New Delhi: The Economic Survey in its observation on Friday found that government's intervention, though well intended, often ended up undermining the ability of the markets to support wealth creation and led to outcomes opposite to those intended.
According to the survey, the regulation of prices of drugs, through the Drug Price Control Order (DPCO) 2013, led to an increase in the price of the regulated pharmaceutical drug vis-a-vis that of an unregulated one, but similar drug.
The survey also observed that the increase in prices was greater for more expensive formulations than for cheaper ones and for those sold in hospitals rather than retail shops.
The survey said these findings reinforced the belief that the outcome was opposite to what DPCO aimed to do -- making drugs affordable.
The survey suggested that the government, being a huge buyer of drugs, can intervene more effectively to provide affordable drugs by combining all its purchases and exercising its bargaining power.
"Ministry of Health and Family Welfare must evolve non-distortionary mechanisms that utilise government's bargaining power in a transparent manner," said the survey.