By order of the National Pharmaceutical Pricing Authority (NPPA), essential drug categories like antibiotics and pain killers have registered a marginal hike of 0.00551% from April 1, 2024. This was put into effect based on the change in the Wholesale Price Index (WPI) for 923 scheduled drug formulations and 65 retail formulations, as per the annual price revision. According to NPPA this adjustment aim at balancing the cost of essential drugs with economic indicators, ensuring affordability for consumers and maintaining a stable pharmaceutical market at the same time. Pharmaceutical manufacturers are now permitted to adjust the Maximum Retail Price (MRP) of scheduled drug formulations in line with the recent Wholesale Price Index (WPI) change of 0.00551% independently without government’s approval.
“At a time when the government should look at reducing prices, it has increased prices for essential drugs and justifying the hike by saying that it will not become a burden for consumers. There can be various underlying reason for this. There is huge lack in governmental supervision on drug control pricing all across the country. Many generic formulations are being sold under brand names”, mentioned sources from the medical community to India Pharma Outlook.
However, Union Minister Mansukh Mandaviya said last Thursday that there will be no increase in the prices of essential medicines for this fiscal year with regards to negligible growth in WPI based inflation. "It is absolutely incorrect. There will be no increase in the price of medicines", he said to the media.
Farfetched effects on the Indian healthcare system can be observed because of this price hike which can be detrimental for consumers.
According to the Health Report of Corporate India 2023 published by insurtec company Plum, medical inflation in India is the highest among the Asian countries reaching 14 percent. Increase in the ceiling prices for drugs, especially essential drugs may have impacted this inflation. We can see a hike in the prices of essential medicines based on WPI inflation since last year when NPPA and had decided fixed the ceiling prices of 700 formulations registered under the National List of Essential Medicines (NLEM) 2022, 225 of which were done by December, 2023.
"Based on the WPI data provided by the office of the Economic Advisor, Department of Industry and Internal trade Ministry of Commerce and Industry, the annual change in WPI works out as (+) 0.00551% during the calendar year 2023 over the corresponding period in 2022," said the recent notice by the NPPA.
In this regard, there are several essential drugs which are overpriced in the market. The Pharma Sahi Daam portal can be of help in this aspect. E.g, the ceiling price for 1 unit of medicine of essential formulation named Diazepam that is used to treat anxiety and seizures is 1.62 INR. This formulation under a brand name is being sold at 50 INR/stripe. It is more than twice than what a stripe of 10 tablets must cost based on the ceiling price of the drug.
Price of drugs is one of the primary indicators for rise in healthcare costs in India. Individuals from medical community of the country informed India Pharma Outlook that there is huge lack not only in fixing drug prices, but also in the supervision of manufactured drugs in the country. Government bodies like the CDSCO are responsible for licensing new drugs in the market but there is no system that would guarantee the efficacy of the drugs. Underlying corruption between government bodies and pharmaceutical manufacturers has primarily led to the hike in prices and there is large scale confusion as to why this has been done.
“Unethical marketing practices that include providing sales based incentives are being provided to medical professionals for prescribing drugs which are having negative effects on the financial status of consumers. This price hike would mean further loss for them and it cannot be understood as to why this was done by the government”, said sources.
The price hike by the NPPA has come into effect just after the Department of Pharmaceuticals rolled out the revised UCPMP guidelines directed towards pharmaceutical companies. The UCPMP has been rolled out in order to provide power to the hands of the consumers on the medicines they want to buy. The PMBJP has been launched to provide generic formulations to patients at cheaper prices which directly contradict to the recent NPPA price hike of essential drugs.
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