MRP is the concept where manufacturers, wholesalers, and distributors together decide on a maximum retail price for their product, taking into consideration all costs with the addition of a mark-up such that no individual in the supply chain suffers a loss and everyone is able to make their profit. The concept of MRP ensures that the consumer is not cheated.  In order to set the MRP, manufacturers calculate the highest price that a drug or commodity that can be sold to the end user.  Currently, India has employed this concept in the nation; it is the only country that has used this concept.

MRP can be found on the packaging of any product in the market. The disadvantage of MRP is that manufacturers calculate it taking taxes of a particular state into account.  This means that some states having higher taxes may benefit from a restricting price of MRP, but others which lower taxes will be paying more. 

MRP cannot be used in Kenya as the Competition Authority of Kenya (CAK) believes that this restricts competition in the market.  This is an offence (i.e. violates the Competition Law) in Kenya, as is charging over the MRP in Kenya.  While keeping MRP actually is against competitiveness, there can be players in the market taking advantage of this system.  Some retailers undercut, meaning they sell below the suggested retail price by manufacturers.  This actually distorts the picture of competitiveness. 

Up to 1993, Kenya had a price control policy in place.  Currently, the Health Cabinet Secretary, Dr. Cleopa Mailu, states that a price control policy in today’s liberalized economy would not be possible. However he accepts that there is room for reviewing the concept of Maximum Retail Price to prevent public exploitation.  The MOH would need to analyze and publicize the cost of production and/or importations.  The obstacle with this is that the Health Bill in Parliament at the moment has made no provision for a drug pricing policy; but the Senate can still introduce this provision.  

PPB has called for re-introduction of the same. It is with this policy that transparency can be gained.

Official data show that products manufactured by multinationals for both rich and poor countries have a difference of 1000 percent for those sold in Kenya.[1]  The MRP although tested in India, has its setbacks.  Thus, it should be with great caution that Kenya adopts the same type of pricing system.

[1]http://www.nation.co.ke/news/Families-driven-to-endless-pain-as-medicine-prices-keep-going-up/-/1056/3220770/-/lkmvsp/-/index.html