Pharmacoeconomics to recognize the measures and compares the costs and consequences of pharmaceutical products and services. It gives the information to maintain the economic relationship involving drug research, drug production distribution storage, pricing use by people. Pharmacoeconomics has become more important due to an increased emphasis on efficient drug therapies for diseases, which led to increasing health costs. Patients are affected by the high prices of medicines. One of the major causes of the high cost of medicine is prescription by innovator name. Consequently, the use of generic drugs has been steadily increasing internationally as a result of economic pressure on drug budgets.
The principle of essential medicines was introduced by WHO and now it has been adopted by many countries including India, non-governmental organizations and international non-profit supply agencies. It has been playing a crucial role to satisfy the priority healthcare needs of the majority of the population and should get medicines at a fair price. Afterward, most of the drugs in the market were undergoes price control. With this successful implementation of stringent policies, the number diminishes and few of the drugs have come under price control. It is difficult to meet the requirement of essential drug criteria. The medicines included in the National List of Essential Medicines (NLEM) must be authorized and available at affordable costs with assured quality based on market-based values.
DPCO 2013 controlled the Prices of 652 drugs which is 74 before and the prices of drugs are fixed by the manufacturers based on their manufacturing costs. Due to changes in DPCO (1995), the prices are fixed by the government, which led to a situation like most of the manufacturers have withdrawn their products from market and manufacturing levels have been diminished. After facing such a situation, the government of India amending the existing law DPCO (2013), by which most of the drugs have come under the national essential medicines. The prices of drugs are fixed by their simple average of all marketed products of that particular drug, which have a market share of more than 1%. The final MRP of the drugs at the retailer raised with a factor of 16%. DPCO provides the platform to the government to support the indigenous research and development of new drugs by providing patent to the innovations. however, it has overcome this problem by involving the government in fixing the prices on a simple average market price mechanism, by which most of the lifesaving drug prices are fixed by the government, which is in favor of manufacturer and patient. The Indian customer will be the biggest beneficiary under the new drug pricing control order 2013. The prices of some brands may fall and It is anticipated that the policy will cover most of the domestic industry. The impact of the industry can be analyzed on a short and long term basis. The large companies with established brands may be able to withstand better but there could be some loss of market segment.