring such violations (Kunnathoor 2017):
In a letter sent to the office of the national price regulator, Joydeep Sarkar, general secretary
of AICDF has said that the law violating companies are not concerned about the regulatory
body in the state. Despite so many complaints made against them by the law abiding
wholesale traders, the manufacturers are continuing their unlawful activities. They are
denying supplying life-saving medicines to the legitimate wholesalers.
One of the main challenges in enforcing the ceiling prices under 2013 DPCO lies
in establishing the violations in a court of law. Yet the government has faced
considerable difficulty in collecting data to determine the ceiling price. As we
discussed in Chap. 5, the IMS and Pharmatrac data often provide different estimates
of market shares and prices. As a result, relying on them for enforcement can lead to
legal disputes. The NPPA has attempted to collect data directly from pharmaceutical
companies. However, only 90 companies complied with the request for data and
several companies failed to register and self-report data on prices and sales to the
NPPA’s Integrated Pharmaceutical Database Management System (Shankar 2014a).
The effort to compile the database remains unfinished 2 years later despite repeated
requests and extended deadlines since September 2014, when it was first announced
(Shankar 2014b; Shankar 2016a, b).
As Francis (2016a, b) notes, the NPPA decided to set up Price Monitoring and
Resource Units in seven states, Gujarat, Maharashtra, Odisha, Haryana, Kerala,
Assam, and Manipur, to improve compliance with the DPCO. However, the pro-
posed investment per state is Rs. 4–5 lakh, indicating the lack of resources and
commitment to enforcement. Francis (2016a, b) notes that the NPPA does not have
an effective network of inspectors in states to monitor price violations and the NPPA
has not received cooperation from the state drug control administrations. Francis
(2016a, b) summarizes the difficult facing the NPPA:
Table 8.7 Noncompliance with the 1995 DPCO
214
Outstanding amount in N of
Company name Rs. hundred thousands cases Medicine formulations where violations occurred
Cipla Ltd. 246,991 26 Ciprofloxacin; D-Fylin tab; Mebex plus tabs; Doxycycline;
Duolin Rotacaps; Norflox based formulations; Asthalin 4 mg tabs;
Duolin Rotacaps; Ciplox 500 mg tab; Asthalin SA 8 mg tab;
salbutamol.; Ciprofloxacin based formulation; Aerocort Forte
Rotacaps; Ciplox-TZ; Norfloxacin based formulation; Tetracy-
cline 500 and 250; Salbutamol based formulation; Cloxacillin
based formulation; Furazole-M tab; Norfloxacin based formula-
tion; Ciplox E/E Drops; Erycin 500 tabs; Burnheal Cream; Ciplox
100 ml vial/Bottle; Duolin Inhaler; Maxirich caps
Johnson & Johnson Pvt. Ltd. 65799.56 6 Benadryl cough syrup 450 ml; Benadryl cough syrup 50 ml;
Raricap tablets; Pedia 3 liquid; Raricap tablets; Benadryl cough
syrup 150 ml
Okasa Pharma Ltd. 28735.38 13 Norfloxacin based addl demand; Ciplox D eye ointment; Cefadur;
Betasalic ointment; Fourderm cream; Predone Forte; Ibugesic plus
tab; Cloxacillin based formulations; Nutrolin B syrup; Cefadroxyl
based formulations; Norflox TZ tabs; theophylline based formu-
lations; Dytor plus 20 tab
Claris Life Science Ltd 10407.1 1 I V Fluid
Ranbaxy Labs Ltd 7734.84 8 Suprimox-P tabs; Cloxacillin based formulations; Norfloxacin
based formulations; Ciprofloxacin; Cefazoline Sodium;
Norfloxacin based formulations; Suprimox caps; Cloxacillin
based formulations
Rexcin Pharmaceuticals Ltd. 7045.41 10 Diprovate-N 17 gm Creram; Diprovate plus Lotion 50 ml;
Diprovate G plus 15 gm; Diprovate-S plus cream 15 gm;
Diprovate S plus 20 gm; Diprovate plus cream 15 gm; Diprovate
Lotion 50 ml; Diprovate plus 20 gm; Diprovate G plus 20 gm;
Statum plus cream
Macleods Ltd. 6518.43 1 Doxoril 400 tab
Cheminova Pharmaceuticals/Cipla Ltd. 6045.5 1 Powergyl suspension 30 ml
Mars Therapheuticas 5276.23 3 Synsama tabs 15’s pack; Bicil P; Synsama syrup
Swiss Garnier/Lupin 3619.91 1 Doxiflon
Baxter India Pvt. Ltd. 3551.72 3 Metrodazole; Dns/NS 500 ml; IV Fluid
Astalife/Usv Ltd. 3423.32 2 Doxy 1 LDR Forte; Ecosprin gold 20 forte caps
Tridoss Labs Pvt. Ltd. 2844.16 3 Aceten 25 mg; Captopril/Acetan; Phylobid tab SR
Franco Indian 2767.06 4 Benalgis; Surfaz-SN cream 7 gm * 1; native C 200; Native C 400
Cipla/Alchon 2437.9 1 Ciprofloxacin Inj.
Ipca Labs Ltd. Mumbai 2365.41 2 Ciprofloxacin based formulations; Lariago DS tablet
Dr Reddy’S 2307.96 6 Gris OD 375; Bio-E; Becozinc caps; Norfloxacin; Ciprofloxacin
based formulation; Cloxacillin based formulation
Cadila Healthcare Ltd. 2256.91 17 Ofrex-M plus; Gertac; Gexofen; Deriphylline OD 300 & 450;
Zydril Expectorant; Zygenta 20 ml Inj.; Deriphylin 300;
Ciprofloxcin ciprobid 500; Cefadroxil; Gilpimet; Deriphyllin 450;
Rimpazid kid tabs.; Megalox; Quadridus 5 gm; Citimed; Nortee
400 LB; Ciprobid 250 mg
Best Lab Pvt. Ltd. 2041.86 3 Riconia film coated tabs; Riconia film; Caserra
Mmc Healthcare 1931.07 1 Medineuron tabs
Indswift Ltd./Alliance Biotech 1922.95 1 Amibex TZ tabs
Star drugs 1874.14 1 Nervijan Inj.
8.5 Enforcement Activity by the NPPA for 1995 and 2013 DPCO
Glenmark Pharmaceuticals 1862.27 2 E Cap-400 (Vitamin E Acetate 400 mg caps.); Doxovent tabs
Modi Mundi/T C Healthcare 1720.46 2 Unicortin CR-400; Unicortin CR-600
Universal Pharmaceuticals Ltd 1699.22 3 LCF cough formula; Analgin tabs. 10’s; Emvit cap
Mars Therapheuticas/Dr. Reddy 1641.81 1 Doxobid tab
Usv Ltd. 1624.7 4 Glynase XL-5; Doxy-I (DPCO’87); Ecosprin AV 75; Pioz
Kopran Ltd. 1307.43 5 Cloxacillin based formulations; Norfloxacin based formulations;
Salbutamol based formulations; Vent syrup; Cefadroxyl based
formulations
(continued)
215
216
Pharmed Ltd./Mmc Healthcare 1205.92 1 Cartigen forte tab
Manish Pharmaceuticals 1182.71 3 Benadryl cough syrup 100 ml; Salbutamol Sulphate;
Ceradrish 500
Laborate Pharmaceticals India Ltd. 1160.5 46 festive-D; Doxylab caps; MP-4 tab; Clear & Clean Cream; Doxy
tab; Memory plus syrup 200 ml; Ceflox CF cream; Elthrocin-
250 mg tab; Deco E/E Drops; LB Drox 250; Festive-M Suspen-
sion; Valerate-N; Ibuflam tablets; MP-16 tab; Cipdec E/E Drops;
Lantac Inj.; Gentacord-D E/E Drops; Gentacort-MF cream;
Cefadroxyl dry syrup 30 ml bottle; Dexalab Inj.; Norbin Oral
susp.; Ceflox suspension,; Maligo-250 mg tabs; Doxylab capsule;
Povirex plus ointment; Labizone; Nflox-TZ tab; N-TZ tabs;
Betamox plus capsules; Ceflox D E/E Drops; Ceflox E/E drop;
Ceflox E/E drop; LB Drox 500 tabs; Mediclox plus cap; Valerate
‘C’ skin cream 20 gm; Ceflox TZ tab; Nflox-B 400; Lantac Inj.
and Betamox plus caps.; Gentalab Inj.; Sivez cream 20 gm;
Gentalab E/E Drops; Quard cream 15 gm; Nflox E/E Drops;
Quard cream; Norlab-TZ tab; Silvez plus cream
Lyka Labs Ltd. 1151.38 2 Cloxacillin based formulations; Lydin tabs.
Tristar Formulation P Ltd. 1020.09 2 Ecospin AV; Ecosprin gold
Rexin Pharmaceutical 891.95 1 Silverex cream 24 gm
Cipla/golden cross 862.43 1 Ibugesic plus suspension
Meridan enterprises 858.02 1 Tedral SA
Fdc Ltd. 835.73 3 ZoxanTZ tab; Doxiba syrup; Doxiba tabs
Pfizer Ltd. 745.5 10 Becosules Z caps.; Oxytetracycline; Zipron 500 tab.; Depo
Medrol; Solu-Medrol 1000 mg AOV 8 ml; Becosules caps;
Medrol 4 mg tab/Solumedrol 500 mg 4 ml aov/Solumedrol
1000 mg 8 ml AO > V; Benadryl syrup; Caladryl lotion;
Becosules caps
Oscar Labs 695.16 1 Gramogyl/Gramoneg
Bdh Industries 648.12 1 Keralgo tab
Cadila Healthcare Ltd./German Remedies 559.87 1 Doxolin tab
Torque Pharmaceuticals 526.47 11 Glycort E/E Drops; Gencin B E/E Drops; Ticin suspension 60 ml;
Gencin E/E Drops; Cipromac E/E Drops; Norgyl suspension;
Bedex Forte; Doxymac caps; Cold go suspension; Cipromac caps;
Cipromac D E/E Drops
Innova Cap Tab/Manish Pharma 464.12 1 Duoflam kid tab
Maneesh Pharmaceuticals Pvt. Ltd. 442.11 6 Elferri tonic; SCC-JR tabs; Sigma CT tabs; SCC-2 LW tabs;
Sigma CTH tabs; SCC-2 tabs
Wyeth Ltd. 438.42 2 Prednisolone; Wymesone Inj. 2 ml Vial
Bestochem Formulaiton (I) Ltd. 432.32 2 Betawin-S and Betawin forte tab. 10’s each; Doran-O tab,
Doran-O Inj
Cadila Pharmaceuticals Ltd. 429.3 5 Ciprofloxacin based formulations; Envas 5; Cloxacillin based
formulations; Ciprofloxacin; Envas 2.5
Saichem Pharma/Pharmed Ltd. 417.34 1 Citravite-Z
Sol Pharma 404.13 2 Ciprofloxacin based formulation; Theophylline based
formulations (Theolong)
Gland Pharma 400.41 1 Huminsulin 30/70 Inj.
Vapi Care Pharma P Ltd./Bombay Tablet 397.08 1 LAA tab.
Mfg Company
Martin & Harris Ltd. 393 1 Venusmin
Noel Pharma 357.52 9 Iclox Welfen & Welfen M; Vitatop tabs; Megadine-M Oint;
Zenfer caps; Betaphil-T tab; Megadine-M Oint; Megatac tab;;
Inor—400
Indswift Ltd. 314.18 7 Neurobex-SG; Cetin plus suspension; Provita, neurovit;
Doxycycline; Swiflox; a) Stemin tab 0.5 mg.; Swiflox E/E Drops
Allergan India Pvt. Ltd. 307.91 2 Acetate; V-Ret plus
Ipca Labs 296.74 2 Norfloxacin based formulations; Normax-TZ
217
(continued)
218
Espi Chemicals 280.54 1 Rediplox
Biochem Pharmaceuticals Ind Ltd. 278.24 2 Amplox 250 mg Caps & Amplox LB cap; Mplox-C Vial 500 mg
Tuton Pharma 258.88 1 Tresmox LB
Saar Biotech/Biochem Pharmaceuticals 253.63 1 Clobet GM cream
Shimal Investment and Trading Company 247.84 1 Gramoneg/Gramogyl formulations
(Ranbaxy)
Kemwell Pvt. Ltd. 241.8 2 Ventrorlin Exp./Sry.; Ventorlin expect.
Avis Life Sciences/Morepen 239.51 1 Norpen-TZ
Lark Labs (I) Ltd. 235.39 3 Infa-V; Livogard 60 ml; Ciprolar -FC 15 gm cream
Softesule Pvt. Ltd. & Alembac Ltd. 223.47 1 Farisis cap
Concept Pharmaceuticals Ltd. 198.27 6 Synabron tab; Anabest; Coprime DS; Ibucon plus suspension;
Ibucon 400 plus; Synabron expectorant 100 ml
Cipla Ltd./Curetech Skincare 196.22 1 Burnheal cream 15 gm
Wanbury/Creative Healthcare 190.58 1 SET Cal Mom
Gmbell Healthcare/Universal 175.56 1 Clobed GM cream
Lifesciences
Ak Labs 159.92 1 Doxicip 100 mg tab
Nicholas Piramal (I) Ltd. 159 3 Tetracycline 500 mg tabs; Quinobact eye drop & tabs; Norfloxacin
based formulation
Sresan Pharmaceuticals 158.09 2 Respolite S syrup; Respolite ST syrup
Arvind Remedies Ltd. 152.92 4 Vitoxid AO; Racy 500 tabs; Cetafen; Crolox tabs
Shreya Lifesciences 145.51 2 Monto 4 tabs; Aspisol tabs
Somatico Labs Ltd 144.62 1 Somadox DT caps
Softech Pharma Pvt. Ltd./Dr. Reddy 140.65 1 Ovista caps.
Ajanta Pharma 134.49 1 Gate-PD E/E Drops
Lupin Ltd. 131.59 2 Tonact ASP 75; Odoxil 250 DT tabs
Palson Derma Pvt. Ltd. 116.61 1 Kensol-B 10 gm
Vapi Care Pharma Ltd./Tridoss Labora- 115.54 1 Phylobid-300 CR
tories Pvt. Ltd.
Ankur Drugs & Pharmaceuticals 106.2 1 Cipract TZ tabs
Themis Medicare Ltd. 104.49 1 Tetra Cox tabs
Source: NPPA (http://www.nppaindia.nic.in/order/stmt-30-6-2016.html)
Partial list of companies with an outstanding balance of more than 10 million rupees with the NPPA
219
Table 8.8 Noncompliance under the 2013 DPCO
220
Overcharged amount in Outstanding amount in N of

Company Rs. hundred thousand Rs. hundred thousand cases Medicine formulation
Biological E Ltd. 3328.03 2496.03 1 Bett Tetanus Vaccine
Franco Indian Pharmaceuticals 896.41 896.41 1 Glyciphage SR 500 mg
Pvt. Ltd.
Reliance Life Science 410.35 410.35 1 Albural-LS
Akumentis Healthcare 372.32 372.32 1 Bonheal 500 mg, Clomipure 50 mg, Goodova 50 mg &
Clomipure 100 mg caps
Abbott Healthcare Ltd. 474.03 364.19 17 Phenergan 100 ml syrup; Floxip 500 mg; Bactrim syrup 50 ml;
Becomex Forte BZ caps; Bactrim DS; Mazetol 100 mg tabs;
Neo Mercazole tab; Autrima-DS tabs; Supradyn tabs; Floxip
250 mg; Inderal-10 tab; Gardenal 60 tabs; Ambistryn S
0.75 gm; Calaptin 80 mg tabs; Becozim C Forte; Genticyn
80 mg 2 ml Inj.; Genticyn 10 mg/ml & Pediatrics Inj.
Ipca Labs Ltd. 285.03 285.03 3 Domperi 1 mg/ml suspension 30 ml bottle; HCQS 200 mg tab;
Perinorm syrup 30 ml
Neon Laboratories Ltd. 289.09 281.59 1 Neorof Inj.
Encube Ethicals/Golderma 201.75 201.75 1 Pernite cream
India
Tidal Labs Pvt. Ltd. 100.82 100.82 1 Enzox plus tabs
Cambridge Healthcare Ltd./ 97.71 97.71 1 Ispaghula Granules & Naturolox powder
Oxeganon India Pvt. Ltd.
Allergan India Pvt. Ltd. 74.12 74.12 1 Albucid 20% eye drops
Cosmo Farma Laboratories 63.75 63.75 1 Reglan tabs
Ltd.
Kivi Labs Ltd 58.14 58.14 3 Kimtrip tab; Kipnel 40 mg, Epigold 300 mg & Tracogold
100 mg; Hekri 2 & Vetodepder
Indoco Remedies 54.69 54.69 1 Homide eye drop
Torrent Pharmaceuticals 53.77 53.77 1 Azalin 4 tabs
Hll Lifecare 36.55 36.55 3 Novex DS tabs; Moods Choco; Moods Xtary
Panacea Biotech 30.15 30.15 1 Glizid 40 tabs
Scott Edil Pharmacia 31.71 26.27 6 Dexadran; Dulax tabs; Methiphar; Novamention Inj.; Aziphar
suspension; Cifbax 250 tabs
Gracure Pharmaceuticals/ 24.38 24.27 2 Zolbend tabs; Memopen tabs
Pharma Concepts
Seagull Laboratories Pvt. Ltd. 28.41 19.41 1 Capex expectorant
Dr Reddy’S Labs Ltd. 27.99 19.36 4 Atocor 5 mg; Atocor 10 mg; Ciprolet DS tabs; Aticore 20 mg
Allergan India/Piramal 14.59 14.59 1 Albucid 20% eye drops
Healthcare
Shiva Pharmaceuticals 13.56 13.56 1 TLM-H tabs
Amanta Healthcare Ltd. 13.29 13.29 1 Sodium Choloride (0.9% w/v) Inj.
Jawa Pharmaceuticals (India) 11.06 10.3 1 Chlorocol ointment
Pvt. Ltd.
Nivca Life Care/Relef Biotech 8.71 8.71 2 Nivox 250 caps; Omzec-D caps
Pvt. Ltd.
Synchem Laboratories Ltd. 7.63 7.63 1 Tussin DMR tabs
Sizin Flora Pharma/Eris 23.7 6.61 1 Atorsave 10 tabs
Aishwarya Healthcare 6.09 6.09 1 Sodium Choloride infusion 100 ml
Reliance Formulation (P) Ltd. 5.35 5.35 1 R-mox CV 500/125 mg tab
Nulife Pharmaceuticals 4.85 4.85 1 Gamascab & Nulox lotion

Dales Laboraroties Pvt. Ltd. 30.08 4.7 1 Sinus 77 tabs
Simson & Brown 4.23 4.23 1 Spasmol tabs
Veritaz Healthcare 8.889999 2.7 2 Andial 2 mg; RXMEF Susp. & Zondal tab
Laborate Pharmaceuticals 2.46 2.46 1 Labmox-250
India Ltd.
Selab India 9.58 2.37 1 Glycerine 60 mg
Saket City Hospital 2.29 2.23 1 Evatocin, Phenergan, Reokay & Certofix Trio Inj.
221
(continued)
222

Scott Edil Pharmacia/Interphar 1.59 1.59 1 Patrova 40 mg
Sky Map /Elder 1.49 1.49 1 Cetfast
Pharmaceuticals
Sterrkem Pharma 1.08 1.08 1 Genster Inj.
Votary Laboratories 0.91 0.91 1 Softner Susp. 200 ml
Vanugard Therapeuticals 3.29 0.64 1 Neurogard tabs
Psychotropics India Ltd. 0.54 0.54 1 Moxipil 250 mg tab
Msn Laboratories 38.26 0.18 2 Floxsafe 100 ml; Cefight CV 325 mg tabs, Vitasafe tabs &
PAH 20 mg tabs
Lupin Ltd. 2.11 0.16 1 Timoblu 0.5 eye drop
Prexair India Pvt. Ltd. 63.64 0.16 1 Mox Nitrous Oxcide
Combiotic Global Caplet Pvt. 1.42 0.16 2 Grisonex tabs; Grisonex tabs
Ltd.
Morepen Laboratories Ltd. 4.32 0.12 3 Metopen 10 tabs; Fever-X tabs; Eradiclav 500 & 125 mg tab
Palmer Labs/Talent Healthcare 0.3 0.08 1 Povicream ointment
Apex Laboratories 25.91 0.02 6 Zincoderm; Lozee cream; Ark spray 100; Aziclass 250 tabs;
Lozee-M cream; P-125 Susp. 60 ml
Baxter India Pvt. Ltd. 2.58 0.01 1 Dextrose Inj.
Crescent Formulations Pvt. 1.42 0.01 2 Olatin plus tabs; Ambidex 20 mg tabs, Alpaz 2 tab,
Ltd. Divalex OD 125 tab & Pregacent 75 tab
Icpa Health Products Ltd. 0.85 0 1 Xicaine Inj.
Vasco Drugs Labs 1.75 0 1 Glycrin 25 gm
Shankus Acme Pharma Pvt. 0.37 0 1 Zylid 500 tabs
Ltd.
Menarini India Pvt. Ltd. 83.16 0 1 Cetrilate Adult Soap & Etan-GM cream
Fulford (India) Ltd. 1.07 0 1 Polaramine Syr.
An Pharmacia 0.47 0 1 Nortrip 25 mg tabs
Axa Parentrals Ltd. 19.97 0 5 NS 100 ml; DNS Inj. 500 ml; 5D Inj. 500 ml; NS Inj. 500 ml;
Axagyl Inj. 500 mg
Elite Pharma Pvt. Ltd. 0.14 0 1 Magrelite tabs
Jenburkt Pharmaceuticals 12.79 0 1 Triben skin cream
Tas Med (India) 1.18 0 2 Anglit 2.6 mg; Lotus 50 mg
Glasston Pharmaceuticals/Leo 0.08 0 1 Azelio suspension
Lesanto Laboratories 0.11 0 1 Lacitron syrup 100 ml
Biovitamins Pvt. Ltd. 1.17 0 1 Fanty XT tabs
Kinesis Pharmaceuticals 0.77 0 1 Abdifer caps
Entod Pharmaceuticals 7.04 0 1 Waxonil & Otobiotic ear drops
Gerrysum Pharmaceuticals/ 0.2 0 1 Geripen Inj.
Brooks Labs Ltd.
Ridley Lifescience Ltd. 0.07 0 1 Paluhit 400 tabs
Saipliss Drugs & Pharma/Max 0.36 0 1 Agifit 500 tabs
Lifesciences
Morepan Labs/Pharma 0.75 0 2 Foly-ACT; Cetipen-LO tabs
Concepts
Beekay Pharmaceuticals 0.05 0 1 Belenz-5 tab
Quasar Labs/Unistar Biotech 0.43 0 1 Zyopin MD 10 tabs
Profic Organic Ltd. 0.14 0 1 NP Com 500 tab

Eris Lifesciences 6.45 0 2 Enoxsare 40 mg Inj.; Superclop 75 tabs
Kayvee Aeropham Pvt. Ltd. 0.06 0 1 Povin solution
Nitin Life Sciences Ltd./ 28.28 0 2 Ambistryn-S 1 gm Inj.; Gentcyn 80 mg 2 ml Inj.
Abbott Healthcare
Novo Nordisk India Pvt. Ltd. 97.93 0 1 Mixtard 30 Flexpen, Insulatard Flexpen, Novorapid Penfill,
Novomix Penfill and Novofine Niddles
(continued)
223
224

Obsurge Biotech Ltd. 9.32 0 3 Venosuf caps; Ultracid suspension 100 ml; Kulfi 20 mg syrup
100 ml
Tosmed India Pvt. Ltd. 8.83 0 1 UDA 300 mg & Clotas 0.5 mg tabs
Samarth Lifesciences 0.02 0 1 VPL Inj.
Mega Healthcare 0.31 0 1 Itrataze caps
Serdia Pharmaceuticals India 20.01 0 1 Daflon 500
Pvt. Ltd.
Curatio Healthcare 0.34 0 1 Triodloc cream 25 gm & 20 gm and Atogla cream 100 gm
Satven & Mer 0.01 0 1 Alopm 100 mg tabs
Aurz Pharmaceuticals 0.27 0 1 Auxime-200
Ordain Healthcare Global Pvt. 8.22 0 2 Diapill tabs, Misonac SR Tabs & Complete TD tabs;
Ltd. Tribose M & MS tabs
Creative Healthcare/Sapat & 0.3 0 1 Ome Saplus caps
Company
Indchemie Health Spec Pvt. 4.33 0 1 DVeOK caps
Ltd.
Gag Pharmaceuticals 0.57 0 1 Atease 10 tabs
Leeford Healthcare Ltd. 2.13 0 1 Oflarid-200
Percos India Pvt. Ltd. 3.51 0 1 Protar K 100 ml
Source: NPPA (http://www.nppaindia.nic.in/order/stmt-30-6-2016.html)
References 225
NPPA has to collect a total sum of Rs.4551 crores from various pharmaceutical companies
up to February 2016 for overcharging of drugs from 1995 onwards when the earlier DPCO
was notified. In 2015-16 alone, NPPA issued demand notices to 263 companies for recovery
of Rs. 928.32 crores but could collect only Rs. 12 crores. There are no indications when the
NPPA will be able to recover such a huge sum of money. As the NPPA price violation cases
are fought in different courts and are in various stages of hearing, it looks difficult to recover
such a huge amount by the government from the drug companies even with the price
monitoring units in the states. After the notification of the new DPCO in 2013 covering
348 drugs, health ministry revised the National List of Essential Medicines in last December
raising the total number of drugs under DPCO to 384. With this, NPPA has a bigger task in
fixing and monitoring the additional number of drug prices. Now, the circumvention and
violation of the DPCO provisions have to be expected on a much bigger scale looking at the
track record of the pharmaceutical companies. Considering the fact that the litigations have
been going on with several companies for more than 20 years, it is futile to expect the
recovery of this amount will be possible under the existing judicial process. The Central
government needs to find some extra judicial option to recover these amounts.
Gujarat has enforced the DPCO regulations better than many other states, indi-
cating that the quality of state drug control administration plays an important role in
enforcement. In 2014 alone Gujarat’s regulator referred 629 cases of DPCO viola-
tions to the NPPA, as Shirodkar (2015) notes:
We have been training our inspectors on a regular basis as an ongoing effort on all the basics
of how to effectively calculate the prices of the medicines available in the market, compare
and check it with the notified prices and how to efficiently and timely report or refer all the
cases to the NPPA. All our efforts are targeted to ensure full compliance with the existing
laws such as Drugs & Cosmetics Act, the DPCO and others.
Overall, the extent of overpricing is substantial in some of the SKUs during the
2013–2016 period. We compiled in Appendix A1 the annual revisions to the ceiling
prices of various medicines and in Appendix A2, the MRP, PTR, the ceiling prices of
some of the SKUs with an MRP at least double the ceiling price. Targeting such
instances of significant violations of the ceiling price can prove to be an effective
enforcement strategy.
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Chapter 9
Conclusion
In this book, we attempted to examine the effectiveness of the design, implementa-

tion, and compliance with partial price control regulations on pharmaceuticals in
India. We presented anecdotal evidence to suggest the history of cost-based regula-
tion in this sector leading up to the 2013 DPCO had been ineffective. The govern-
ment spent nearly a decade from 2002 until 2012 to decide on the design of the
regulation. The new design deviated from the earlier design by relying on a market-
based mechanism for determining price ceilings and using the prices of firms with a
relatively larger market share. We find that the design of the regulation is ineffective.
In particular, the partial nature of the regulation and the exclusion of other dosages
of the same medicines as well as fixed-dose combinations of important substitute
medicines led to compensatory shifts in the demand and prices in unregulated
markets. We also find evidence to suggest that the implementation of the regulation
has been suboptimal. In particular, the regulator had limited access to reliable data on
the prices, which led to delays in fixing ceiling prices and disputes with the
pharmaceutical firms, which challenged the ceiling price orders in several cases.
The regulator has also compounded the problem by following at times what appears
to be inexplicable interpretations of simple formulae to determine the ceiling price.
The regulator’s efforts over the last 3–4 years to develop a database of prices and
market shares by requiring firms to submit such information received low levels
of cooperation from the industry. The enforcement of price control regulations in
India has been historically weak with the absence of built-in penalties to dissuade
pharmaceutical firms from for charging prices above the ceiling price, the regulator
identifying a small fraction of the potential ceiling price violations, and then
recovering only a small fraction of the overcharged amount successfully after
years of legal proceedings. We find that the pharmaceutical firms responded by
increasing prices before the implementation of the regulation, shifting the demand
away from the regulated to unregulated medicines, introducing more product vari-
eties of unregulated medicines, and increasing retailer incentives to push products
with higher margins. While in the short term the impending regulation increased
the prices of both regulated and unregulated medicines, in the medium term, the

230 9 Conclusion
weighted average prices of partially regulated medicines have not declined in

absolute terms. A major limitation of the current regulation is its inability to limit
exorbitant retail margins resulting from consumer prices that are several times higher
than the wholesale prices. While we find evidence to suggest that pharmaceutical
firms coordinated to undermine the effectiveness of the regulation, their trade
associations have also supported studies questioning the economic rationale for
pharmaceutical price regulations in India. It is also concerning that IMS has taken
up the task to evaluate the effectiveness of price control regulations despite its key
role in providing data for determining the ceiling price as well as the many questions
raised about the quality of its data.
One may be tempted to conclude from the sobering description of the deficiencies
of the current pharmaceutical price control regime in India that such regulations must
be eliminated altogether. We, however, argue that such a conclusion is problematic
for several reasons. First, regulation in this sector is an ongoing process, and it can be
improved based on the lessons learned over the last 4 years of implementation. There
is evidence to suggest that the regulator has been relatively more proactive in
identifying cases of overcharging as well as addressing issues arising from the
partial nature of regulation by expanding the scope and setting up monitoring of
prices for both regulated and unregulated medicines. The design of the regulation
can be improved by updating the National List of Essential Medicines once every
2 years as does the WHO and by expanding the ambit of regulation to include all
dosages of a medicine and their fixed dose combinations. Second, with each revision
of the price ceilings, the regulator can significantly improve the implementation and
enforcement activities. The regulator’s ability to extract cooperation from the state
administrators in monitoring and enforcement can also positively influence the
effectiveness of the regulation. Third, one can learn about the potential impacts of
eliminating regulations altogether by examining the pricing patterns in pharmaceu-
tical markets with little or no regulations. Until recently, medical devices represented
such pharmaceutical markets in India, as they were excluded from the 2013 price cap
regulation.
The efforts to bring stents, medical devices used to prevent heart attacks, provides
an excellent case for why price regulations become necessary. In July 2014, the
Maharashtra Food and Drug Administration informed the Drug Controller General
of India and the National Pharmaceutical Pricing Authority about the inexplicably
high consumer prices of stents relative to their wholesale prices (Nautiyal 2014a,
2015c). Stents, like other medical devices, were considered as drugs under the Drugs
and Cosmetics Act of 1940 but they were not regulated under the 2013 DPCO. The
Maharashtra FDA found that the manufacturers of stents were coordinating with the
importers, distributors, and hospitals to set arbitrarily high maximum resale prices
(MRP). For example, drug-eluting stents manufactured by Medtronic and imported
by India Medtronic, at Rs. 30,848 has an MRP of Rs. 162,000 printed on its package,
sold to a distributor named Bhalani Biomedicals at a price of Rs. 67,000, which the
distributor sold to Jaslok hospital at Rs. 106,050 (Nautiyal 2014a). The absence of
regulation led to a trade margin of 425% in drug-eluting stents. Nautiyal (2014a)
9 Conclusion 231
notes that in another case, stents manufactured by Abbott’s subsidiary in the

Netherlands and imported by the subsidiary in India at Rs. 40,710 had an MRP of
Rs. 150,000, resulting in a trade margin of 72%. The stents were sold to a distributor
named Sinocare at a price of Rs. 73,440, which sold it to P D Hinduja hospital at a
price of Rs. 113,400 and the patient paid a price of Rs. 119,070. Similarly, stents
manufactured by Cordis were imported by Johnson & Johnson at Rs. 45,115 with an
MRP of Rs. 135,000.
In response to the letter written by the Maharashtra FDA, the NPPA notified
device manufacturers that medical devices are classified under non-scheduled drug
category, that their prices are subject to monitoring and cannot be increased more
than 10% of MRP annually, and that pricing information must be supplied to the
NPPA using Form V (Nautiyal 2015a). The Maharashtra FDA suggested that five
categories of devices such as Neuro Coils, Cochlear Implants, Cardiac Stents, Ortho
Implants and Bone Cement can be brought under the NLEM and DPCO (Nautiyal
2015b, 2014c). The NPPA sent letters reminding the manufacturers to share their
pricing information once in 2015 and four times in 2016 and mandated the sharing of
information in 2017 after including stents under NLEM in 2016 (Shankar 2016,
2017a). The state of Karnataka joined monitoring of stent prices in 2017 (Vijay
2017), and the NPPA mandated the printing of MRP (Shankar 2017b). The NPPA
imposed a price ceiling on drug-eluting stents at Rs. 29,000 and on bare metal stents
at Rs. 7260 in February 2017. Francis (2017) summarizes the timeline of events
involving the pricing of stents:
Stents were included in the National List of Essential Medicines in July last year and were
added to the Schedule I of the DPCO 2013, in December, bringing these devices under price
control. Prior to that Union health ministry had accepted the recommendations of an expert
panel, set up to examine the issue of essentiality of coronary stents, and decided to include
this life saving product in the NLEM. The health ministry’s decision is subsequent to a Delhi
High Court direction to the government in February 2015 in response to a public interest
litigation seeking relief to lakhs of heart patients in the country. It was after the Court order,
the expert committee headed by Prof Y K Gupta was appointed to examine the essentiality
and excessive profiteering in coronary stents. The NPPA order is certainly going to be
opposed by the hospital managements and stent suppliers as this is the first step from the
government to regulate stent prices and bring down the profiteering in these life saving
products. Monitoring violation and circumvention of price fixing order by hospitals and stent
suppliers are going to be a big task for NPPA as it has no officials in most of the states.
Enforcement of ceiling prices may, therefore, have to be undertaken by the state drug control
administrations as the NPPA is a Central body. In Maharashtra, the state FDA has already
started acting on its own and is trying to enforce compliance of the NPPA order.
The NPPA enforced the price ceilings by expediting 300 cases of price ceiling
violations (Nautiyal 2017). The NPPA also revised the DPCO to include importers
and distributors under the definition of manufacturers (Shankar 2017c). Some
reports suggested that hospitals responded to the capping of stent prices by charging
exorbitant prices for consumables such as cardiac catheters, balloon catheters and
guide wire (Sreenivasan 2018). However, such compensatory prices increases can-
not be a reason for not limiting the prices of stents in the first place. Instead, the
NPPA has responded to these reports by requiring hospitals to provide detailed
232 9 Conclusion
invoices to their patients undergoing procedures involving stents (Sreenivasan

2018):
Since cardiac catheters are necessarily used during angioplasties and are an integral part of
the package, healthcare institutions which are performing angioplasty and billing the patients
shall also mention cost of cardiac catheters, balloon catheter and guide wire separately along
with their respective brand name, if any, name of the company, batch number and specifi-
cations in order to bring in greater transparency in the billing and monitoring of compliance
with the MRPs by the NPPA under para 20 of DPCO, 2013.
Although there is growing evidence to indicate that stents do not prevent heart
attacks and that they are unnecessary and expensive procedures involving adverse
events such as heart attacks and renal failure (Carroll 2018; Al-Lamee et al. 2017;
Brown and Redberg 2018), the Indian medical community is far from limiting their
use. Consequently, the NPPA’s role in limiting excessive profiteering from the sale
of stents must be counted as a success of the 2013 DPCO regulation. While the
government has addressed the pricing of stents, Nautiyal (2014b) provides examples
of the partial or incomplete nature of this regulation and suggests that the lack of
regulation has led to arbitrarily high prices for similar medical devices used in
different medical procedures:
Products are often being labeled with a high price due to lack of any regulation in pricing as
most of the medical devices have not been notified by the government. A case in point being
that drug eluting stent (DES) meant for cardiac disorder is notified but Cerebral shunt meant
for neurological disorders is not notified. Endotracheal tube used in anaesthesia devices
which falls under the catheter category is notified by the government while Laryngeal Mask
Airway is not notified. All the anaesthesia intubation devices therefore need to be regulated
and not only endotracheal tube. It has also been observed that notified medical device like
endotracheal tube is imported and sold in the name of “tube” to evade local rules and
import duty.
Overall, despite the many deficiencies in the design, implementation, and

enforcement of the 2013 DPCO, we expect that over time it will become more
binding and limit excessive increases in prices and margins. To achieve this objec-
tive, the NPPA must continually analyze and interpret disaggregated data compiled
by organizations such as the AIOCD and IMS Health and by itself through the
IPDMS, which runs into tens of thousands of SKU-level observations each month.
According to the budget estimates published on the NPPA’s website for the
2015–2016, the largest amount of expenses is allocated for consumer awareness
programs (see Table 9.1). In early 2017, the NPPA launched its mobile app Pharma
Sahi Daam in its efforts to spread awareness among consumers about the ceiling
prices of price-controlled medicines (Datta 2017). Given the extent of price-ceiling
violations that have been documented over the past several years and the limited
resources at the NPPA’s disposal, it can benefit from collaborating with academic
researchers to improve the design as well as to lower the cost of monitoring and
enforcement. Instead, the NPPA’s efforts to outsourcing the burden of enforcement
and compliance to consumers through its public grievance redressals mechanisms
such as Pharma Jan Samadhan can only contribute to an erosion of its regulatory
authority.
References 233
Table 9.1 Budgetary allocation for the National Pharmaceutical Pricing Authority, 2015–2016
Non-planned and planned spending Budget estimates in rupees
Period (2015–2016)
Salaries 38,000,000
Wages 7,000,000
OTA 100,000
Medical treatment 1,000,000
Travelling allowance (D) 2,500,000
Travelling allowance (F) 500,000
Office expenses 10,000,000
Rent, rate and taxes 30,500,000
Other administrative expenses 500,000
Professional services 12,000,000
Consumer awareness scheme 50,000,000
Source: NPPA website’s right to information act tab
URL: http://www.nppaindia.nic.in/last accessed on March 25, 2018
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widely used. New York Times.
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Nautiyal, S. (2014c, October 9). Maha FDA recommends NPPA to bring five categories of medical
devices under DPCO. PharmaBiz.com
Nautiyal, S. (2015a, January 7). State FDA writes to NPPA to regulate price of cardiac stents.
PharmaBiz.com
Nautiyal, S. (2015b, May 26). Maha FDA recommends NPPA to bring cardiac stents under NLEM.
PharmaBiz.com
Nautiyal, S. (2015c, May 29). Maharashtra FDA detects 5 distributors involved in overpricing of
cardiac stents. PharmaBiz.com
Nautiyal, S. (2017, April 29). NPPA fast tracks 300 overcharging cases of stents in hospitals based
on anomalies in medical bills. PharmaBiz.com
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devices to monitor prices. PharmaBiz.com
Shankar, R. (2017a, January 19). NPPA makes registration on IPDMS mandatory for coronary stent
manufacturers, importers and marketers. PharmaBiz.com
234 9 Conclusion
Shankar, R. (2017b, March 15). NPPA warns of action against cos selling notified medical devices
without MRP. PharmaBiz.com
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coronary stents to redefine ‘manufacturer.’ PharmaBiz.com
Sreenivasan, A. (2018, February 14). NPPA’s directive to hospitals to mention cost of consumables
to help check prices of consumables used in angioplasty.
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across hospitals in state. PharmaBiz.com
Appendix
Table A.1 Ceiling prices per tablet for tablet formulations of medicines under the 2013 DPCO
Medicine Strength Date Revised price ceiling
Aciclovir 200 mg Jun-13 7.3
Aciclovir 200 mg Apr-14 7.76
Aciclovir 200 mg Feb-15 8.06
Aciclovir 400 mg Apr-14 12.38
Aciclovir 400 mg Feb-15 12.86
Albendazole 400 mg Jun-13 9.12
Albendazole 400 mg Apr-14 9.7
Albendazole 400 mg Jul-14 9.92
Albendazole 400 mg Feb-15 10.3
Albendazole 400 mg Jun-16 7.15
Albendazole 400 mg Jul-16 10.3
Allopurinol 100 mg Sep-13 2.09
Allopurinol 100 mg Apr-14 2.22
Allopurinol 100 mg Feb-15 2.31
Allopurinol 100 mg Jun-16 1.76
Alprazolam 0.25 mg Jun-13 0.96
Alprazolam 0.25 mg Apr-14 1.02
Alprazolam 0.25 mg Feb-15 1.06
Alprazolam 0.5 mg Jun-13 2.01
Alprazolam 0.5 mg Apr-14 2.14
Alprazolam 0.5 mg Feb-15 2.22
Aluminium + Magnesium 50/250 mg Sep-14 0.49
Aluminium + Magnesium 50/250 mg Feb-15 0.51
Amiodarone 100 mg Jun-13 6.52
(continued)

Business and Economics, https://doi.org/10.1007/978-3-319-93393-1
236 Appendix
Table A.1 (continued)

Amiodarone 100 mg Apr-14 6.93
Amiodarone 100 mg Feb-15 7.2
Amiodarone 200 mg Apr-14 12.41
Amiodarone 200 mg Feb-15 12.89
Amiodarone 200 mg May-16 10.51
Amitriptyline 25 mg Jun-13 2.12
Amitriptyline 25 mg Apr-14 2.25
Amitriptyline 25 mg Feb-15 2.34
Amitriptyline 25 mg Jun-16 2.1
Amlodipine 2.5 mg Jun-13 2.03
Amlodipine 2.5 mg Dec-13 1.79
Amlodipine 2.5 mg Jan-14 2.03
Amlodipine 2.5 mg Apr-14 1.9
Amlodipine 2.5 mg Jul-14 1.9
Amlodipine 2.5 mg Aug-14 2.03
Amlodipine 2.5 mg Sep-14 1.9
Amlodipine 2.5 mg Feb-15 1.97
Amlodipine 2.5 mg May-15 2.03
Amlodipine 2.5 mg Jul-16 1.9
Amlodipine 5 mg Jun-13 3.06
Amlodipine 5 mg Dec-13 2.83
Amlodipine 5 mg Jan-14 3.06
Amlodipine 5 mg Apr-14 3.01
Amlodipine 5 mg Nov-14 3.06
Amlodipine 5 mg Dec-14 3.01
Amlodipine 5 mg Jan-15 3.06
Amlodipine 5 mg Feb-15 3.13
Amlodipine 5 mg May-16 2.33
Amlodipine 5 mg Jun-16 3.13
Amoxycillin + Clavulanic Acid 500/125 mg Jun-13 22.46
Amoxycillin + Clavulanic Acid 500/125 mg Apr-14 23.88
Amoxycillin + Clavulanic Acid 500/125 mg Feb-15 24.8
Amoxycillin + Clavulanic Acid 500/125 mg May-16 16.14
Amoxycillin + Clavulanic Acid 500/125 mg Jun-16 24.8
Amoxycillin + Clavulanic Acid 625 mg Feb-15 24.8
Amoxycillin + Clavulanic Acid 625 mg May-16 16.14
Aspirin 100 mg Sep-14 0.14
Aspirin 100 mg Feb-15 0.15
(continued)
Appendix 237

Aspirin 100 mg May-16 0.15
Aspirin 325 mg Sep-14 0.44
Aspirin 75 mg Mar-14 0.26
Aspirin 75 mg Aug-14 0.28
Atenolol 100 mg Jun-13 3.72
Atenolol 100 mg Apr-14 3.96
Atenolol 100 mg Feb-15 4.11
Atenolol 100 mg Jul-16 3.24
Atenolol 50 mg Apr-14 2.2
Atenolol 50 mg Feb-15 2.28
Atenolol 50 mg Jul-16 2.2
Atorvastatin 10 mg Jun-13 5.91
Atorvastatin 10 mg Apr-14 6.28
Atorvastatin 10 mg Jul-14 6.49
Atorvastatin 10 mg Feb-15 6.74
Atorvastatin 10 mg Mar-16 5.09
Atorvastatin 5 mg Jun-13 3.82
Atorvastatin 5 mg Feb-15 4.22
Azathioprine 50 mg Jun-13 9.89
Azathioprine 50 mg Apr-14 10.52
Azathioprine 50 mg Feb-15 10.92
Azathioprine 50 mg Jun-16 9.02
Azathioprine 50 mg Jul-16 10.92
Azithromycin 100 mg Jul-13 5.13
Azithromycin 100 mg Apr-14 5.45
Azithromycin 100 mg Feb-15 5.66
Azithromycin 250 mg Jul-13 10.26
Azithromycin 250 mg May-16 9.06
Azithromycin 250 mg Jun-16 11.33
Azithromycin 500 mg Nov-13 20.51
Azithromycin 500 mg May-16 17.83
(continued)
238 Appendix

Bisacodyl 5 mg Jul-13 0.97
Bisacodyl 5 mg Apr-14 1.03
Bisacodyl 5 mg Feb-15 1.07
Bisacodyl 5 mg Jun-16 0.93
Bisacodyl 5 mg Jul-16 1.07
Bromocriptine 1.25 mg Jun-13 7.58
Bromocriptine 1.25 mg Apr-14 8.06
Bromocriptine 1.25 mg Feb-15 8.37
Bromocriptine 2.5 mg Jun-13 13.6
Bromocriptine 2.5 mg Apr-14 14.46
Bromocriptine 2.5 mg Feb-15 15.02
Busulfan 2 mg Apr-14 3.63
Busulfan 2 mg Oct-15 3.63
Calcium 500 mg Jul-13 1.67
Calcium 500 mg Apr-14 1.78
Calcium 500 mg Feb-15 1.85
Carbamazepine 100 mg Apr-14 0.7
Carbamazepine 100 mg Aug-14 0.74
Carbamazepine 100 mg Feb-15 0.77
Carbamazepine 200 mg Aug-14 1.46
Carbamazepine 200 mg Feb-15 1.52
Carbamazepine 200 mg Mar-16 1.44
Carbamazepine 200 mg Jun-16 1.28
Carbamazepine 200 mg Jul-16 1.44
Carbimazole 10 mg Jun-13 3.43
Carbimazole 10 mg Apr-14 3.65
Carbimazole 10 mg Feb-15 3.79
Carbimazole 10 mg May-16 3.42
Carbimazole 5 mg Apr-14 1.88
Carbimazole 5 mg Feb-15 1.95
Cefixime 100 mg Jun-13 7.69
Cefixime 100 mg Apr-14 8.18
Cefixime 100 mg Feb-15 8.49
Cefixime 200 mg Jul-13 11.25
Cefixime 200 mg Apr-14 11.96
Cefixime 200 mg Feb-15 12.42
Cefixime 200 mg May-16 8.48
(continued)
Appendix 239

Cefixime 200 mg Jun-16 12.42
Cetirizine 10 mg Jun-13 1.81
Cetirizine 10 mg Apr-14 1.92
Cetirizine 10 mg Feb-15 1.99
Cetirizine 10 mg Jun-16 1.53
Cetirizine 10 mg Jul-16 1.99
Chlorambucil 2 mg Nov-13 45.22
Chlorambucil 2 mg Apr-14 48.08
Chlorambucil 2 mg Feb-15 49.93
Chlorambucil 2 mg Dec-15 49.93
Chlorambucil 2 mg Jul-16 32.84
Chlorpheniramine 4 mg Jul-13 0.1
Chlorpheniramine 4 mg Apr-14 0.11
Chlorpheniramine 4 mg Feb-15 0.11423
Chlorpheniramine 4 mg Jul-16 0.08514
Chlorpromazine 100 mg Sep-14 0.68
Chlorpromazine 100 mg Feb-15 0.71
Chlorpromazine 25 mg Aug-14 0.29
Chlorpromazine 50 mg Sep-14 0.41
Ciprofloxacin 250 mg Sep-14 2.02
Ciprofloxacin 250 mg Feb-15 2.1
Ciprofloxacin 250 mg May-16 1.62
Ciprofloxacin 250 mg Jun-16 2.1
Ciprofloxacin 500 mg Jun-16 4.01
Ciprofloxacin 500 mg Jul-15 4.01
Ciprofloxacin 500 mg Dec-15 4.01
Clindamycin 300 mg Nov-13 13.09
Clindamycin 300 mg Apr-14 13.92
Clindamycin 300 mg Feb-15 14.46
Clindamycin 300 mg May-16 13.56
Clindamycin 300 mg Jul-16 14.46
(continued)
240 Appendix

Clomifene 100 mg Jun-13 12.18
Clomifene 100 mg Apr-14 12.95
Clomifene 100 mg Feb-15 13.45
Clomifene 50 mg Jun-13 7.93
Clomifene 50 mg Apr-14 8.43
Clomifene 50 mg Feb-15 8.75
Clopidogrel 75 mg Jul-13 10.03
Clopidogrel 75 mg Apr-14 10.66
Clopidogrel 75 mg Feb-15 11.07
Clopidogrel 75 mg May-16 6.44
Clopidogrel 75 mg Jun-16 11.07
Colchicine 0.5 mg Jun-13 2.88
Colchicine 0.5 mg Apr-14 3.06
Colchicine 0.5 mg Feb-15 3.18
Colchicine 0.5 mg Jul-16 2.88
Cyclophosphamide 50 mg Jun-13 3.75
Cyclophosphamide 50 mg Apr-14 3.99
Cyclophosphamide 50 mg Feb-15 4.14
Cyclophosphamide 50 mg Jul-16 3.61
Dapsone 100 mg Sep-13 0.22
Dapsone 100 mg Apr-14 0.23
Dapsone 100 mg Feb-15 0.24
Dapsone 50 mg Sep-13 0.2
Dapsone 50 mg Apr-14 0.21
Dapsone 50 mg Feb-15 0.22
Dexamethasone 0.5 mg Apr-14 0.19
Dexamethasone 0.5 mg Aug-14 0.2
Dexamethasone 0.5 mg Feb-15 0.21
Dexamethasone 0.5 mg May-16 0.18
Dextromethorphan 30 mg Sep-14 5.77
Dextromethorphan 30 mg Feb-15 5.99
Diazepam 2 mg Aug-13 1.44
Diazepam 2 mg Apr-14 1.53
Diazepam 2 mg Feb-15 1.59
Diazepam 2 mg Jul-16 1.39
Diazepam 5 mg Jun-13 1.32
Diazepam 5 mg Apr-14 1.4
Diazepam 5 mg Feb-15 1.45
Diazepam 5 mg Jul-16 1.32
Diclofenac 50 mg Jun-13 1.95
Diclofenac 50 mg Apr-14 2.07
Diclofenac 50 mg Feb-15 2.15
(continued)
Appendix 241

Diclofenac 50 mg Jun-16 1.77
Diclofenac 50 mg Jul-16 2.07
Didanosine 250 mg Sep-13 23.93
Didanosine 250 mg Apr-14 25.44
Didanosine 250 mg Feb-15 26.42
Didanosine 250 mg Dec-15 26.42
Didanosine 400 mg Sep-14 32.83
Didanosine 400 mg Feb-15 34.09
Didanosine 400 mg Nov-15 34.09
Diethylcarbamazine 50 mg Jun-13 0.47
Diethylcarbamazine 50 mg Apr-14 0.5
Diethylcarbamazine 50 mg Feb-15 0.52
Diethylcarbamazine 50 mg Jun-16 0.5
Digoxin 0.25 mg Jun-13 1.26
Digoxin 0.25 mg Apr-14 1.34
Digoxin 0.25 mg Feb-15 1.39
Digoxin 0.25 mg May-16 1.11
Diloxanide 500 mg Nov-13 1.61
Diloxanide 500 mg Apr-14 1.71
Diloxanide 500 mg Feb-15 1.78
Diltiazem 30 mg Jun-13 2.27
Diltiazem 30 mg Apr-14 2.41
Diltiazem 30 mg Feb-15 2.5
Diltiazem 60 mg Apr-14 5.09
Diltiazem 60 mg Feb-15 5.29
Domperidone 10 mg Jul-13 2.26
Domperidone 10 mg Apr-14 2.4
Domperidone 10 mg Feb-15 2.49
Domperidone 10 mg Jun-16 2.24
Domperidone 10 mg Jul-16 2.49
Doxycycline 100 mg Apr-14 0.94
Doxycycline 100 mg Aug-14 1
Doxycycline 100 mg Feb-15 1.04
Enalapril 2.5 mg Jun-13 1.78
Enalapril 2.5 mg Apr-14 1.89
Enalapril 2.5 mg Feb-15 1.96
Enalapril 2.5 mg Jun-16 1.78
Enalapril 5 mg Jun-13 2.96
Enalapril 5 mg Apr-14 3.15
(continued)
242 Appendix

Enalapril 5 mg Feb-15 3.27
Enalapril 5 mg Jun-16 2.97
Enalapril 5 mg Jul-16 3.27
Ethambutol 200 mg Sep-13 0.97
Ethambutol 200 mg Apr-14 1.03
Ethambutol 200 mg Feb-15 1.07
Ethambutol 200 mg Jul-16 0.94
Ethambutol 400 mg Jun-13 2.17
Ethinyl Estradiol + Levonorgestrel 0.03/0.15 mg Jul-13 3.05
Ethinyl Estradiol + Levonorgestrel 0.03/0.15 mg Apr-14 3.24
Ethinyl Estradiol + Levonorgestrel 0.03/0.15 mg Feb-15 3.36
Ethinyl Estradiol + Levonorgestrel 0.03/0.15 mg Jun-16 3.07
Ethinylestradiol 0.01 mg Jun-13 2.12
Ethinylestradiol 0.01 mg Apr-14 2.25
Ethinylestradiol 0.01 mg Feb-15 2.34
Ethinylestradiol 0.01 mg Jul-16 2.1
Ethinylestradiol 0.05 mg Nov-13 3.53
Ethinylestradiol 0.05 mg Apr-14 3.75
Ethinylestradiol 0.05 mg Feb-15 3.89
Famotidine 20 mg Apr-14 0.21
Famotidine 20 mg Aug-14 0.22
Famotidine 20 mg Sep-14 0.29
Famotidine 20 mg Feb-15 0.3
Fluconazole 150 mg Jul-13 14.45
Fluconazole 150 mg Apr-14 15.36
Fluconazole 150 mg Feb-15 15.95
Fluconazole 150 mg Jun-16 10.99
(continued)
Appendix 243

Flutamide 250 mg Apr-14 9.16
Flutamide 250 mg Feb-15 9.51
Flutamide 250 mg Jun-16 8.62
Folic Acid 1 mg Nov-13 0.25
Folic Acid 1 mg Apr-14 0.27
Folic Acid 1 mg Feb-15 0.28
Folic Acid 5 mg Jun-13 1.15
Folic Acid 5 mg Dec-13 1.37
Folic Acid 5 mg Apr-14 1.46
Folic Acid 5 mg Feb-15 1.52
Glibenclamide 2.5 mg Jun-13 0.48
Glibenclamide 2.5 mg Apr-14 0.51
Glibenclamide 2.5 mg Feb-15 0.53
Glibenclamide 5 mg Jun-13 0.96
Glibenclamide 5 mg Apr-14 1.02
Glibenclamide 5 mg Feb-15 1.06
Glyceryl Trinitrate 0.5 mg Jun-13 1.85
Glyceryl Trinitrate 0.5 mg Apr-14 1.97
Glyceryl Trinitrate 0.5 mg Feb-15 2.05
Glyceryl Trinitrate 0.5 mg Jul-16 1.68
Griseofulvin 250 mg Apr-14 1.45
Griseofulvin 250 mg Feb-15 1.6
Griseofulvin 250 mg Jun-16 1.48
Hydrochlorothiazide 12.5 mg Jun-13 0.97
Hydrochlorothiazide 12.5 mg Apr-14 1.03
Hydrochlorothiazide 12.5 mg Feb-15 1.07
Hydrochlorothiazide 25 mg Jun-13 1.66
Hydrochlorothiazide 25 mg Apr-14 1.76
Hydrochlorothiazide 25 mg Feb-15 1.83
(continued)
244 Appendix

Hydroxychloroquine 200 mg Jun-13 5.64
Hydroxychloroquine 200 mg Apr-14 6
Hydroxychloroquine 200 mg Feb-15 6.23
Hydroxychloroquine 200 mg May-16 5.5
Hyoscine 10 mg Nov-13 2.83
Hyoscine 10 mg Apr-14 3.01
Hyoscine 10 mg Feb-15 3.13
Hyoscine 10 mg Jun-16 2.77
Imatinib Mesylate 100 mg Jun-13 87.59
Imatinib Mesylate 100 mg Apr-14 93.13
Imatinib Mesylate 100 mg Feb-15 96.71
Imatinib Mesylate 100 mg Mar-16 96.71
Imatinib Mesylate 100 mg May-16 96.71
Imatinib Mesylate 100 mg Jul-16 96.71
Imatinib Mesylate 400 mg Apr-14 285.29
Imatinib Mesylate 400 mg Feb-15 296.27
Imipramine 25 mg Jun-13 0.75
Imipramine 25 mg Apr-14 0.8
Imipramine 25 mg Feb-15 0.83
Imipramine 75 mg Jun-13 2
Imipramine 75 mg Apr-14 2.13
Imipramine 75 mg Feb-15 2.21
Isoniazide 100 mg Sep-13 0.72
Isoniazide 100 mg Apr-14 0.77
Isoniazide 100 mg Feb-15 0.8
Isoniazide 300 mg Jul-13 1.27
Isoniazide 300 mg Apr-14 1.35
Isoniazide 300 mg Feb-15 1.4
Isoniazide 300 mg Mar-16 1.86
Isoniazide 300 mg Apr-16 9999
Isosorbide Dinitrate 10 mg Jul-13 0.69
Isosorbide Dinitrate 10 mg Apr-14 0.73
Isosorbide Dinitrate 10 mg Feb-15 0.76
Isosorbide Dinitrate 10 mg Mar-16 0.69
Isosorbide Dinitrate 20 mg Dec-14 2
Isosorbide Dinitrate 20 mg Feb-15 2.08
Isosorbide-5-Mononitrate 10 mg Jun-13 1.92
Isosorbide-5-Mononitrate 10 mg Apr-14 2.04
Isosorbide-5-Mononitrate 10 mg Feb-15 2.12
Isosorbide-5-Mononitrate 20 mg Jun-13 3.29
(continued)
Appendix 245

Isosorbide-5-Mononitrate 20 mg Apr-14 3.5
Isosorbide-5-Mononitrate 20 mg Feb-15 3.63
Lamivudine 150 mg Jun-13 9.4
Lamivudine 150 mg Apr-14 9.99
Lamivudine 150 mg Feb-15 10.37
Lamivudine + Stavudine 150/30 mg Jun-13 9.2
Lamivudine + Stavudine 150/30 mg Apr-14 9.78
Lamivudine + Stavudine 150/30 mg Feb-15 10.16
Lamivudine + Stavudine 150/30 mg Jul-16 8.86
Lamivudine + Stavudine + Nevirapine 150/30/200 mg Jun-13 17.29
Lamivudine + Stavudine + Nevirapine 150/30/200 mg Apr-14 18.38
Lamivudine + Stavudine + Nevirapine 150/30/200 mg Feb-15 19.09
Lamivudine + Zidavudine + Nevirapine 150/300/200 mg Jun-13 19.05
Lamivudine + Zidavudine + Nevirapine 150/300/200 mg Apr-14 20.25
Lamivudine + Zidavudine + Nevirapine 150/300/200 mg Feb-15 21.03
Lamivudine + Zidovudine 150/300 mg Jun-13 19.63
Lamivudine + Zidovudine 150/300 mg Apr-14 20.87
Lamivudine + Zidovudine 150/300 mg Feb-15 21.67
Lamivudine + Zidovudine 150/300 mg Jul-16 18.61
Leflunomide 10 mg Jun-13 15.1
Leflunomide 10 mg Apr-14 16.05
Leflunomide 10 mg Feb-15 16.67
Leflunomide 20 mg Apr-14 30.44
Leflunomide 20 mg Feb-15 31.61
Levo-Thyroxine (Synthetic) 100 mcg Jun-13 1.11
Levo-Thyroxine (Synthetic) 100 mcg Apr-14 1.18
Levo-Thyroxine (Synthetic) 100 mcg Feb-15 1.23
Levo-Thyroxine (Synthetic) 100 mcg Mar-16 1.11
Levo-Thyroxine (Synthetic) 100 mcg Jun-16 1.23
Levo-Thyroxine (Synthetic) 100 mcg Jul-16 1.11
Levo-Thyroxine (Synthetic) 50 mcg Jul-13 1.01
Levo-Thyroxine (Synthetic) 50 mcg Apr-14 1.07
Levo-Thyroxine (Synthetic) 50 mcg Feb-15 1.11
Levo-Thyroxine (Synthetic) 50 mcg Mar-16 0.91
Levodopa + Carbidopa 100/10 mg Mar-14 1.44
Levodopa + Carbidopa 100/10 mg Aug-14 1.61
Levodopa + Carbidopa 100/10 mg Feb-15 1.67
Levodopa + Carbidopa 100/10 mg May-16 1.44
Levodopa + Carbidopa 100/25 mg Apr-14 2
(continued)
246 Appendix

Levodopa + Carbidopa 100/25 mg Feb-15 2.35
Levodopa + Carbidopa 100/25 mg May-16 2.1
Levodopa + Carbidopa 250/25 mg Feb-15 4
Lithium 300 mg Jun-13 1.41
Lithium 300 mg Apr-14 1.5
Lithium 300 mg Feb-15 1.56
Losartan 25 mg Jun-13 2.5
Losartan 25 mg Apr-14 2.66
Losartan 25 mg Feb-15 2.76
Losartan 50 mg Jun-13 4.3
Losartan 50 mg Apr-14 4.57
Losartan 50 mg Feb-15 4.75
Medroxyprogesterone 10 mg Jun-13 5.24
Medroxyprogesterone 10 mg Apr-14 5.57
Medroxyprogesterone 10 mg Feb-15 5.78
Medroxyprogesterone 10 mg Jun-16 4.99
Mefloquine 250 mg Jun-13 50.06
Mefloquine 250 mg Apr-14 53.22
Mefloquine 250 mg Feb-15 55.27
Mefloquine 250 mg Jun-16 47.31
Melphalan 2 mg Nov-13 108.53
Melphalan 2 mg Apr-14 115.39
Melphalan 2 mg Feb-15 119.83
Melphalan 2 mg Dec-15 119.83
Melphalan 2 mg Jul-16 87.3
Melphalan 5 mg Feb-15 201.02
Melphalan 5 mg Aug-15 201.02
Mercaptopurine 50 mg Nov-13 8.93
Mercaptopurine 50 mg Apr-14 9.49
Mercaptopurine 50 mg Feb-15 9.86
Metformin 500 mg Jun-13 1.56
(continued)
Appendix 247

Metformin 500 mg Apr-14 1.66
Metformin 500 mg Feb-15 1.72
Metformin 500 mg Mar-16 1.77
Metformin 500 mg Jun-16 1.39
Metformin 500 mg Jul-16 1.77
Methotrexate 10 mg Jun-13 13.95
Methotrexate 10 mg Apr-14 14.83
Methotrexate 10 mg Feb-15 15.4
Methotrexate 2.5 mg Jun-13 4.72
Methotrexate 2.5 mg Apr-14 5.02
Methotrexate 2.5 mg Feb-15 5.21
Methotrexate 2.5 mg Jul-16 5.21
Methotrexate 5 mg Apr-14 8.08
Methotrexate 5 mg Feb-15 8.39
Methotrexate 7.5 mg Apr-14 11.98
Methotrexate 7.5 mg Feb-15 12.44
Methyldopa 250 mg Dec-14 1.69
Methyldopa 250 mg Feb-15 1.76
Metoclopramide 10 mg Jun-13 1.04
Metoclopramide 10 mg Apr-14 1.11
Metoclopramide 10 mg Feb-15 1.15
Metoclopramide 10 mg Jul-16 1.08
Metoprolol 25 mg Jul-13 3.73
Metoprolol 25 mg Dec-13 3.38
Metoprolol 25 mg Feb-14 3.73
Metoprolol 25 mg Mar-14 3.38
Metoprolol 25 mg Apr-14 3.59
Metoprolol 25 mg Jun-16 2.88
Metoprolol 50 mg Jul-13 5.3
Metoprolol 50 mg Dec-13 5.01
Metoprolol 50 mg Apr-14 5.33
Metoprolol 50 mg Jun-16 4.36
Metronidazole 200 mg Jun-16 0.4
Metronidazole 400 mg May-16 0.75
Mifepristone 200 mg Jul-13 357.13
(continued)
248 Appendix

Mifepristone 200 mg Apr-14 379.7
Mifepristone 200 mg Feb-15 394.31
Mifepristone 200 mg May-16 298.49
Mifepristone 200 mg Jul-16 394.31
Misoprostol 100 mcg Jun-13 9.43
Misoprostol 100 mcg Apr-14 10.03
Misoprostol 100 mcg Feb-15 10.42
Morphine 10 mg Apr-14 5.36
Morphine 10 mg Mar-15 5.36
Neostigmine 15 mg Nov-13 4.63
Neostigmine 15 mg Apr-14 4.92
Neostigmine 15 mg Feb-15 5.11
Nifedipine 10 mg Jun-13 1.13
Nifedipine 10 mg Apr-14 1.2
Nifedipine 10 mg Feb-15 1.25
Nifedipine 10 mg Jun-16 1.15
Nifedipine 10 mg Jul-16 1.25
Nifedipine 20 mg Dec-13 0.32
Nifedipine 20 mg Apr-14 0.34
Nifedipine 20 mg Feb-15 0.35
Nitrofurantoin 100 mg Jun-13 6.88
Nitrofurantoin 100 mg Apr-14 7.31
Nitrofurantoin 100 mg Feb-15 7.59
Norethisterone 5 mg Jun-13 5.07
Norethisterone 5 mg Apr-14 5.39
Norethisterone 5 mg Feb-15 5.6
Norethisterone 5 mg Jun-16 4.75
Ofloxacin 100 mg Jul-13 3.3
Ofloxacin 100 mg Apr-14 3.51
Ofloxacin 100 mg Feb-15 3.65
Ofloxacin 200 mg Jul-13 4.9
Ofloxacin 200 mg Apr-14 5.21
Ofloxacin 200 mg Feb-15 5.41
Olanzapine 10 mg Jun-13 5.32
Olanzapine 10 mg Apr-14 5.66
Olanzapine 10 mg Feb-15 5.88
Olanzapine 5 mg Jun-13 2.9
Olanzapine 5 mg Apr-14 3.08
Olanzapine 5 mg Feb-15 3.2
Ondansetron 4 mg Jul-13 4.76
Ondansetron 4 mg Apr-14 5.06
Ondansetron 4 mg Feb-15 5.25
(continued)
Appendix 249

Ondansetron 4 mg Jun-16 4.35
Ondansetron 8 mg Apr-14 11.77
Ondansetron 8 mg Feb-15 12.22
Paracetamol 500 mg Jun-13 0.94
Paracetamol 500 mg Apr-14 1
Paracetamol 500 mg Feb-15 1.04
Paracetamol 500 mg Jun-16 0.83
Paracetamol 500 mg Jul-16 1.04
Phenobarbitone 30 mg Jun-13 0.93
Phenobarbitone 30 mg Apr-14 0.99
Phenobarbitone 30 mg Jul-14 1.48
Phenobarbitone 30 mg Feb-15 1.54
Phenobarbitone 60 mg Apr-14 1.8
Phenobarbitone 60 mg May-14 2.53
Phenobarbitone 60 mg Feb-15 2.63
Phenytoin 100 mg Jun-13 1.42
Phenytoin 100 mg Apr-14 1.51
Phenytoin 100 mg Feb-15 1.57
Phenytoin 100 mg May-16 1.27
Phenytoin 50 mg Apr-14 0.82
Phenytoin 50 mg Feb-15 0.85
Phenytoin 50 mg May-16 0.7
Prednisolone 10 mg Apr-14 0.92
Prednisolone 10 mg Aug-14 0.98
Prednisolone 10 mg Feb-15 1.02
Prednisolone 10 mg May-16 0.9
Prednisolone 20 mg Mar-14 1.72
Prednisolone 20 mg Jun-16 1.81
Prednisolone 5 mg Aug-14 0.58
(continued)
250 Appendix

Prednisolone 5 mg May-16 0.52
Primaquine 2.5 mg Jun-13 1.55
Primaquine 2.5 mg Apr-14 1.65
Primaquine 2.5 mg Feb-15 1.71
Primaquine 7.5 mg Jun-13 1.98
Primaquine 7.5 mg Apr-14 2.11
Primaquine 7.5 mg Feb-15 2.19
Promethazine 10 mg Sep-13 0.93
Promethazine 10 mg Apr-14 0.99
Promethazine 10 mg Feb-15 1.03
Promethazine 25 mg Jun-13 2.49
Promethazine 25 mg Apr-14 2.65
Promethazine 25 mg Feb-15 2.75
Propranolol 10 mg Jul-13 1.09
Propranolol 10 mg Apr-14 1.16
Propranolol 10 mg Feb-15 1.2
Propranolol 10 mg Jun-16 1.07
Propranolol 40 mg Aug-13 2.56
Propranolol 40 mg Apr-14 2.72
Propranolol 40 mg Feb-15 2.82
Propranolol 40 mg Jun-16 2.59
Pyrazinamide 1000 mg Jun-13 8.3
Pyrazinamide 1000 mg Apr-14 8.82
Pyrazinamide 1000 mg Feb-15 9.16
Pyrazinamide 1500 mg Aug-13 9.78
Pyrazinamide 1500 mg Jul-16 9.29
Pyridostigmine 60 mg Jun-13 12.69
Pyridostigmine 60 mg Apr-14 13.49
Pyridostigmine 60 mg Feb-15 14.01
(continued)
Appendix 251

Pyrimethamine 25 mg Jul-14 0.89
Pyrimethamine 25 mg Feb-15 0.92
Quinine 300 mg Jun-13 5.1
Quinine 300 mg Apr-14 5.42
Quinine 300 mg Feb-15 5.63
Quinine 300 mg Jun-16 5.09
Quinine 300 mg Jul-16 5.63
Raloxifene 60 mg Jun-13 9.89
Raloxifene 60 mg Apr-14 10.52
Raloxifene 60 mg Feb-15 10.92
Rifampicin 150 mg Sep-14 1.22
Rifampicin 150 mg Feb-15 1.27
Rifampicin 300 mg Sep-14 2.76
Salbutamol 2 mg Apr-14 0.14
Salbutamol 2 mg Aug-14 0.15
Salbutamol 2 mg Feb-15 0.16
Salbutamol 4 mg Apr-14 0.17
Salbutamol 4 mg Aug-14 0.18
Salbutamol 4 mg Feb-15 0.19
Salbutamol 4 mg Jun-16 0.17
Salbutamol 4 mg Jul-16 0.18
Sodium Valproate 200 mg Jun-13 3.07
Sodium Valproate 200 mg Apr-14 3.26
Sodium Valproate 200 mg Feb-15 3.39
Sodium Valproate 500 mg Apr-14 7.63
Sodium Valproate 500 mg Feb-15 7.92
Spironolactone 25 mg Sep-14 1.22
Spironolactone 25 mg Feb-15 1.27
Sulfasalazine 500 mg Apr-14 3.65
Sulfasalazine 500 mg Aug-14 3.88
Sulfasalazine 500 mg Feb-15 4.03
Sulfasalazine 500 mg May-16 3.7
Tamoxifen 10 mg Jun-13 4.35
Tamoxifen 10 mg Apr-14 4.62
Tamoxifen 10 mg Feb-15 4.8
Tamoxifen 20 mg Jun-13 2.77
Tamoxifen 20 mg Apr-14 2.95
(continued)
252 Appendix

Tamoxifen 20 mg Feb-15 3.06
Terbutaline 2.5 mg Jun-13 0.98
Terbutaline 2.5 mg May-14 0.98
Terbutaline 2.5 mg Feb-15 1.08
Trihexyphenidyl 2 mg Jun-13 1.36
Trihexyphenidyl 2 mg Apr-14 1.45
Trihexyphenidyl 2 mg Feb-15 1.51
Trihexyphenidyl 2 mg Jun-16 1.13
Verapamil 40 mg Sep-14 0.47
Verapamil 40 mg Feb-15 0.49
Verapamil 80 mg Sep-14 0.9
Verapamil 80 mg Feb-15 0.93
Vitamin B1 Plain (With additives) 100 mg Sep-14 4.16
Vitamin B1 Plain (With additives) 100 mg Feb-15 4.32
Warfarin 5 mg Jun-13 2.24
Warfarin 5 mg Apr-14 2.38
Warfarin 5 mg Feb-15 2.47
Warfarin 5 mg Jun-16 2.2
Zidovudine 300 mg Jun-13 14.97
Zidovudine 300 mg Apr-14 15.92
Zidovudine 300 mg Feb-15 16.53
Zidovudine 300 mg Jul-16 12.69
Source: NPPA
Table A.2 A partial list of top-1157 SKUs violating the 2013 DPCO during 2013-2016 by
charging MRP at least double the DPCO ceiling price
Medicine Company SKU MRP Ceiling PTR
Aciclovir Eli Lilly And Lovir (Eli Lilly) 365 36.5 58.48
Company (India) 200 mg tablet 5
Pvt. Ltd.
Aciclovir Eli Lilly And Lovir (Eli Lilly) 365 58.2 99.65
Pvt. Ltd.
Aciclovir Eli Lilly And Lovir (Eli Lilly) 124.56 58.2 99.65
Pvt. Ltd.
Albendazole Zydus Cadila Zelbend (Zydus 125 9.12 1.75
Cadila) 400 mg
tablet 1
Albendazole Alde Medi Impex Aldezole 400 mg 125 9.92 11.95
tablet 1
Albendazole Alde Medi Impex Aldezole 400 mg 118 9.7 11.95
tablet 1
(continued)
Appendix 253

Albendazole Maan Pharmaceu- Velocid 400 mg 60 9.12 45.71
ticals Ltd. tablet 1
Albendazole Ipca Laboratories Nemozole 55.57 9.12 44.46
Pvt Ltd. 400 mg tablet 1
Albendazole Maan Pharmaceu- Velocid 400 mg 52.37 9.12 45.71
Albendazole Maan Pharmaceu- Velocid 400 mg 52.37 9.12 41.9
Albendazole Glaxosmithkline Zentel 400 mg 184 45.6 140.2
Pharmaceuticals tablet 5
Ltd.
Albendazole Glaxosmithkline Zentel 400 mg 184 45.6 78.6
Ltd.
Albendazole Ravian Pharma- Exporm 400 mg 27 9.12 6.92
ceuticals Pvt Ltd tablet 1
Albendazole Glaxosmithkline Zentel 400 mg 102.7 35.75 78.2
Ltd.
Albendazole Maneesh Pharma- Goworm 400 mg 19.05 7.15 15.24
ceuticals Ltd tablet 1
Albendazole Morepen Labora- Zolbend 400 mg 22 9.12 2
tories Limited tablet 1
Albendazole Indchemie Health Dispel 400 mg 21.5 9.12 16.56
Specialities Pvt. tablet 1
Ltd.
Ltd.
Albendazole Morepen Labora- Zolbend 400 mg 22 9.7 1.35
Albendazole Nestor Albest 400 mg 20.56 9.12 16.45
Albendazole Shrinivas Gujarat Helminex 16.1 7.15 12.88
Laboratories Pvt 400 mg tablet 1
Ltd
Albendazole Morepen Labora- Zolbend 400 mg 22 9.92 1.35
(continued)
254 Appendix

Albendazole Kare Health Spe- Abz (Kare 19.8 9.12 7.87
cialities Pvt Ltd Health) 400 mg
tablet 1
Albendazole Kare Health Spe- Abz (Kare 19.8 9.12 14.86
cialities Pvt Ltd Health) 400 mg
tablet 1
Albendazole Indoco Remedies Abz 400 mg tab- 39.6 18.24 30.18
Ltd let 2
Ltd let 2
Albendazole Shrinivas Gujarat Alvela 400 mg 20.95 9.7 16.76
Laboratories Pvt tablet 1
Ltd
Ltd.
Ltd.
Ltd.
Albendazole Pfizer Ltd Combantrin A 15.18 7.15 12.15
400 mg tablet 1
Albendazole Alkem Laborato- Noworm 400 mg 19.3 9.12 14.86
ries Ltd. tablet 1
Ltd
Ltd.
Ltd.
Albendazole Shrinivas Gujarat Albela 400 mg 19.15 9.12 14.4
Ltd
Albendazole Cipla Ltd. Tiobend 400 mg 15 7.15 2
tablet 1
Ltd.
Albendazole Alde Medi Impex Aldezole 400 mg 14.93 7.15 11.95
tablet 1
Albendazole Maneesh Pharma- Goworm 400 mg 19.03 9.12 15.23
(continued)
Appendix 255

Albendazole Almet Corporation Vermanth 19 9.12 14.63
Ltd. 400 mg tablet 1
Ltd
Albendazole Magnum Labora- Allbend 400 mg 18.9 9.12 10.6
tories Pvt. Ltd. tablet 1
Ltd
Ltd let 2
Ltd.
Ltd.
Ltd
Ltd
Ltd
Albendazole Almet Corporation Vermanth 21 10.3 16.16
Ltd. 400 mg tablet 1
Albendazole Moxy Lab Thelmin 400 mg 18.45 9.12 14.76
tablet 1
Ltd.
Ltd
Albendazole Indoco Remedies Olban 400 mg 18.3 9.12 7.87
Ltd tablet 1
Ltd tablet 1
Ltd tablet 1
Ltd tablet 1
Ltd
(continued)
256 Appendix

Amitriptyline Shine Pharmaceu- Shine 25 mg tab- 58 21.2 44.19
ticals Ltd let 10
ticals Ltd let 10
ticals Ltd let 10
ticals Ltd let 10
Amitriptyline Shine Pharmaceu- Shine 25 mg tab- 47.85 21 36.46
ticals Ltd let 10
Amitriptyline Shine Pharmaceu- Shine 25 mg tab- 46.76 21 37.41
ticals Ltd let 10
Amlodipine Ozone Amlozone 97.32 20.3 77.86
Pharmaceuticals 2.5 mg tablet 10
Amlodipine Serve Bpc 5 mg tablet 100 28.3 8.23
Pharmaceuticals 10
Amlodipine Emcure Pharma- Numlo 5 mg tab- 78.65 23.3 60.55
ceuticals Ltd let 10
Amlodipine Emcure Pharma- Numlo 5 mg tab- 78.55 23.3 60.46
Amlodipine Serve Bpc 5 mg tablet 100 30.1 8.23
Pharmaceuticals 10
Amlodipine Pfizer Ltd Amlogard 2.5 mg 66 20.3 50.82
tablet 10
Amlodipine Alkem Laborato- Amlokem 5 mg 71.9 23.3 57.52
ries Ltd. tablet 10
Amlodipine Wockhardt Ltd Myodura 2.5 mg 35.42 12.53 28.34
tablet 7
Amlodipine Wockhardt Ltd Myodura 5 mg 60.46 21.42 48.37
tablet 7
Amlodipine Pfizer Ltd Amlogard 5 mg 86 30.6 66.21
tablet 10
Amlodipine Alkem Laborato- Amlogen 5 mg 82.76 30.6 66.21
ries Ltd. tablet 10
Amlodipine Pfizer Ltd Amlogard 5 mg 82.76 30.6 26.35
tablet 10
Amlodipine Wockhardt Ltd Myodura 2.5 mg 35.42 14.21 28.34
tablet 7
Amlodipine Alkem Laborato- Amlokem 5 mg 71.9 31.3 57.52
ries Ltd. tablet 10
Amlodipine Pfizer Ltd Amlogard 2.5 mg 66 30.45 50.82
tablet 15
Amlodipine Alkem Laborato- Amlokem 5 mg 60 28.3 48
ries Ltd. tablet 10
Amlodipine Micro Labs Ltd Amlong 2.5 mg 43 20.3 32.76
tablet 10
(continued)
Appendix 257

Amlodipine Cipla Ltd. Amlopres 5 mg 49.1 23.3 37.79
tablet 10
Amlodipine Alkem Laborato- Amlokem 5 mg 63 30.1 48
ries Ltd. tablet 10
Amlodipine Pfizer Ltd Amlogard 2.5 mg 63.52 30.45 25.77
tablet 15
Amlodipine Zydus Cadila Amlodepin 58.9 28.3 45.35
(Zydus) 5 mg
tablet 10
Amlodipine Cipla Ltd. Amlopres 5 mg 47.77 23.3 36.77
tablet 10
Amlodipine Zydus Cadila Amlodepin 56.68 28.3 45.35
(Zydus) 5 mg
tablet 10
Amoxycillin + Organic Clavoseal 246.1 48.42 196.88
Clavulanic Acid Laboratories 500/125 mg tab-
let 3
let 3
Amoxycillin + United Biotech Clavotec 219.5 67.38 135
Clavulanic Acid (P) Ltd 500/125 mg tab-
let 3
Amoxycillin + United Biotech Clavotec 219.5 67.38 167.24
let 3
let 3
Amoxycillin + United Biotech Clavotec 219.5 71.64 167.24
let 3
Amoxycillin + Ranbaxy Labora- Moxclav 402.99 134.76 307.05
Clavulanic Acid tories Ltd 500/125 mg tab-
let 6
Amoxycillin + Cadila Pharma- Symbiotik Xl 260.4 96.84 198.4
Clavulanic Acid ceuticals Ltd 500/125 mg tab-
let Xl 6
Amoxycillin + Grandcure Grandmox 260 96.84 198.1
Clavulanic Acid Healthcare Pvt. 500/125 mg tab-
Ltd. let 6
Amoxycillin + Abbott Healthcare Amoxyclav 260 96.84 45
Clavulanic Acid Pvt. Ltd 500/125 mg tab-
let 6
Amoxycillin + Dr. Johns Labora- Roclav 250.7 96.84 190.48
Clavulanic Acid tories Pvt Ltd 500/125 mg tab-
let 6
(continued)
258 Appendix

Amoxycillin + Marc Pharma Amoclave 248 96.84 198.4
Clavulanic Acid 500/125 mg tab-
let Dt 6
Amoxycillin + Wallace Pharma- Nable A 238.3 96.84 181.56
Clavulanic Acid ceuticals Ltd. 500/125 mg tab-
let 6
let 6
let 6
Amoxycillin + United Biotech Clavox (United) 219.5 89.84 167.24
let 4
Amoxycillin + Algen Healthcare Fmclav 235 96.84 179.05
Clavulanic Acid Pvt Ltd 500/125 mg tab-
let 6
let 4
Amoxycillin + United Biotech Clavox (United) 149.9 64.56 120
let 4
Amoxycillin + Algen Healthcare Fmclav 223.81 96.84 179.05
Clavulanic Acid Pvt Ltd 500/125 mg tab-
let 6
Amoxycillin + Dr. Johns Labora- Jonclav 223.81 96.84 179.05
let 6
let 6
let 4
Amoxycillin + Unichem Labora- Myclav 220.49 96.84 181.03
Clavulanic Acid tories Ltd 500/125 mg tab-
let 6
Amoxycillin + Micro Labs Ltd Hexamentin 325 143.28 260
let 6
Amoxycillin + Healall Pharma Hiclav 355.1 161.4 284.08
Clavulanic Acid India Pvt. Ltd. 500/125 mg tab-
let 10
let 4
(continued)
Appendix 259

Amoxycillin + Indswift Laborato- Topclav 193.8 89.84 148.39
Clavulanic Acid ries Ltd. 500/125 mg tab-
let 4
Amoxycillin + Ritz Pharma Moxiz Cv 347.5 161.4 278
let 10
let 4
Amoxycillin + Nitin N Clav 203.93 96.84 163.15
Clavulanic Acid Pharmaceuticals 500/125 mg tab-
let 6
Amoxycillin + Zydus Cadila Augmed 307.68 148.8 246.15
let 6
let 4
let 4
let 4
let 6
let 6
let 6
let 6
let 6
let 6
Amoxycillin + Sh Pharmaceuti- Kokkos Clav 195 96.84 148.57
Clavulanic Acid cals Ltd 500/125 mg tab-
let 6
Amoxycillin + Lark Laboratories Clavimox 271 134.76 100.04
Clavulanic Acid Ltd 500/125 mg tab-
let 6
(continued)
260 Appendix

Atenolol Torrent Pharma- Betacard 50 mg 46 20.7 35.05
ceuticals Ltd. tablet Xl 10
Atenolol Torrent Pharma- Betacard 50 mg 46 20.7 24.98
ceuticals Ltd. tablet Xl 10
Atenolol Ipca Laboratories Teno 50 mg tab- 44.15 20.7 33.64
Pvt Ltd. let 10
Pvt Ltd. let 10
Atenolol Zydus Cadila Catenol 50 mg 43.9 20.7 33.8
tablet 10
Atenolol Zydus Cadila Catenol 50 mg 43.9 20.7 33.47
tablet 10
Atenolol Psychotropics Etopress 50 mg 47.2 23.24 37.76
India Ltd tablet 14
Pvt Ltd. let 10
Atenolol Abbott Healthcare Tenormin 50 mg 58.25 28.98 44.38
Pvt. Ltd tablet 14
Atorvastatin Orchid Chemicals Avastin 10 mg 28022 64.89999 39.98
& Pharmaceuticals tablet 10
Ltd
Atorvastatin Premier Atorsyn 10 mg 199 64.89999 42.51
Nutraceuticals Pvt tablet 10
Ltd
Atorvastatin Alembic Ltd Eternex 10 mg 147.5 50.9 118
tablet 10
Atorvastatin Cadila Pharma- Caditor 10 mg 129.52 50.9 104.45
Atorvastatin Indoco Remedies Atherochek 126.3 50.9 96.76
Ltd 10 mg tablet 10
Atorvastatin Ordain Healthcare Nustat 10 mg 145 59.1 47.67
Pvt. Ltd tablet 10
Pvt. Ltd tablet 10
Pvt. Ltd tablet 10
Atorvastatin Indoco Remedies Atherochek 114.87 50.9 88.42
Ltd 10 mg tablet 10
Pvt. Ltd tablet 10
Atorvastatin Cure Quick Cholat 10 mg 130 59.1 104
Atorvastatin Cure Quick Cholat 10 mg 130 59.1 94.35
(continued)
Appendix 261

Azathioprine Zydus Cadila Zymurine 50 mg 93.48 36.08 74.79
tablet 4
tablet 4
tablet 4
Azithromycin Seagull Labs Azimacro 240 59.58 45.44
(I) Ltd 500 mg tablet 3
Azithromycin Seagull Labs Azimacro 240 61.53 45.44
(I) Ltd 500 mg tablet 3
Azithromycin Cadila Pharma- Zycin(Cadila) 68.71 17.83 54.97
ceuticals Ltd 500 mg tablet 1
Azithromycin Salud Care (I) Pvt Azito 500 mg 220 59.58 167.62
Ltd tablet 3
Azithromycin Salud Care (I) Pvt Azito 500 mg 210.51 59.58 168.41
Ltd tablet 3
Ltd tablet 3
Ltd tablet 3
Ltd tablet 3
Ltd tablet 3
Ltd tablet 3
Ltd tablet 3
Azithromycin Graf Laboratories Zicin 500 mg 200 65.43 46.48
Pvt Ltd tablet 3
(continued)
262 Appendix

Azithromycin Ipca Laboratories Azifast 250 mg 71.47 27.18 57.18
Pvt Ltd. tablet 3
Azithromycin Zuventus Azitus 250 mg 71 27.18 54.65
Healthcare Ltd tablet 3
Azithromycin Cadila Pharma- Zycin(Cdl) 84.1 32.73 63.71
Pvt Ltd. tablet 3
Azithromycin Ipca Laboratories Azifast 250 mg 78 30.78 59.89
Pvt Ltd. tablet 3
Pvt Ltd. tablet 3
Azithromycin Ipca Laboratories Azifast 250 mg 78 32.73 59.89
Pvt Ltd. tablet 3
Azithromycin Jb Chemicals Azicyte 250 mg 62.56 27.18 50.05
tablet 3
Azithromycin Rkm Health Care Azisym 250 mg 230 102.6 181.7
tablet 10
Azithromycin Rkm Health Care Azisym 250 mg 230 102.6 184
tablet 10
Azithromycin Wockhardt Ltd Aziwok 500 mg 118.91 53.49 91.52
tablet 3
Azithromycin Zuventus Azitus 250 mg 66.63 30.78 53.31
Azithromycin Alembic Ltd Azithral 500 mg 115.7 53.49 89.05
tablet 3
Pvt Ltd. tablet 3
Azithromycin Rowan Avitla 250 mg 138.86 65.46 102.86
Bioteuticals tablet 6
(P) Ltd
Azithromycin Rkm Health Care Azisym 250 mg 230 109.1 184
tablet 10
(continued)
Appendix 263

Pvt Ltd. tablet 3
Pvt Ltd. tablet 3
Pvt Ltd. tablet 3
Azithromycin Rowan Avitla 250 mg 135 65.46 77.71
(P) Ltd
Azithromycin Rowan Avitla 250 mg 135 65.46 77.53
(P) Ltd
Azithromycin Salud Care (I) Pvt Azito 250 mg 125 61.56 95.24
Ltd tablet 6
Bisacodyl Psychotropics Bisomer 5 mg 60 10.3 3.46
India Ltd tablet 10
Bisacodyl Shreya Life Sci- Julax 5 mg tablet 31.05 9.3 23.66
ences Pvt. Ltd 10
ences Pvt. Ltd 10
ences Pvt. Ltd 10
ences Pvt. Ltd 10
ences Pvt. Ltd 10
ences Pvt. Ltd 10
ences Pvt. Ltd 10
(continued)
264 Appendix

ences Pvt. Ltd 10
ences Pvt. Ltd 10
Carbamazepine Crescent Formula- Zigma 100 mg 45 7.4 5.91
tions Pvt. Ltd. tablet 10
Carbamazepine Talent Healthcare Epilent 200 mg 79.5 14.6 34.88
tablet 10
tablet 10
tablet 10
tablet 10
Carbamazepine Intas Pharmaceuti- Zen Retard 20.4 7.7 17.14
cals Ltd 100 mg tablet 10
Carbamazepine Tas Med (India) Epilep 200 mg 31.51 12.8 26.47
Private Ltd. tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
Carbamazepine Novartis India Ltd Tegrital Cr 25.81 12.8 19.87
200 mg tablet 10
Carbimazole Abbott India Ltd. Thyrocab 10 mg 428 205.8 326.1
tablet 60
Cefixime Troikaa Pharma- Zim 200 mg tab- 1126.73 84.8 901.39
Cefixime Unicure India Pvt Fiximo 200 mg 284.7 47.84 66.6
Ltd tablet 4
(continued)
Appendix 265

Cefixime Unicure India Pvt Fiximo 200 mg 260 45 65
Ltd tablet 4
Cefixime Unicure India Pvt Fiximo 200 mg 260 45 64.4
Ltd tablet 4
Cefixime Unicure India Pvt Fiximo 200 mg 260 47.84 66.6
Ltd tablet 4
Cefixime Unicure India Pvt Fiximo 200 mg 260 47.84 65
Ltd tablet 4
Cefixime Indoco Remedies Vexim 200 mg 196 45 112.9
Ltd tablet 4
Cefixime Indoco Remedies Vexim 200 mg 196 45 160.79
Ltd tablet 4
Cefixime Cipla Ltd. Cefix 200 mg 192.5 45 39
tablet 4
Cefixime Indoco Remedies Vexim 200 mg 196 47.84 160.79
Ltd tablet 4
Cefixime Trident Cixi 200 mg tab- 132.75 33.92 106.2
Pharmaceuticals let 4
Cefixime Cipla Ltd. Cefix 200 mg 130.33 33.92 45
tablet 4
Cefixime Reliance Formula- Efoxim 200 mg 172.07 45 137.66
tion Pvt Ltd tablet 4
Cefixime Reliance Formula- Efoxim 200 mg 172.07 45 71.31
Cefixime Kee Pharma Axim-O 200 mg 180 47.84 88
tablet 4
Cefixime Micro Labs Ltd Rite O Cef 122.15 33.92 97.72
200 mg tablet 4
Cefixime Reliance Formula- Efoxim 200 mg 172.07 47.84 137.66
Cefixime Leo Cefilife 200 mg 115.21 33.92 92.17
Cefixime Divine Lifecare Oxim 200 mg 112.37 33.92 89.9
Pvt Ltd tablet 4
Cefixime Cachet Pharma- Traxol O 200 mg 111.33 33.92 89.07
Cefixime Trident Cixi 200 mg tab- 141.25 45 106.2
Cefixime Rkm Health Care R Cefi 200 mg 264 84.8 160
tablet 10
Cefixime Indica Laborato- Cf Xim 200 mg 105 33.92 84
ries Pvt. Ltd. tablet 4
(continued)
266 Appendix

Cefixime Indswift Laborato- Agicef 200 mg 245 84.8 32.4
ries Ltd. tablet 10
Cefixime Divine Lifecare Oxim 200 mg 130 45 89.9
Pvt Ltd tablet 4
Cefixime Divine Lifecare Oxim 200 mg 130 45 99.05
Pvt Ltd tablet 4
Cefixime Calibar Safix 200 mg 130 45 100.1
Pharmaceuticals tablet Dt 4
Cefixime Calibar Safix 200 mg 125.12 45 90.86
Cefixime Calibar Safix 200 mg 125.12 45 100.1
Cefixime Dial Pharmaceuti- Maxi D 200 mg 120 45 69.63
cals Pvt. Ltd. tablet 4
Cefixime Cipla Ltd. Cefix 200 mg 118.13 45 39
tablet 4
Cefixime Cipla Ltd. Cefix 200 mg 118.13 45 37.94
tablet 4
tablet 4
Cefixime Medley Cefo (Medley) 89 33.92 68.52
Pharmaceuticals 200 mg tablet 4
tablet 4
tablet 4
Cefixime Cipla Ltd. Cefix 200 mg 125.51 47.84 38.5
tablet 4
tablet 4
(continued)
Appendix 267

Cefixime Dial Pharmaceuti- Maxi D 200 mg 117.13 45 93.71
Cefixime Dial Pharmaceuti- Maxi D 200 mg 117.13 45 91.71
Cefixime Dial Pharmaceuti- Maxi D 200 mg 123.81 47.84 91.71
200 mg tablet 4
tablet 4
tablet 4
tablet 4
Cefixime Abbott Healthcare Cefi Od (Npil) 104.8 42.4 83.84
Pvt. Ltd 200 mg tablet 5
tablet 4
tablet 4
tablet 4
tablet 4
Cefixime Alembic Ltd Cifadin 200 mg 118.1 47.84 45
tablet 4
Cefixime Divine Lifecare Oxim 200 mg 118 47.84 89.9
Pvt Ltd tablet 4
Cefixime Dial Pharmaceuti- Maxi D 200 mg 118 47.84 91.71
200 mg tablet 4
200 mg tablet 4
Cefixime Micro Labs Ltd Rite O Cef 110.67 45 88.54
200 mg tablet 4
200 mg tablet 4
Cefixime Unicure India Pvt Fiximo 200 mg 81.25 33.92 65
Ltd tablet 4
Cefixime Vhb Life Sciences Focimel 200 mg 200.9 84.8 160.72
Inc tablet 10
200 mg tablet 4
(continued)
268 Appendix

200 mg tablet 4
Cefixime Cachet Pharma- Traxol O 200 mg 105.9 45 81.39
Cefixime Divine Lifecare Oxim 200 mg 112.37 47.84 89.9
Pvt Ltd tablet 4
Cefixime Rkm Health Care R Cefi 200 mg 264 112.5 160
tablet 10
Cefixime Indica Laborato- Cf Xim 200 mg 105 45 67.81
Cefixime Indica Laborato- Cf Xim 200 mg 105 45 84
Cefixime Leo Cefilife 200 mg 115.21 49.68 92.17
200 mg tablet 4
Cefixime Apex Laboratories Nufix 200 mg 195 84.8 156
Ltd. tablet 10
Cefixime Kee Pharma Axim-O 200 mg 110 47.84 88
tablet 4
Cefixime Indswift Laborato- Excef 200 mg 102 45 86.55
ries Ltd. tablet 4
Cefixime Neuron Pharma Nurocef 200 mg 115 50.88 87.62
(P) Ltd tablet 6
Cefixime Lupin Ltd Lupicef-O 250 112.5 79.38
200 mg tablet 10
Cefixime Lupin Ltd Ximeceff 200 mg 250 112.5 70
tablet 10
Cefixime Elder Pharmaceu- Zoftax O 200 mg 250 112.5 60
ticals Ltd tablet Dt 10
Cefixime Mapra Laborato- Taxone O 109.88 50.88 84.58
ries Pvt. Ltd 200 mg tablet 6
(continued)
Appendix 269

Cefixime Regalia Pharma- Receft O 200 mg 180 84.8 144
ceuticals (I) Pvt tablet 10
Ltd
Cefixime Lupin Ltd Ximeceff 200 mg 250 119.6 70
tablet 10
Cefixime Lupin Ltd Lupicef-O 250 119.6 79.38
200 mg tablet 10
Cefixime Zydus Cadila Raxim O 200 mg 235 112.5 40
tablet 10
Cefixime Zydus Cadila Raxim O 200 mg 235 112.5 188
tablet 10
Cefixime Zydus Cadila Ceefix 200 mg 235 112.5 45
tablet 10 X 10
Cefixime Psychotropics Omnapil 200 mg 235 112.5 39
India Ltd tablet 10
Cefixime Zydus Cadila Ceefix 200 mg 235 112.5 55
tablet 10 X 10
Cefixime United Biotech U Fixim 200 mg 98.81 47.84 79.05
(P) Ltd tablet 4
Cefixime Southshourne Oncef 200 mg 174.63 84.8 139.71
Corporation(India) tablet Dt 10
Cefixime United Biotech U Fixim 200 mg 98 47.84 79.05
(P) Ltd tablet 4
Cefixime Pfizer Ltd Vibazime 119 59.36 90.66
200 mg tablet Dt
7
Cefixime Pfizer Ltd Vibazime 119 59.36 91.59
200 mg tablet Dt
7
Cetirizine Serve Cetree 10 mg 216 18.1 7.99
Cetirizine Shrinivas Gujarat Ceday (Hiquem 130 18.1 12.58
Laboratories Pvt Lab) 10 mg tablet
Ltd 10
Ltd 10
Ltd 10
(continued)
270 Appendix

Ltd 10
Cetirizine Intas Pharmaceuti- Intazin 10 mg 125.5 19.2 1.6
cals Ltd tablet 10
Cetirizine Ramose Laborato- Suhit Cold 10 mg 49 19.9 38.88
Cetirizine Ramose Laborato- Suhit Cold 10 mg 49 19.9 38.89
Cetirizine Ramose Laborato- Suhit Cold 10 mg 48.61 19.9 38.89
Cetirizine Ramose Laborato- Suhit Cold 10 mg 48.6 19.9 38.88
Cetirizine Sun Pharma Labo- Cetrizet 10 mg 44 18.1 33.88
ratories Ltd. tablet 10
Cetirizine Cipla Ltd. Alerid 10 mg 43 18.1 32.76
tablet 10
Cetirizine Glaxosmithkline Cetzine 10 mg 357.12 153 285.7
Ltd.
Cetirizine Jenburkt Pharma- Allerzine 10 mg 35 15.3 26.67
Cetirizine Alkem Laborato- Cetiriz 10 mg 41.25 18.1 15.61
ries Ltd. tablet 10
Cetirizine Alkem Laborato- Cetiriz 10 mg 41.25 18.1 31.76
ries Ltd. tablet 10
Cetirizine Indoco Remedies Triz 10 mg tablet 39.5 18.1 30.41
Ltd 10
Cetirizine Indoco Remedies Triz 10 mg tablet 38.01 18.1 15.61
Ltd 10
Cetirizine Cipla Ltd. Cetcip 10 mg 38 18.1 2.35
tablet 10
Cetirizine Unichem Labora- Zyncet 10 mg 38 18.1 28.96
tories Ltd tablet 10
Cetirizine Cipla Ltd. Cetcip 10 mg 38 18.1 3
tablet 10
tablet 10
tablet 10
Cetirizine An Pharmaceuti- Anzin 10 mg 32 15.3 24.46
cals Pvt.Ltd. tablet 10
Cetirizine Cadila Pharma- Cetrizine (Cadila 40 19.2 1.61
ceuticals Ltd Pharma) 10 mg
tablet 10
(continued)
Appendix 271

Cetirizine Glaxosmithkline Cetzine 10 mg 37.5 18.1 28.57
Ltd.
Cetirizine Glaxosmithkline Cetzine 10 mg 375 181 285.7
Ltd.
Cetirizine Glaxosmithkline Cetzine 10 mg 375 181 156
Ltd.
Cetirizine Dr. Reddys Labo- Zyrtec 10 mg 37.3 18.1 28.72
ratories Ltd tablet 10
Cetirizine Ranbaxy Labora- Hisnofil 10 mg 36.92 18.1 29.54
Cetirizine Bayer Pharmaceu- Incid L 10 mg 36.72 18.1 27.98
ticals Pvt. Ltd. tablet 10
Cetirizine Bayer Pharmaceu- Incid L 10 mg 36.72 18.1 15.2
Cetirizine Micro Labs Ltd Allercet 10 mg 36.5 18.1 27.81
tablet 10
Cetirizine Micro Labs Ltd Allercet 10 mg 36.5 18.1 29.71
tablet 10
Chlorpheniramine Inga Laboratories Ingahist 4 mg 27.85 0.8514 22.35
Pvt. Ltd. tablet 10
Chlorpheniramine Inga Laboratories Ingahist 4 mg 29.5 1 22.72
Pvt. Ltd. tablet 10
Pvt. Ltd. tablet 10
Pvt. Ltd. tablet 10
Pvt. Ltd. tablet 10
Pvt. Ltd. tablet 10
Pvt. Ltd. tablet 10
Pvt. Ltd. tablet 10
Pvt. Ltd. tablet 10
Pvt. Ltd. tablet 10
Ciprofloxacin Shreya Life Sci- Cipdose 500 mg 595 38.6 16.67
ences Pvt. Ltd tablet 10
Ciprofloxacin Micro Labs Ltd Ciptab 500 mg 62.16 13.2 49.73
tablet 4
Ciprofloxacin Stanford Winflox 250 mg 52.5 16.2 42
Laboratories tablet 10
(continued)
272 Appendix

Ciprofloxacin Ranbaxy Labora- Cifran Od 50.05 16.5 38.13
tories Ltd 500 mg tablet 5
Ciprofloxacin Ranbaxy Labora- Cifran 250 mg 59.8 20.2 45.56
Ciprofloxacin Ranbaxy Labora- Cifran 250 mg 59.8 21 45.56
Ciprofloxacin Cipla Ltd. Ciplox 250 mg 54.79 20.2 42.18
tablet 10
Ciprofloxacin Leben Laborato- Ciproleb 500 mg 61.79 23.16 30.66
ries Pvt.Ltd tablet 6
Ciprofloxacin Sh Pharmaceuti- Ciprosol 500 mg 85.35 33 68.28
cals Ltd tablet 10
Ciprofloxacin Cipla Ltd. Ciplox 500 mg 93.36 38.6 71.88
tablet 10
Ciprofloxacin Numed Floxmed 500 mg 44.55 19.3 35.64
tablet 5
Ciprofloxacin Aglowmed Phar- Cifomed 250 mg 37.34 16.2 29.95
maceuticals Ltd. tablet 10
Ciprofloxacin Numed Floxmed 500 mg 43.68 19.3 35.64
tablet 5
Ciprofloxacin Dr. Reddys Labo- Ciprolet 250 mg 35.35 16.2 29.02
Ciprofloxacin Leben Laborato- Ciproleb 500 mg 50 23.16 30.66
Ciprofloxacin Taurus Laborato- Taurcip 250 mg 34.42 16.2 27.54
ries Pvt Ltd tablet 10
Ciprofloxacin Biochem Pharma- Biocip 250 mg 33.75 16.2 27.1
ceutical Inds tablet 10
Ciprofloxacin Stadmed Pvt. Ltd Cfx 500 mg tab- 80 38.6 60.32
let 10
Ciprofloxacin Apex Laboratories Ciprobex 250 mg 41 20.2 21.68
Ltd. tablet 10
Ciprofloxacin Cipla Ltd. Ciplox Od 40.53 20.05 8.57
500 mg tablet 5
(continued)
Appendix 273

Ciprofloxacin Bayer Pharmaceu- Baycip 250 mg 32.5 16.2 26.21
Ciprofloxacin Biochem Pharma- Biocip 500 mg 66 33 52.8
ceutical Inds tablet 10
Ciprofloxacin Canvarzys Cefobang Cv 186 9.72 143.34
Ciprofloxacin Canvarzys Cefobang Cv 179.17 12.12 143.34
Ciprofloxacin Canvarzys Cefobang Cv 179.17 12.6 143.34
Clopidogrel Sanofi India Ltd. Plavix 75 mg 3231.36 280.84 2461.99
tablet 28
Clopidogrel Sanofi India Ltd. Plavix 75 mg 3231.36 280.84 242.1
tablet 28
Clopidogrel Psychotropics Pilogrel 75 mg 438.41 64.4 16
India Ltd tablet 10
Clopidogrel Usv Ltd Clopigrel 75 mg 235.75 100.3 179.62
tablet 10
Clopidogrel Usv Ltd Clopigrel 75 mg 235.75 100.3 86.47
tablet 10
Clopidogrel Zydus Cadila Clopidogrel 235.75 100.3 179.62
75 mg tablet 10
Dexamethasone Cadila Pharma- Demisone 0.5 mg 578.12 42 462.5
Diazepam Lupin Ltd Placidox 5 mg 38 13.2 29.26
tablet 10
Diazepam Micro Labs Ltd Microdep 5 mg 35.5 13.2 28.71
tablet 10
Diazepam Lupin Ltd Placidox 5 mg 33.75 13.2 29.26
tablet 10
Diazepam Abbott Healthcare Valium 5 mg 33.21 13.2 11.38
Pvt. Ltd tablet 10
Pvt. Ltd tablet 10
tablet 10
tablet 10
Pvt. Ltd tablet 10
tablet 10
(continued)
274 Appendix

Diazepam Micro Labs Ltd Microdep 5 mg 32.5 14 26.48
tablet 10
tablet 10
tablet 10
Diazepam Ranbaxy Labora- Calmpose 5 mg 29 13.2 22.1
tablet 10
tablet 10
tablet 10
Diazepam Ranbaxy Labora- Calmpose 5 mg 138.12 66 110.5
Diclofenac Ranbaxy Labora- Volini 50 mg 118 20.7 11.07
Diclofenac Novartis India Ltd Neuroflam 50 mg 86.08 17.7 68.87
tablet 10
Diclofenac Novartis India Ltd Neuroflam 50 mg 99 20.7 75.43
tablet 10
Diclofenac Kivi Labs Ltd Topac (Kivi) 90.2 19.5 16.81
50 mg tablet 10
50 mg tablet 10
50 mg tablet 10
tablet 10
tablet 10
50 mg tablet 10
tablet 10
Diclofenac Lark Laboratories Larfen 50 mg 80.58 21.5 64.47
Ltd tablet 10
Diclofenac Zydus Cadila Activa 50 mg 60.62 17.7 48.5
tablet 10
Diclofenac Zydus Cadila Activa 50 mg 61 19.5 42.44
tablet 10
tablet 10
tablet 10
(continued)
Appendix 275

tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
Diclofenac Zydus Cadila Activa 50 mg 62 21.5 44
tablet 10
tablet 10
tablet 10
Diclofenac P &B Laboratories Dilofen 50 mg 56.6 21.5 43.2
Pvt Ltd tablet Sr 10
Diclofenac Zydus Cadila Inac 50 mg tablet 18.55 7.08 14.43
4
Diclofenac P &B Laboratories Dilofen 50 mg 54 20.7 41.02
tablet 10
tablet 10
Diclofenac P &B Laboratories Dilofen 50 mg 54 21.5 41.02
4
Diclofenac Dr. Reddys Labo- Supanac 50 mg 45.5 19.5 35.03
Diclofenac Dr. Reddys Labo- Supanac 50 mg 45.5 19.5 35.26
4
(continued)
276 Appendix

4
4
4
4
4
Diclofenac Zydus Cadila Inac 50 mg tablet 16.82 7.8 13
4
4
Diclofenac Novartis India Ltd Voveran 50 mg 41.7 19.5 32
tablet Dt 10
Diclofenac Novartis India Ltd Voveran 50 mg 41.6 19.5 31.7
tablet Dt 10
Diclofenac Novartis India Ltd Voveran D 41.6 19.5 31.7
50 mg tablet Dt
10
4
Diclofenac Novartis India Ltd Voveran D 39.62 19.5 16.81
50 mg tablet Dt
10
4
4
4
Diethylcarbamazine Pfizer Ltd Hetrazan 50 mg 32 5 2.81
tablet 10
Diethylcarbamazine Glaxosmithkline Banocide 50 mg 264.75 47 211.8
Ltd.
Ltd.
Ltd.
Ltd.
(continued)
Appendix 277

Ltd.
Ltd.
Ltd.
Ltd.
Ltd.
Diethylcarbamazine Glaxosmithkline Banocide 50 mg 208 52 166.4
Ltd.
Ltd.
Ltd.
Diethylcarbamazine Glaxosmithkline Banocide 50 mg 12.75 4.7 8.11
Ltd.
Ltd.
Diethylcarbamazine Glaxosmithkline Banocide Forte 38.74 15 29.51
Ltd.
Diethylcarbamazine Glaxosmithkline Banocide Forte 39.7 15.6 30.24
Ltd.
Ltd.
Ltd.
Ltd.
Ltd.
(continued)
278 Appendix

Ltd.
Ltd.
Ltd.
Digoxin Novartis India Ltd Cardioxin 146.94 12.6 5.73
0.25 mg tablet 10
Digoxin Novartis India Ltd Cardioxin 146.94 12.6 123.43
0.25 mg tablet 10
Digoxin Astrum Healthcare Zigoxin 0.25 mg 71.5 13.4 12
Pvt. Ltd. tablet 10
Diltiazem Modi Mundi Dilcontin 60 mg 101.15 47.9 77.88
Pharma Pvt Ltd tablet 10
Domperidone Veritaz Healthcare Revert 10 mg 110 22.4 77.2
Ltd tablet 10
Domperidone Veritaz Healthcare Revert 10 mg 110 24 79.63
Ltd tablet 10
Domperidone Veritaz Healthcare Revert 10 mg 96.48 22.4 77.2
Ltd tablet 10
Domperidone Veritaz Healthcare Revert 10 mg 99.53 24 79.63
Ltd tablet 10
Ltd tablet 10
Ltd tablet 10
Ltd tablet 10
Ltd tablet 10
Domperidone Veritaz Healthcare Revert 10 mg 65.52 22.6 52.42
Ltd tablet 10
Domperidone Veritaz Healthcare Revert 10 mg 68 24 52.42
Ltd tablet 10
Ltd tablet 10
Domperidone Unichem Labora- Unistal 10 mg 58 22.4 44.64
Domperidone Janssen Motilium M 51.34 22.6 19.46
10 mg tablet 10
Domperidone Janssen Gastractiv 10 mg 51.34 22.6 19.46
tablet 10
(continued)
Appendix 279

Domperidone Janssen Gastractiv 10 mg 51.34 22.6 39.53
tablet 10
10 mg tablet 10
Domperidone Unichem Labora- Unistal 10 mg 53.85 24 41.47
Domperidone Unichem Labora- Unistal 10 mg 55.8 24.9 44.64
10 mg tablet 30
Domperidone Unichem Labora- Unistal 10 mg 49 24 37.72
Doxycycline Sun Pharma Labo- Doxy Plus 55 9.4 44
ratories Ltd. 100 mg tablet 10
Doxycycline Sun Pharma Labo- Doxy Plus 57.75 10 44
Doxycycline Sun Pharma Labo- Doxy Plus 57.75 10.4 44
Doxycycline Dr. Reddys Labo- Doxt 100 mg 35.1 6.58 12.93
Doxycycline Euphoric Pharma- Doxyric 100 mg 49.85 9.4 38.4
ceuticals (P) Ltd tablet 10
Doxycycline Sun Pharma Labo- Doxy Plus 55 10.4 44
Doxycycline Euphoric Pharma- Doxyric 100 mg 50 10 38.38
Doxycycline Euphoric Pharma- Doxyric 100 mg 50 10 38.4
Doxycycline Euphoric Pharma- Doxyric 100 mg 49.85 10 38.38
Doxycycline Octane Biotech Doc Dr 100 mg 49.5 10 39.6
tablet Dr 10
Doxycycline Octane Biotech Doc Dr 100 mg 49.5 10 39.66
tablet Dr 10
Doxycycline Cipla Ltd. Doxicip 100 mg 36 7.52 8.75
tablet 8
(continued)
280 Appendix

Doxycycline Octane Biotech Doc Dr 100 mg 49.57 10.4 39.66
tablet Dr 10
Doxycycline Octane Biotech Doc Dr 100 mg 49.5 10.4 39.6
tablet Dr 10
Doxycycline Intas Pharmaceuti- Doxitas 100 mg 33.5 8 13.93
cals Ltd tablet 8
Doxycycline Sun Pharma Labo- Doxy Plus 37.75 9.4 36.57
Doxycycline Bennet Pharma- Nab 100 mg tab- 34.5 9.4 27.6
ceuticals Limited let 10
Doxycycline Bennet Pharma- Nab 100 mg tab- 34.5 10 26.29
Doxycycline Bennet Pharma- Nab 100 mg tab- 34.5 10 27.6
Doxycycline Ronak Labs R Dox 100 mg 34 10 27.2
tablet 10
Doxycycline Ronak Labs R Dox 100 mg 33.48 10 24.8
tablet 10
Doxycycline Ronak Labs R Dox 100 mg 34 10.4 27.2
tablet 10
Doxycycline Lancer Pharma- Lytedox 100 mg 31.76 10.4 25.41
ceuticals Pvt. Ltd tablet 10
Doxycycline Dr. Reddys Labo- Doxt 100 mg 15.75 6.58 12.93
Doxycycline Intas Pharmaceuti- Doxitas 100 mg 17.41 8 13.93
cals Ltd tablet 8
Doxycycline Macleods Pharma- Revidox 100 mg 7.85 3.76 6.73
ceuticals Pvt.Ltd tablet 4
Ethinylestradiol Organon (India) Lynoral 0.01 mg 44.5 21.2 33.9
Ltd tablet 10
Ethinylestradiol Organon (India) Lynoral 0.01 mg 44.5 21.2 17.8
Ltd tablet 10
(continued)
Appendix 281

Fluconazole Swiss Pharma Pvt. Flucovar 150 mg 150 15.36 7.88
Ltd tablet 1
Fluconazole Axon Health Care Flz 150 mg tablet 100 15.36 24.82
Ltd 1
Fluconazole Pasteur Laborato- Floret 150 mg 80 14.45 12.81
Fluconazole Pasteur Laborato- Floret 150 mg 80 14.45 12.87
Fluconazole Axon Health Care Flz 150 mg tablet 31.02 10.99 24.82
Ltd 1
Fluconazole Cipla Ltd. Fluka 150 mg 40 14.45 4.5
tablet 1
Fluconazole Cipla Ltd. Fluka 150 mg 40 14.45 5
tablet 1
Fluconazole Zydus Cadila Fusys 200 mg 192.38 69.72 153.91
tablet 4
Fluconazole Perk Pharma Hinzole 150 mg 29 10.99 21.99
tablet 1
Fluconazole Biochem Pharma- Fluzol (Biochem) 38 14.45 3.7
ceutical Inds 150 mg tablet 1
Fluconazole Biochem Pharma- Fluzol (Biochem) 38 14.45 12
Fluconazole Windlas Biotech Canawar 150 mg 40 15.36 9.58
Ltd tablet 1
Fluconazole Axon Health Care Flz 150 mg tablet 39 15.36 24.82
Ltd 1
Fluconazole Intas Pharmaceuti- Fcn 150 mg tab- 36.5 14.45 3.5
cals Ltd let 1
Fluconazole Artel Laboratories Floz 150 mg tab- 27.73 10.99 22.19
let 1
Fluconazole Cipla Ltd. Fungicip 150 mg 36.25 14.45 3.3
tablet 1
Fluconazole Cipla Ltd. Fungicip 150 mg 36.25 14.45 4
tablet 1
tablet 1
tablet 1
Fluconazole Cadila Pharma- Fluzon 150 mg 38 15.36 3.5
Fluconazole Biochem Pharma- Fluzol (Biochem) 38 15.36 3.7
Fluconazole Prism Lifescience Odcan 150 mg 26.92 10.99 21.54
tablet 1
Fluconazole Hegde & Hegde Fzhh 150 mg 35 14.45 26.67
tablet 1
(continued)
282 Appendix

Fluconazole Hegde & Hegde Fzhh 150 mg 35 14.45 11.01
tablet 1
Fluconazole Elder Pharmaceu- Fluzant 150 mg 34.51 14.45 4.77
ticals Ltd tablet 1
tablet 1
Fluconazole Cipla Ltd. Fungicip 150 mg 36.25 15.36 4
tablet 1
tablet 1
tablet 1
Fluconazole Galpha Laborato- Flucan 150 mg 34 14.45 6
ries Ltd tablet 1
Fluconazole Psychotropics Myconorm F 36 15.36 3
India Ltd 150 mg tablet 1
Fluconazole Lupin Ltd Flucalup 150 mg 33.75 14.45 3.5
tablet 1
Fluconazole Lupin Ltd Flucalup 150 mg 33.75 14.45 5
tablet 1
Fluconazole Fdc Ltd. Zocon 150 mg 33.6 14.45 25.87
tablet 1
Fluconazole Biostrass Health Cantras 150 mg 100 43.96 76.19
Sciences tablet 4
Fluconazole Elder Pharmaceu- Fluzant 150 mg 34.51 15.36 4.77
ticals Ltd tablet 1
tablet 1
Fluconazole Maneesh Pharma- Flucofit 150 mg 32 14.45 11.9
Fluconazole Novartis India Ltd Flucess 150 mg 32 14.45 3.95
tablet 1
Fluconazole Zydus Cadila Flugee 150 mg 32 14.45 5
tablet 1
tablet 1
Fluconazole Zydus Cadila Fungo 150 mg 32 14.45 12
tablet 1
Fluconazole Micro Labs Ltd Nucon 150 mg 32 14.45 14.58
tablet 1
tablet 1
Fluconazole Zydus Cadila Fungo 150 mg 32 14.45 14.5
tablet 1
Fluconazole Zydus Cadila Flugee 150 mg 32 14.45 3.5
tablet 1
(continued)
Appendix 283

Fluconazole Novartis India Ltd Flucess 150 mg 32 14.45 4
tablet 1
tablet 1
tablet 1
tablet 1
Fluconazole Lupin Ltd Flucalup 31.95 14.45 4
(Alu/Alu)
150 mg tablet 1
tablet 1
Fluconazole Alembic Ltd Alflucoz 150 mg 31.75 14.45 4.85
tablet 1
tablet 1
tablet 1
Fluconazole Serve Fluco (Serve) 62.86 28.9 50.29
Pharmaceuticals 150 mg tablet Dt
2
Fluconazole Zuventus Tucanozol 34.28 15.95 27.43
Healthcare Ltd 150 mg tablet 1
tablet Dt 4
Fluconazole Dr. Reddys Labo- Flustan 150 mg 32.77 15.36 26.22
Fluconazole Cure Quick Fulcure 150 mg 30.37 14.45 22.4
Fluconazole Wockhardt Ltd Funaz 150 mg 30.34 14.45 4
tablet 1
Fluconazole Wockhardt Ltd Funaz 150 mg 30.34 14.45 3
tablet 1
Fluconazole Zydus Cadila Fungo 150 mg 32 15.36 12
tablet 1
tablet 1
tablet 1
tablet 1
(continued)
284 Appendix

Fluconazole Leeford Flumet (Leeford) 32 15.36 3.38
Healthcare 150 mg tablet 1
tablet 1
tablet 1
Fluconazole Leeford Flumet (Leeford) 32 15.36 3.63
Fluconazole Leeford Flumet (Leeford) 32 15.36 4
tablet 1
tablet 1
tablet 1
tablet 1
Fluconazole Ranbaxy Labora- Stefazol 150 mg 31.95 15.36 4
tories Ltd tablet 1
Fluconazole Ranbaxy Labora- Stefazol 150 mg 31.95 15.36 3
tories Ltd tablet 1
Fluconazole Ranbaxy Labora- Stefazol 150 mg 31.95 15.36 3.78
tories Ltd tablet 1
Fluconazole Dr. Reddys Labo- Flustan 150 mg 31.95 15.36 26.22
tablet 1
Fluconazole Alembic Ltd Alflucoz 150 mg 31.75 15.36 5
tablet 1
Fluconazole Cure Quick Fulcure 150 mg 29.79 14.45 22.4
Fluconazole Cadila Pharma- Fluzon 150 mg 29.64 14.45 3.5
Fluconazole Cadila Pharma- Fluzon 150 mg 29.64 14.45 4
Fluconazole Serve Fluco (Serve) 62.86 30.72 50.29
Pharmaceuticals 150 mg tablet Dt
2
Fluconazole Coxswain Fluty 150 mg 22.28 10.99 17.83
Healthcare tablet 1
Fluconazole Novartis India Ltd Flucess 150 mg 32 15.95 4
tablet 1
Folic Acid Arvind Remedies Megafit 5 mg 255 14.6 10.78
Ltd. tablet 10
Ltd. tablet 10
(continued)
Appendix 285

Folic Acid Triton Health Care Folistar 5 mg 145 11.5 101.75
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Folic Acid Zydus Cadila Folly 5 mg tablet 140 11.5 112
10
Folic Acid Triton Health Care Folistar 5 mg 128.66 11.5 101.75
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Pvt Ltd tablet 10
Folic Acid Arvind Remedies Megafit 5 mg 122.55 15.2 98.04
Ltd. tablet 10
Folic Acid Nouveau Medica- Folmet 5 mg tab- 72.5 11.5 58
ment Pvt Ltd let 10
Folic Acid Micro Labs Ltd Folfit 5 mg tablet 70 11.5 53.33
10
Folic Acid P &B Laboratories F 5 5 mg tablet 64.78 11.5 51.84
Pvt Ltd 10
Pvt Ltd 10
Pvt Ltd 10
10
10
(continued)
286 Appendix

Folic Acid Intas Pharmaceuti- Folic Acid 5 mg 60 11.5 0.97
cals Ltd tablet 10
10
10
10
Folic Acid Micro Labs Ltd Folfit 5 mg tablet 66.66 13.7 53.33
10
Ltd. tablet 10
10
Folic Acid Alembic Ltd Folinal 5 mg tab- 54.28 11.5 43.43
let 10
Folic Acid Vance & Health Trifol 5 mg tablet 60 13.7 15.23
Pharmaceuticals 10
Ltd
Folic Acid Intas Pharmaceuti- Folitas 5 mg tab- 56.46 13.7 45.17
cals Ltd let 10
Pharmaceuticals 10
Ltd
Folic Acid Intas Pharmaceuti- Folitas 5 mg tab- 60 14.6 45.17
cals Ltd let 10
Folic Acid Intas Pharmaceuti- Folitas 5 mg tab- 56.46 14.6 45.17
cals Ltd let 10
Pvt Ltd 10
let 10
Folic Acid Cipla Ltd. Vitafol(Cip) 45.85 14.6 9
5 mg tablet 10
5 mg tablet 10
Folic Acid Cipla Ltd. Vitafol(Cip) 45.85 14.6 2.94
5 mg tablet 10
Folic Acid Nouveau Medica- Folmet 5 mg tab- 36 11.5 27.43
ment Pvt Ltd let 10
let 10
Folic Acid Cipla Ltd. Vitafol(Cip) 45.85 15.2 9.5
5 mg tablet 10
5 mg tablet 10
(continued)
Appendix 287

5 mg tablet 10
let 10
let 10
let 10
let 10
let 10
let 10
let 10
Pvt Ltd 10
let 10
let 10
Pvt Ltd 10
Folic Acid Vance & Health Trifol 5 mg tablet 31.5 11.5 15.38
Pharmaceuticals 10
Ltd
let 10
let 10
5 mg tablet 10
ment Pvt Ltd let 10
Folic Acid Emcure Pharma- Emfolic 5 mg 30.15 11.5 22.97
let 10
ment Pvt Ltd let 30
ment Pvt Ltd let 30
ment Pvt Ltd let 30
Folic Acid Mankind Pharma- Folimust 5 mg 29.9 11.5 9.2
ceuticals Ltd. tablet 10
(continued)
288 Appendix

Pvt Ltd 10
Pvt Ltd 10
Pvt Ltd 10
Pvt Ltd 10
5 mg tablet 10
ment Pvt Ltd let 10
Pharmaceuticals 10
Ltd
ment Pvt Ltd let 10
Folic Acid Pfizer Ltd Folvite 5 mg tab- 80.8 34.5 62.21
let 30
Folic Acid Synokem Pharma- Folik 5 mg tablet 26.4 11.5 20.38
ceuticals Ltd 10
ceuticals Ltd 10
Folic Acid Pfizer Ltd Folvite 5 mg tab- 77.76 34.5 29.27
let 30
Folic Acid Bestochem For- Fh 12 5 mg tablet 25.9 11.5 20
mulations (I) Ltd 10
Folic Acid Bestochem For- Fh 12 5 mg tablet 25.9 11.5 9.2
ceuticals Ltd 10
Folic Acid Bestochem For- Fh 12 5 mg tablet 25.9 11.5 19.73
ment Pvt Ltd let 30
ment Pvt Ltd let 30
(continued)
Appendix 289

Folic Acid Vance & Health Trifol 5 mg tablet 31.5 14.6 15.23
Pharmaceuticals 10
Ltd
Griseofulvin Dr. Reddys Labo- Gris Od 250 mg 126 14.5 46.69
Griseofulvin Dr. Reddys Labo- Gris Od 250 mg 62.1 14.5 46.69
Hydrochlorothiazide Ordain Healthcare Thiazide 12.5 mg 21 9.700001 7.81
Pvt. Ltd tablet 10
Hydrochlorothiazide Ordain Healthcare Thiazide 12.5 mg 21 9.700001 16.15
Pvt. Ltd tablet 10
Hydrochlorothiazide Ordain Healthcare Thiazide 12.5 mg 21 9.700001 16
Pvt. Ltd tablet 10
Hydrochlorothiazide Usv Ltd Xenia 25 mg tab- 55 26.4 17.45
let 15
Hydroxychloroquine Maneesh Pharma- Fe Q 200 mg 425 56.4 327.22
Hydroxychloroquine Maneesh Pharma- Fe Q 200 mg 425 60 327.22
Hydroxychloroquine Maneesh Pharma- Fe Q 200 mg 425 62.3 327.22
Hydroxychloroquine Maneesh Pharma- Fe Q 200 mg 409.02 62.3 327.22
Hydroxychloroquine Zydus Cadila Zy Q 200 mg 150.54 55 115.87
tablet 10
Hydroxychloroquine Zydus Cadila Zy Q 200 mg 140.08 56.4 112.07
tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
tablet 10
Imatinib Mesylate Novartis India Ltd Glivac 400 mg 40000 2852.9 2683.3
tablet 10
(continued)
290 Appendix

Isoniazide Lupin Ltd Pyzina Kid 38.5 13.5 29.33
300 mg tablet 10
300 mg tablet 10
Isoniazide Lupin Ltd Pyzina Kid 38.5 14 29.33
300 mg tablet 10
300 mg tablet 10
300 mg tablet 10
Isosorbide Dinitrate Troikaa Pharma- Sorbidine 10 mg 160.58 6.9 130.55
Isosorbide-5- Jagsonpal Phar- Isotrate 20 mg 196 36.3 150.15
Mononitrate maceuticals Ltd tablet 10
Isosorbide-5- Jagsonpal Phar- Isotrate 20 mg 188.57 36.3 150.86
Leflunomide Sanofi India Ltd. Arava 10 mg 1560 453 390.52
tablet 30
Leflunomide Sanofi India Ltd. Arava 10 mg 1560 453 1248
tablet 30
Leflunomide Sanofi India Ltd. Arava 20 mg 2769.12 858.9 2215.3
tablet 30
Leflunomide Sanofi India Ltd. Arava 20 mg 2769.12 858.9 740.43
tablet 30
Leflunomide Zydus Cadila Rumalef 20 mg 436.71 181.3 336.14
tablet 10
Levo-Thyroxine Akumentis Euthyroid 99 4.44 75.43
(Synthetic) Healthcare Ltd 100 mcg tablet 4
Levo-Thyroxine Akumentis Sunthyroid 99 4.44 75.43
Levo-Thyroxine Akumentis Thyroweek 99 4.44 75.07
(continued)
Appendix 291

Levo-Thyroxine Alkem Laborato- Thyropil 126.5 11.8 88.89
(Synthetic) ries Ltd. 100 mcg tablet
10
10
10
Levo-Thyroxine Macleods Pharma- Thyonorm 147.84 30.3 112
(Synthetic) ceuticals Pvt.Ltd 50 mcg tablet 30
Levo-Thyroxine Macleods Pharma- Thyonorm 132.3 27.3 105.84
Levo-Thyroxine Macleods Pharma- Thyonorm 140 32.1 105.84
Levo-Thyroxine Intas Pharmaceuti- Lethyrox 118.47 33.3 28.26
(Synthetic) cals Ltd 100 mcg tablet
30
Levo-Thyroxine Intas Pharmaceuti- Lethyrox 50 mcg 107.07 30.3 24.1
(Synthetic) cals Ltd tablet 30
(continued)
292 Appendix

30
30
30
30
Levodopa + Torrent Pharma- Tidomet 43.37 20 33.04
Carbidopa ceuticals Ltd. 100/25 mg tablet
Cr 10
Levodopa + Torrent Pharma- Tidomet 43.07 20 36.18
Cr 10
Levodopa + Torrent Pharma- Tidomet 47.49 22.6 36.18
Cr 10
Cr 10
Cr 10
Lithium Psychotropics Manicarb 300 mg 30 15 13.54
India Ltd tablet Sr 10
Metformin Lupin Ltd Metkin 500 mg 118.75 15.6 95
tablet 10
Metformin Lupin Ltd Metkin 500 mg 118.75 16.6 95
tablet 10
(continued)
Appendix 293

Metformin Fourrts India Lab- Metfil 500 mg 67.71 15.6 54.17
oratories Pvt. Ltd tablet 10
Metformin Glenmark Phar- X-Met 500 mg 48 15.6 36.57
maceuticals Ltd. tablet Sr 10
Metformin Glenmark Phar- X-Met 500 mg 45.71 15.6 36.57
Metformin Abbott India Ltd. Obimet 500 mg 40 13.9 30.48
tablet Sr 10
Metformin Glenmark Phar- X-Met 500 mg 44.25 15.6 33.71
Metformin Abbott India Ltd. Obimet 500 mg 37.5 15.6 28.57
tablet Sr 10
tablet Sr 10
tablet Sr 10
tablet Sr 10
tablet Sr 10
Metformin Bal Pharma Diamet 500 mg 30 13.9 22.98
tablet Sr 10
Metformin Sanofi India Ltd. Cetapin Xr 33 15.6 25.41
500 mg tablet Sr
10
Metformin Merck Ltd Carbophage 33 15.6 25.41
500 mg tablet Sr
10
Metformin Finer Pharmaceu- Fagomet 500 mg 32.56 15.6 26.05
ticals Pvt Ltd tablet Sr 10
Metformin Shrinivas Gujarat Emline 500 mg 32.5 15.6 6.15
Ltd
Metformin Shreya Life Sci- Glycifit 500 mg 28.18 13.9 21.69
Metformin Shreya Life Sci- Glycifit 500 mg 28.18 13.9 21.59
Metformin Intas Pharmaceuti- Zomet 500 mg 27.88 13.9 21.46
cals Ltd tablet Sr 10
(continued)
294 Appendix

Metformin Sanofi India Ltd. Cetapin Xr 27.88 13.9 21.46
500 mg tablet Sr
10
500 mg tablet Sr
10
500 mg tablet Sr
10
Methotrexate Zydus Cadila Mexate 7.5 mg 73.2 23.96 38.35
tablet 2
tablet 2
tablet 2
tablet 2
Metoclopramide Lupin Ltd Promet 10 mg 250.98 10.8 200.79
tablet 10
Metoclopramide Lupin Ltd Promet 10 mg 250.98 11.5 200.79
tablet 10
Metoclopramide Adcock Ingram Reglan 10 mg 23.45 10.8 19.25
Healthcare Pvt Ltd tablet 10
Metoprolol Intas Pharmaceuti- Embeta Er 25 mg 115 28.8 88.1
cals Ltd tablet 10
cals Ltd tablet 10
cals Ltd tablet 10
Metoprolol Intas Pharmaceuti- Embeta Er 25 mg 105.5 37.3 81.2
cals Ltd tablet 10
Metronidazole Mapra Laborato- Sprot P 400 mg 20.21 7.5 16.17
ries Pvt. Ltd tablet 10
Metronidazole Jagsonpal Phar- Metronidazole 89.51 40 71.61
maceuticals Ltd (Jag) 200 mg
tablet 100
Misoprostol Zydus Cadila Cytolog 100 mcg 159.11 37.72 127.29
tablet 4
(continued)
Appendix 295

Nifedipine Cadila Pharma- Calnif Retard 126.07 11.3 12.2
Nifedipine Cadila Pharma- Calnif Retard 126.07 11.3 11.42
Nifedipine Merck Ltd Depicor 10 mg 32.5 14.2 12.52
tablet Sr 10
Nitrofurantoin Bharat Serums & Nitro F 100 mg 76.57 6.88 58.34
Vaccines Ltd tablet 1
Nitrofurantoin Bharat Serums & Nitro F 100 mg 75 6.88 60
Nitrofurantoin Bharat Serums & Nitro F 100 mg 75 6.88 58.34
Ondansetron Sun Pharma Labo- Zofer 8 mg tablet 152.88 36.24 122.31
ratories Ltd. 4
ratories Ltd. 4
ratories Ltd. 4
ratories Ltd. 4
Ondansetron Skymax Laborato- Prospect 4 mg 142 47.6 113.4
ries Ltd. tablet 10
Ondansetron Skymax Laborato- Prospect 4 mg 141.75 47.6 57.54
ries Ltd. tablet 10
Ondansetron Alkem Laborato- Ondem Of 4 mg 69 28.56 52.57
ries Ltd. tablet 6
Ondansetron Alkem Laborato- Ondem Of 4 mg 65.71 28.56 52.57
ries Ltd. tablet 6
ratories Ltd. 4
Ondansetron Alkem Laborato- Ondem Of 4 mg 69 30.36 52.57
ries Ltd. tablet 6
ries Ltd. tablet 6
Ondansetron Morepen Labora- Ondoc 4 mg tab- 100 47.6 5.8
tories Limited let 10
Ondansetron Morepen Labora- Ondoc 4 mg tab- 100 47.6 20
tories Limited let 10
Ondansetron Cipla Ltd. Emeset Od 4 mg 100 47.6 21
tablet 10
ries Ltd. tablet 6
ratories Ltd. 4
Ondansetron Neon Laboratories Neomit 4 mg 99 47.6 37
Ltd tablet 10
(continued)
296 Appendix

Ondansetron Neon Laboratories Neomit 4 mg 99 47.6 53.64
Ltd tablet 10
Ondansetron Cipla Ltd. Emset 4 mg tab- 98.44 47.6 75
let 10
Ondansetron Cipla Ltd. Emeset 4 mg 98.44 47.6 75
tablet 10
Ondansetron Cipla Ltd. Emeset Md 4 mg 97 47.6 20.75
tablet Md 10
Ondansetron Cipla Ltd. Emeset Md 4 mg 97 47.6 21
tablet Md 10
Ondansetron Cipla Ltd. Emset Md 4 mg 97 47.6 79.5
tablet 10
Ondansetron Cipla Ltd. Emset Md 4 mg 97 47.6 29.73
tablet 10
Ondansetron Cipla Ltd. Emeset Md 4 mg 97 47.6 24
tablet Md 10
Ondansetron Cachet Pharma- Emitino 4 mg 52.62 26.1 39.9
ceuticals Pvt Ltd tablet Md 6
Paracetamol Alkem Laborato- Paracetamol 700 9.4 2.4
ries Ltd. (Alkem) 500 mg
tablet 10
Paracetamol Alkem Laborato- Paracetamol 700 9.4 2.45
ries Ltd. (Alkem) 500 mg
tablet 10
Paracetamol Syncom Formula- Fabrimol 500 mg 575 9.4 2.65
tions (I) Limited tablet 10
Paracetamol Syncom Formula- Fabrimol 500 mg 575 9.4 2.89
tions (I) Limited tablet 10
Paracetamol Exotic Laborato- Eboo Plus 129.92 8.3 103.94
ries Pvt Ltd (Exotic Lab)
500 mg tablet 10
Paracetamol Exotic Laborato- Eboo Plus 135 9.4 104.14
500 mg tablet 10
500 mg tablet 10
500 mg tablet 10
Paracetamol Unireach Primosul 500 mg 115.06 8.3 92.05
500 mg tablet 10
(continued)
Appendix 297

500 mg tablet 10
500 mg tablet 10
Paracetamol Exotic Laborato- Eboo Plus 135 10 104.16
500 mg tablet 10
500 mg tablet 10
500 mg tablet 10
500 mg tablet 10
Paracetamol Unireach Primosul 500 mg 115.06 9.4 92.05
Paracetamol Bioguard Dolo Sp 500 mg 73.15 9.4 55
Organics Ltd. tablet 10
Paracetamol Bioguard Dolo Sp 500 mg 74.25 10 55
Paracetamol Bioguard Dolo Sp 500 mg 68.75 9.4 52.47
Paracetamol Dew Drops Lab Denim P (Dew 49.75 8.3 37.9
Drops) 500 mg
tablet 10
Paracetamol Symcox Research Flupra 500 mg 45 8.3 36
Lab P.Ltd tablet 10
(continued)
298 Appendix

Paracetamol Exotic Laborato- Eboo (Exotic 42.5 8.3 32.72
ries Pvt Ltd Lab) 500 mg tab-
let 10
Paracetamol Symcox Research Flupra 500 mg 50 10 36
Lab P.Ltd tablet 10
Paracetamol Symcox Research Flupra 500 mg 45.36 9.4 36.29
Lab P.Ltd tablet 10
Paracetamol Symcox Research Flupra 500 mg 45 9.4 36.29
Lab P.Ltd tablet 10
Lab P.Ltd tablet 10
Drops) 500 mg
tablet 10
Paracetamol Ronak Labs Cetcold 500 mg 38 8.3 30.48
tablet 10
Paracetamol Dew Drops Lab Denim P (Dew 45.25 10 34.48
Drops) 500 mg
tablet 10
Paracetamol Symcox Research Flupra 500 mg 45 10 36
Lab P.Ltd tablet 10
Drops) 500 mg
tablet 10
Drops) 500 mg
tablet 10
Drops) 500 mg
tablet 10
Drops) 500 mg
tablet 10
Lab P.Ltd tablet 10
Drops) 500 mg
tablet 10
Drops) 500 mg
tablet 10
let 10
Paracetamol Cipla Ltd. Actiflu 500 mg 38 9.4 6.9
tablet 10
tablet 10
(continued)
Appendix 299

tablet 10
Paracetamol Exotic Laborato- Eboo (Exotic 42 10.4 32.34
let 10
let 10
Paracetamol Exotic Laborato- Eboo (Exotic 39 10 30.03
let 10
tablet 10
let 10
let 10
let 10
Paracetamol Ronak Labs Cetcold 500 mg 38.1 10.4 30.48
tablet 10
tablet 10
tablet 10
let 10
Paracetamol Ronak Labs Cetcold 500 mg 35 10 30.48
tablet 10
Paracetamol Ronak Labs Cetcold 500 mg 35 10 28
tablet 10
Paracetamol Ronak Labs Cetcold 500 mg 35 10 23.6
tablet 10
Paracetamol Exotic Laborato- Eboo (Exotic 35 10 26.95
let 10
Paracetamol Novartis India Ltd Temfix 500 mg 35 10 7
tablet 10
Paracetamol Ronak Labs Cetcold 500 mg 35 10.4 28
tablet 10
Paracetamol Exotic Laborato- Eboo Spaz 27 8.3 21.6
500 mg tablet 10
(continued)
300 Appendix

Drops) 500 mg
tablet 10
Paracetamol Cipla Ltd. Parafast 500 mg 10.47 3.32 8.38
tablet 4
Paracetamol Cipla Ltd. Parafast 500 mg 11 3.76 8.38
tablet 4
Paracetamol Ronak Labs Cetcold 500 mg 29.5 10.4 23.6
tablet 10
Paracetamol Exotic Laborato- Eboo Spaz 28 10 21.6
500 mg tablet 10
500 mg tablet 10
tablet 4
Paracetamol Navil Laboratories C 37 500 mg 23 8.3 17.71
tablet 10
Paracetamol Cipla Ltd. Parafast 500 mg 11 4 8.38
tablet 4
500 mg tablet 10
tablet 4
500 mg tablet 10
500 mg tablet 10
tablet 4
tablet 4
500 mg tablet 10
Paracetamol Thrift Adwin 500 mg 19.75 8.3 15.8
Paracetamol Adcock Ingram Adcopara 3.8 1.66 2.93
Healthcare Pvt Ltd 500 mg tablet 2
tablet 10
Paracetamol Agron Remedies 37 C 500 mg 20.75 9.4 15.6
Pvt. Ltd. tablet 10
(continued)
Appendix 301

Paracetamol Navil Laboratories C 37 500 mg 21.83 10 16.17
tablet 10
Pvt. Ltd. tablet 10
Pvt. Ltd. tablet 10
Paracetamol Navil Laboratories C 37 500 mg 17.75 8.3 13.6
tablet 10
Paracetamol Dial Pharmaceuti- Peristop 500 mg 20 9.4 15.34
Paracetamol Glaxosmithkline Crocin Advance 30 14.1 23.31
Ltd.
Paracetamol Glaxosmithkline Crocin Advance 30 14.1 23.81
Ltd.
Paracetamol Panacea Biotec Tecpara 500 mg 19.8 9.4 15.09
Ltd tablet 10
Paracetamol Panacea Biotec Tecpara 500 mg 19.8 9.4 15.71
Ltd tablet 10
Paracetamol Navil Laboratories C 37 500 mg 21 10 16.17
tablet 10
Pvt. Ltd. tablet 10
tablet 10
Paracetamol Indoco Remedies Febrex 500 mg 18.87 9.4 14.53
Ltd tablet 10
Paracetamol Indoco Remedies Febrex 500 mg 18.87 9.4 12.16
Ltd tablet 10
Paracetamol Glaxosmithkline Crocin Advance 30 15 23.81
Ltd.
Paracetamol Glaxosmithkline Crocin Advance 30 15 23.31
Ltd.
Phenobarbitone Abbott Healthcare Gardenal 60 mg 76.68 32.8 61.35
Pvt. Ltd tablet 20
Pvt. Ltd tablet 20
Pvt. Ltd tablet 20
Phenobarbitone Medo Pharma Emgard 30 mg 20 9.3 15.33
tablet 10
Phenobarbitone Medo Pharma Emgard 30 mg 20 9.3 15.4
tablet 10
(continued)
302 Appendix

Phenobarbitone Medo Pharma Emgard 30 mg 19.25 9.3 7.84
tablet 10
Phenytoin Alkem Laborato- Phenykem 164.85 12.7 125.6
ries Ltd. 100 mg tablet 10
Phenytoin Mankind Pharma- Epiforce 100 mg 164.08 12.7 125.01
Phenytoin Mankind Pharma- Epiforce 100 mg 175 14.2 133.33
Phenytoin Alkem Laborato- Phenykem 143.75 14.2 115
(continued)
Appendix 303

Phenytoin Zydus Cadila Epsolin Er 192 47.1 147.83
100 mg tablet Er
30
Phenytoin Zydus Cadila Epsolin Er 168.42 42.6 134.74
100 mg tablet Er
30
Phenytoin Zydus Cadila Epsolin Er 175 45.3 134.74
100 mg tablet Er
30
100 mg tablet Er
30
100 mg tablet Er
30
100 mg tablet Er
30
100 mg tablet Er
30
Prednisolone Mankind Pharma- Nucort 5 mg tab- 272.7 5.8 127.43
ceuticals Ltd. let 10
Prednisolone Mankind Pharma- Nucort 5 mg tab- 159.28 6 127.43
Prednisolone Cipla Ltd. Predone 5 mg 36.25 5.5 29
tablet 10
Prednisolone Mankind Pharma- Nucort 20 mg 85 18.1 64.45
Prednisolone Mankind Pharma- Nucort 20 mg 85 18.3 64.76
Prednisolone Mankind Pharma- Nucort 20 mg 85 19 64.46
(continued)
304 Appendix

Prednisolone Mankind Pharma- Nucort 20 mg 80.95 18.3 64.76
Prednisolone Mankind Pharma- Nucort 20 mg 80.95 19 64.76
Prednisolone Admac Pharma Adred 20 mg 40 18.3 22.3
Ltd. tablet 10
Primaquine Leo Leoprime Forte 72 29.54 52.52
Primaquine Leo Leoprime Forte 65 27.72 52
Primaquine Leo Leoprime Forte 65.65 29.54 52.52
Primaquine Leo Leoprime Forte 65.65 30.66 52.52
Propranolol Mova Pharmaceu- Movalol 40 mg 59.9 27.2 30.4
Propranolol Mova Pharmaceu- Movalol 40 mg 54.9 27.2 30.4
Pyrazinamide Morepen Labora- Pyriza 750 mg 258.71 57.3 217.32
Quinine Troikaa Pharma- Quinax 300 mg 699.6 51 530
Quinine Ipca Laboratories Cinkona 300 mg 69.25 30.6 44.09
Pvt Ltd. tablet 6
Quinine Ipca Laboratories Cinkona 300 mg 69.25 30.6 52.76
Pvt Ltd. tablet 6
Salbutamol Raptakos, Brett & Durasal 4 mg 6.7 1.7 5.36
Co. Ltd. tablet 10
Co. Ltd. tablet 10
Co. Ltd. tablet 10
Salbutamol Cipla Ltd. Asthalin Sa 4 mg 5.9 1.7 4.54
tablet 10
Co. Ltd. tablet 10
Co. Ltd. tablet 10
(continued)
Appendix 305

Co. Ltd. tablet 10
tablet 10
Co. Ltd. tablet 10
Co. Ltd. tablet 10
tablet 10
Salbutamol Cipla Ltd. Asthalin 4 mg 15.26 5.1 11.75
tablet 30
Co. Ltd. tablet 10
tablet 30
tablet 30
tablet 30
tablet 30
tablet 30
tablet 30
tablet 30
tablet 30
tablet 30
Tamoxifen Astrazeneca Nolvadex 10 mg 201 43.5 153.14
Pharma India Ltd tablet 10
Trihexyphenidyl Sun Pharma Labo- Parkitane 2 mg 90.43 11.3 72.35
Trihexyphenidyl Sun Pharma Labo- Parkitane 2 mg 87 11.3 66.96
(continued)
306 Appendix

Trihexyphenidyl Mova Pharmaceu- Movahexy 2 mg 33.58 11.3 26.87
ticals Pvt Ltd tablet Md 10
Trihexyphenidyl Pfizer Ltd Pacitane 2 mg 31 13.6 11.53
tablet 10
tablet 10
Trihexyphenidyl Mova Pharmaceu- Movahexy 2 mg 33.58 15.1 26.87
ticals Pvt Ltd tablet Md 10
tablet 70
tablet 70
tablet 70
Source: NPPA, AIOCD, Author’s calculations

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India Studies in Business and Economics

More information about this series at http://www.springer.com/series/11234

ISSN 2198-0012 ISSN 2198-0020 (electronic)

Library of Congress Control Number: 2018945196

© Springer International Publishing AG, part of Springer Nature 2018

Printed on acid-free paper

Part I Historical Context and the Motivation for Regulation

Part II The Design of the 2013 DPCO Regulation

Part III The Impact of the 2013 DPCO

Part IV Enforcement and Compliance

Providing affordable access to essential medicines in developing countries remains a

© Springer International Publishing AG, part of Springer Nature 2018 1

medicines and considered invoking special powers to instruct pharmaceutical ﬁrms

By contrast, a study sponsored by the Organization of Pharmaceutical Producers

examines recent developments to strengthen price control regulation by expanding

© Springer International Publishing AG, part of Springer Nature 2018 11

exceptions to the price control regime by keeping newly developed medicines

2.2 Deregulation of Pharmaceutical Prices from the 1970s

Table 2.1 Overview of the DPCOs leading up to 2002

wholesale nationalization of the pharmaceutical industry, the introduction of a list of

The regulators in India attributed the shortage of essential medicines to inade-

manufactured formulations of the medicines in the scheduled category (Government

2.3 The Demand More Price Controls After 2002 Leading

The shift from protectionism to liberalization in the Indian pharmaceutical industry

Table 2.2 Chronology of events

2.3.2 2004–2005: Investigating Ways to Make Life-Saving

2.3.3 2006–2012: From 2006 to the 2012 National

calculated based on a new price control framework contained in the undisclosed

experts condemned the exclusion of certain medicines and the formulation-level

2.3.4 Amendments After the Implementation of the 2013

The Department of Pharmaceuticals notiﬁed the government’s decision to imple-

In this chapter, we address whether pharmaceutical price control regulations, intro-

3.2 Pharmaceuticals Are Credence Goods with High Search

We begin by describing the idiosyncratic features of the pharmaceutical industry that

© Springer International Publishing AG, part of Springer Nature 2018 33

To deepen the discussion on the competitiveness of the Indian pharmaceutical

3.3 Choice and Competition Are Limited in Local

The use of marketing practices to inﬂuence the prescription behavior of doctors

pharmaceutical companies such as Abbott, Bayer, GlaxoSmithKline, Roche, and

Nautiyal (2014b) reports that hospitals in collusion with wholesalers are

In summary, at each level in the Indian pharmaceutical industry, starting from

3.4 Evidence Indicates Leading Brands Are Also the Price

Table 3.1 Variation in prices within medicine markets

Source: AIOCD Pharmatrac (2011–2015)

We now restrict our analysis to price-controlled medicines and examine the

Table 3.3 (continued)

Table 3.3 (continued)

Table 3.3 (continued)

Table 3.3 (continued)

Table 3.3 (continued)

3.5 Evidence of High Trade Margins on Several Brands

Table 3.4 (continued)

Table 3.4 (continued)

Table 3.4 (continued)

Ciprolic 100 mg tablet 10 1.99 2.59 2.12 29.96 2.49

SKU share in PTR/Min

Lipigoal 10 mg tablet 10 3.23 3.86 6.23 19.44 2.29

SKU share in PTR/Min

Cetcip 10 mg tablet 10 0.3 3.47 0.72 1055 13.61