Marginal Increase in Essential Medicines Prices in India for Fiscal Year 2024–25

Summary:

The National Pharmaceutical Pricing Authority (NPPA) has announced a marginal increase in the Maximum Retail Price (MRP) of scheduled formulations by 0.00551 percent, effective from April 1, 2024, marking the beginning of the fiscal year 2024–25. This adjustment, rooted in the change in the Wholesale Price Index (WPI), affects 923 scheduled drug formulations and 65 formulations with revised retail prices. Despite prior years witnessing significant price hikes, this year's nominal increase aims to balance the essential drug affordability while addressing the pharmaceutical industry's concerns over high input costs and stringent price controls.

Important Points:

• Nominal Price Adjustment: The price increase for essential medicines is pegged at a minimal 0.00551 percent, aligning with the latest WPI changes.
  

• Scheduled Formulations Impact: The revision applies to 923 scheduled drug formulations, with ceiling prices effective immediately, aiming for minimal impact on consumer costs.
  

• Pharmaceutical Industry Concerns: Pharma companies express apprehension over rising input costs and regulatory pressures, with some discontinuing unviable drug production despite the hike.
  

• NPPA's Regulatory Role: The NPPA regulates drug pricing under the DPCO, 2013, ensuring drugs remain within ceiling prices and addressing instances of overcharging.

Additional Information to Remember:

• WPI as a Pricing Basis: The WPI's minor annual change serves as the basis for adjusting drug prices, reflecting the government's effort to maintain affordability while considering industry challenges.
  

• Continued Dependence on China: India's pharmaceutical sector remains heavily reliant on China for raw materials, a concern highlighted during the COVID pandemic and in discussions about reducing import dependence.
  

• Consumer Impact: The minimal increase is designed to keep essential medicines affordable for another year, amidst broader concerns about healthcare costs and accessibility.
  

• Policy Implications: The pricing strategy underscores the balance between ensuring drug quality, controlling costs, and supporting the domestic pharmaceutical industry's viability.

Key Words and Descriptions:

1. National Pharmaceutical Pricing Authority (NPPA): A regulatory body constituted by the Government of India in 1997, tasked with controlling the prices of pharmaceutical drugs in India to ensure their affordability.
   

2. Maximum Retail Price (MRP): The highest price at which a product can be sold to the consumer. The NPPA enforces the MRP for scheduled formulations of drugs.
   

3. Scheduled Formulations: Medications that are listed under a schedule in the Drugs (Prices Control) Order, 2013 (DPCO), making them subject to price regulation by the NPPA.
   

4. Wholesale Price Index (WPI): An index that measures the change in the price of goods sold and traded in bulk by wholesalers. The WPI is used by the NPPA as a reference for adjusting drug prices annually.
   

5. National List of Essential Medicines (NLEM): A list prepared by the government that enumerates medications considered essential and thus are subject to price caps to ensure accessibility.
   

6. Drugs (Prices Control) Order, 2013 (DPCO): An order issued by the Government of India to regulate the prices of drugs in the country, allowing the NPPA to fix or revise the prices of controlled medications.
   

7. Ceiling Price: The maximum permissible price for a drug as determined by the NPPA, above which the drug cannot be sold.
   

8. Non-Scheduled Drugs: Medications not listed under the DPCO, which manufacturers can price freely, subject to the condition that the MRP cannot be increased by more than 10% annually.
   

9. Price Revision Based on WPI: The practice of adjusting the prices of drugs according to the annual change in the Wholesale Price Index, to reflect the inflation or deflation in the economy.
   

10. Economic Viability: Refers to the financial sustainability of producing a drug, considering costs, pricing regulations, and market demand. Some pharmaceutical companies argue that strict price controls can make the production of certain drugs economically unviable.

Published in : The Hindu

Date appeared in newspaper : 05 April 2024

Link to the article (might require a paid subscription) :https://www.thehindu.com/todays-paper/2024-04-05/th_international/articleGDCCKMHS6-6361683.ece

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