Prices for all essential medicines are likely to increase by almost 2% from 1 April. The National Pharmaceutical Pricing Authority (NPPA) has asked companies to submit the documents required to benefit from the annual price increase based on the wholesale price index. Under the Drugs Price Control Order, the regulator revises prices of all essential medicines annually based on the changes in WPI.
For all other medicines outside of NLEM, companies are allowed to raise prices by up to 10% in one year. At present, about 30% of the market Rs lakh crore pharmaceutical is under direct price control.
The government directly regulates the prices of medicines that are part of the national essential medicines list by limiting their price ceilings to the simple average of all drugs in a particular segment with a market share of at least 1%. This includes more than 875 drugs ranging from anti-cancer drugs to antiretrovirals to those used in the treatment of diabetes, hypertension, hepatitis, kidney disorders, etc. The list also includes antibiotics, analgesics, stents and Condoms.
"As confirmed by the Economic Adviser (Ministry of Commerce & Industry), the annual change in the wholesale price index (WPI) works out as 1.97186% during the calendar year 2016 over the corresponding period in 2015," the pricing authority said in an office memorandum issued on Wednesday.
While consumers may see a slight rise in their drug bills from next month, it is likely to bring some relief to pharmaceutical companies that have been shaken under price pressure for the past couple of years. For example, prices for cancer drugs in India have declined by 13-86% over the past year, according to NPPA. It also significantly reduced the prices of diabetes medications.
