India should permit easier access to over-the-counter medicines
Summary
There’s a clear case for letting regular retailers sell drugs that do not require a doctor’s prescription. The medicine market would benefit if retail curbs are eased to enable wider consumer access.
The liberalization of India’s economy, as tracked by an embrace of free-market principles, has been rather slow in chipping away at old precepts of a nanny state. We should thus welcome the government’s effort to ease the retail availability of medicines that can safely be sold over the counter (OTC): i.e., without a doctor’s prescription.
As reported by Mint, the Drugs Technical Advisory Board is seeking a tweak in regulations to first define OTC drugs clearly and then license a wide set of retailers to sell these. As of now, such pills can only be dispensed by chemists with qualified pharmacists behind their counters (or web interfaces). As the report indicates, the government’s OTC list is likely to include regular pain-killers, anti-allergics, laxatives, cough syrups, anti-fungal products and some formulations for asthma patients.
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All of these—and more—are routinely used and widely bought without the explicit advice of doctors anyway. It’s just that it involves hunting for chemist shops, which are far fewer than grocery stores. The convenience this proposal would assure buyers is reason enough to back it.
Most legacy rules originate in a valid purpose. In general, since the misuse of drugs can be a serious health hazard, access to them cannot go unsupervised. This goes without saying. At stake here, though, are formulations that cause much less harm if used needlessly (or overdosed).
Ever since the idea of wider retail supply was first proposed in 2022, it has stoutly been resisted by the All India Organization of Chemists and Druggists and Indian Pharmaceutical Association. Misuse is the key risk they have flagged. To address this worry, the list of OTC drugs must duly be vetted by medical experts and kept judiciously short. But the chemist lobby’s expression of anxiety that its members may suffer a sales drop should not influence such a decision.
Policy must aim for better health outcomes, after all, not protect businesses.
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If people at large are deemed capable of decisions on the use of OTC drugs, as they are by definition, we have no reason to restrict OTC sales only to outlets with the capacity to verify medical advice and ensure error-free delivery. Equally invalid is the objection that Indian levels of literacy are too low for our retail rules to be liberalized safely. It amounts to the state playing nanny, an approach we need to outgrow.
A tight policy effort to save people from themselves by means of retail curbs could have effects that are not plainly visible. This is a market with relatively inelastic demand. As medicines are mostly bought on a need basis, offtake quantities of moderately priced pills do not vary much in line with price movements.
Typically, in any market where supply cannot freely fulfil such demand, space opens up for inflated profits in various links of the supply chain. This was seen in many fields during the heyday of India’s Licence Raj. In the case of medicines, a regime of price controls for some drugs has been in place to prevent exertions of monopoly power that may let unfairly large profits be made. This has been accompanied by a loose intellectual property regime that encourages rivalry in segments of off-patent drugs in heavy use. So, by and large, we have not suffered extortive pricing.
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Yet, price caps aren’t foolproof, they don’t cover all drugs, and easier retail access to OTC meds may empower the market to keep its own check on prices.
