Clearly, the absurdity lies in the nature of the legislation. First, the exemption for small-scale manufacturers is a loophole, and more and more large units can be expected to take advantage of it. This will result in a proliferation of such units, none of which will enjoy economies of scale. Instead of a few large units which could produce the product efficiently at low cost, the upshot of the preference for SSI units will be fragmented capacities, which will almost certainly have higher cost of production. That disadvantage will, of course, be more than offset by being outside price control. In a case such as this, what does the government's preference for SSIs achieve?

Giving multinationals access to preferential treatment under the guise of SSI benefits can hardly have been the government's intention. All that is achieved is a lack of an incentive to grow, and a neglect of research in an industry where research is essential.

It is to be hoped that the Abbott anomaly will result in a thorough relook at the DPCO. While price ceilings must continue for life-saving drugs, in many cases, the freer import regime has ensured that competition will keep prices down. If the Indian pharma industry is to generate enough resources to compete with multinationals, repealing the DPCO is essential.