Edited by Daniel J. Gervais
Chapter 15: Pricing of drugs: wither fairness!
The focus of this chapter is on fair pricing of medicines – both patented and non-patented drugs. Fair price means the price that allows a reasonable return on investments in exchange for an affordable price. A reasonable price is not necessarily a low price. The term ‘fairness’ is an elusive term, at times it is ‘illusory’ too as neither the buyer nor the seller is fully satisfied with the consideration given or received by them and it is left to the State regulators to be the ultimate arbiter to decide the reasonableness of the price fixed by the inventor/manufacturer. Courts have a restrictive role in the pricing of products. They review the national strategies adopted in fixing prices but do not indulge in fixing the price. They can direct the government to replace the pricing strategy if found irrational. Similarly the competition authorities time and again have repeated that they do not see themselves as price regulators as they are not well placed to fix prices, given their lack of industry expertise. In this complex scenario the inventors are given full freedom to fix the price of their innovative products. This chapter unravels the extremely complex socio/economic/political/legal issues that are entangled in setting a ‘fair price’ for medicines. It exposes the harsh reality that there is no single formula to fix prices and ends with a foreboding that no laws can curb the vile aggrandizement of the producers: exploitation is bound to continue undeterred.
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