OBJECTIVES: High prices and poor availability of medicines are major barriers to better health in poor countries. In India, more than 80% of health care expenditure is ‘out-of-pocket'. The study was undertaken to assess medicines prices and the availability of essential medicines in Rajasthan State, India. METHODS: Price and availability data for 36 medicines were measured using a methodology developed by WHO and Health Action International (HAI). For each medicine, data was collected for the Innovator Brand (IB), Most Sold Generic (MSG), and Lowest Priced Generic (LPG). In each of four randomly selected regions, five public facilities, five private retail and five co-operative pharmacies were surveyed. Prices were compared to an international reference benchmark (expressed as Median Price Ratios -MPR). RESULTS: In the public sector, generic medicines were purchased and provided free of charge to various categories of people. Procurement prices were reasonable (median MPR 0.96) but the median availability was only 40%. In the private sector, the median MPR for IB, MSG and LPG was 2.81, 2.72 and 1.83 respectively. The median availability was 0% for IBs, 82.5% for MSGs and 95% for LPGs. Prices in the co-operative sector were similar to the private pharmacies, but the availability was lower. In the private sector, the MPR for three medicines (LPG) were 8 to 26 times higher than the government procurement prices, indicating very high margins for wholesalers and retailers. CONCLUSIONS: As the availability of medicines in the public sector is low, people have to purchase medicines in the private sector, many of which are high in price. This baseline survey shows that the Indian government needs to implement policies to increase the availability of medicines in the public sector and reduce prices in the private sector.