New Delhi: India’s pharmaceutical industry is seeking a one-time exemption from the price control measure that would force them to lower their rates in line with drop in the wholesale price index (WPI). The WPI has been showing a declining trend.
Under the Drug Price Control Order (DPCO) 2013, the prices of scheduled drugs are revised in line with the WPI of the previous calendar year. As a corollary, drug manufacturers are required to cut their prices if there is a decline in the annual WPI. On the other hand, manufacturers who do not come under price control order are allowed to increase the maximum retail price of medicines by 10% annually.
Industry executives said this step reduces prices only marginally and will have no effect on consumers. “If it’s done, the cost of medicines will go down by a few paisa only,” said an executive. “Practically, there will be hardly any price reduction, as the WPI is declining,” said another senior executive.
The people ET spoke with said the government should give a one-time exemption this time because of rising input costs.
In this regard, several pharma lobby groups are planning to make a representation to India’s drug pricing authority, seeking a one-time exception.
Last year, essential medicines, including painkillers, antibiotics and anti-infectives, became costlier by more than 12%, marking the highest annual increase on record in their prices.
National Pharmaceutical Pricing Authority (NPPA) had allowed a price increase of 12.1218% from April 1 for scheduled drugs that were under price control, covering more than 800 drugs on the National List of Essential Medicines.
The price rise was in line with the change in the WPI. The index moved higher by 12.12% for the calendar year 2022, the economic adviser in the commerce and industry ministry had said.
“The (increase) was the highest seen since the DPCO (Drugs [Price Control] Order) 2013 came into force, and last year was second year in a row that the WPI was higher than the annual permitted price hike for non-scheduled formulations (10%),” another industry executive said.
