Most healthcare expenditure in India consists of ‘out of pocket’ spending by patients and their
families, and a substantial proportion of this is accounted for by the cost of medicines. Such
expenses are directly responsible for households falling into poverty or having to sell assets or incur
debts, impairing their standard of living. Inability to afford medications leads to morbidity, lost
workdays, and low productivity. The cost and availability of drugs is therefore a key development
issue, directly impacted by various government policies that affect the degree of competition.