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[e-drug] drug prices and health insurance in India (2)

E-DRUG: drug prices and health insurance in India (2)

Dear all,

Little background exists about the MRP in India and price comparison in 
relation to International reference Price, MSH as mentioned by the moderator.

MRP is the Maximum Retail Price that is printed on each strip of 
tablet/capsules or bottle and injection in India. This MRP is set by the 
manufacturer and there is no regulation from government. Retail pharmacies sell 
the medicines at the MRP mentioned on the container.

The regulatory authority (National Pharmaceutical Pricing Authority) [See 
http://nppaindia.nic.in/index1eng.html moderator] fixes the price of 74 bulk 
drugs by a standard formula and for rest of the medicines there is no price 
regulation in India. It is believed that market forces will keep the prices 

In India we have conducted seven Medicine Price surveys according to WHO-HAI 
methodology and the prices of medicines were compared to international 
reference price, MSH prices are available on the net (available online at 

First study was done in 2003 in Rajasthan and prices of 36 essential medicines 
were surveyed. It was found that in private sector the median price of the 
lowest priced generic version of all the medicine surveyed was 1.83 times the 
MSH. For some medicine (lowest generic version available on the pharmacies) the 
price was more than four times the MSH price, these medicines were: albendazole 
(highest; 10.31times MSH), amoxicillin, amitryptyline, atenolol, diazepam, 
diclofenac, hydrochlorothiazide, and paracetamol.

Six other surveys were simultaneously conducted at six sites in 2004 and 
similar results were obtained. Synthesis paper for six surveys is published in 
Indian Journal of Medical Research and is available at:

The procurement price for government was found to be 0.27-0.48 times the MSH 
reference price. This shows the cost of medicines must be less than this.

A detailed price component study was conducted in February & March 2007 in 
Delhi in both public and private sector. This study revealed that MRP is set 
significantly higher than manufacturing cost. Retailers have 300 - 500 % mark 
ups on generic version of medicines. Trade schemes are also common for 
retailers and this practice also increases the margins for retailers.

These findings suggest even if manufacturers give their products at half the 
printed MRP, they will make good profit. Hope the manufacturer will supply all 
the good quality essential medicines for below poverty line population.

If you have any other query please do ask.


Anita Kotwani
Associate professor
Department of Pharmacology
V.P.Chest Institute
University of Delhi
Delhi 110007


1. http://erc.msh.org/
2. http://www.icmr.nic.in/ijmr/2007/may/0506.pdf
3. http://g.msn.com/8HMBENIN/2731??PS=47575

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