Excessive Pricing for Pharmaceuticals

Abstract

Abstract This chapter focuses on the phenomenon of exorbitant drug prices in developing countries and surveys the different means afforded by the TRIPS Agreement to tackle the problem. It reaches the conclusion that none of the mechanisms provided by the TRIPS Agreement is satisfactory and competition law hence has a limited, but important, role to play in regulating excessive drug prices, especially in instances of a sudden and substantial price hike and of reverse price discrimination under which the same drug is more expensive, often much more so, in developing than in developed countries. The chapter thus proposes that developing countries resort to excessive pricing enforcement to tackle the most egregious instances of excessive drug prices. The proposal is surely not the widespread use of excessive pricing regulation as a general price control tool. It is important to be mindful of the limitations of excessive pricing enforcement and not to overuse or abuse it. The chapter then addresses some of the strongest objections to excessive pricing enforcement in general and in the context of excessive drug prices in developing countries in particular.