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Enforcement and Compliance with Price Ceilings on Essential Medicines

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Regulating Pharmaceutical Prices in India

Part of the book series: India Studies in Business and Economics ((ISBE))

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Abstract

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.

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Notes

  1. 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.

  2. 2.

    Government recovers just 7.8% of Rs 4928 crore drug overcharging fine, Economic Times, May 10, 2016.

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Authors and Affiliations

  1. Erasmus School of Economics, Erasmus University Rotterdam, Rotterdam, The Netherlands

    Ajay Bhaskarabhatla

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Bhaskarabhatla, A. (2018). Enforcement and Compliance with Price Ceilings on Essential Medicines. In: Regulating Pharmaceutical Prices in India. India Studies in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-93393-1_8

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