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प्रश्न
Last week, the government used the Drug Price Control Order, 2013, to increase the price ceiling for 21 medicines by as much as 50% to ensure their availability in the market. This is a welcome move because lower prices would have further limited the availability of these drugs, some of which include those used for malaria, leprosy and allergy. The decision by the regulatory authority – usually known to reduce prices of essential drugs – was prompted by repeated petitions by the pharmaceutical industry, which pointed out that the increasing cost of imports had made the production of some of these drugs unviable. Prices of bulk drugs and active pharmaceutical ingredients have, in fact, gone up by up to 88%, and are largely imported.
This raises a basic question: Should the government control prices? The motivation for controlling drug prices is not very difficult to understand. Unlike some of the developed countries, where most of the population has insurance coverage or medical facilities are provided by the state, medical expenses in India are borne by citizens, largely through out-of-pocket expenses. Therefore, the state intervenes by keeping prices of some drugs in check to contain such spending. However, the unintended consequence is that it affects the supply of drugs and can potentially make citizens worse off. The risk of non-availability was an important reason for raising prices. Although all pharmaceutical companies may not stop producing drugs with price control, they may limit the supply. Further, the government usually dithers on price hike because of political considerations so that it is not accused of favouring private companies.
Thus, the government should stay away from dictating prices and allow the market to function. Competition in the marketplace will ensure that no company is able to make extraordinary profits in basic and essential drugs. Since the state has limited resources, it should focus on regulation, and ensure that the quality of drugs supplied in the market is not compromised at any point.
The state removes all price restrictions on an essential medicine. Pharmaceutical companies start selling that medicine at a price nearly 5 times its earlier price. In such a situation, based on the author’s reasoning above:
विकल्प
The state should not control the price of the medicine since competition in the market would eventually lead to an appropriate price being set.
The state should not control the price of the medicine since the price increase is directly attributable to an increase in the price of the ingredients used in the medicine.
The state should not control the price of the medicine, but it should supply the ingredients for the medicine at lower prices.
The state should control the price of the medicine, since people may not be able to afford it anymore.
उत्तर
The state should not control the price of the medicine since competition in the market would eventually lead to an appropriate price being set.
Explanation:
The correct answer is – the state should not control the price of the medicine, since competition in the market would eventually lead to an appropriate price being set. The author provides this reasoning for why the state should not control the prices of medicines, in the last paragraph of the passage.
There is no information in the facts provided to indicate that 'The state should not control the price of the medicine, since the price increase is directly attributable to an increase in the price of the ingredients used in the medicine. ' is the correct option.
The author does not discuss the state providing the ingredients for medicines at all, and so, 'The state should not control the price of the medicine, but it should supply the ingredients for the medicine at lower prices.' cannot be correct.
'The state should control the price of the medicine, since people may not be able to afford it anymore.' is also not correct, since we do not know what the previous price of the medicine was, nor do we have any information about whether people can afford it or not; this option is also contradictory to the author’s argument that the market would eventually ensure that no company makes extraordinary profits.
