The standing committee on chemicals and fertilizers has lashed out at the National Pharmaceutical Pricing Authority (NPPA) for permitting price hikes for eleven drug formulations by a steep 50% last year. The panel expressed serious concerns that just when the rising drugs prices were affecting the whole country, the NPPA, which has the ambit of monitoring and enforcement of pricing of medicine, allowed such hefty price hikes.
In October 2024, NPPA allowed one-time increase in the ceiling prices of eleven formulations, including medicines used to treat bacterial infections, asthma and bipolar disorder, to ensure their continued availability in the market. As per NPPA, these drugs were low-cost and generally used as the first line of treatment.
In its response, the government said that NPPA had received applications for 77 formulations asking for price increase. These price hikes were sought by manufactures to compensate for the increase in the cost of production, increase in the cost of active pharmaceutical ingredients (APIs) and changes in the exchange rates.
50% hike on essential drugs
“The mechanism for one-time price increase of 50% under paragraph 19 of DPCO (Drugs Prices Control Order), 2013 is as per the guidance given by the Committee on Affordable Medicines and Health Products (CAMPH) of NITI Aayog. This mechanism has been invoked from time to time since 2019 with a view to ensure continued availability of essential drugs to the general public,” the ministry of chemicals and fertilizers told the panel.
NPPA’s justification: Balancing availability and affordability
Further, the ministry said that to deliberate on requests from the industry, NPPA has formed an inter-ministerial committee of technical experts, consisting of representatives from CDSCO, director general
of health services and NPPA officials. This committee examines the requests on the basis of different parameters like essentiality of these medicines, period since when such drugs have been under price control, and the API price trends over the last three years.
A separate report by the Committee on Petitions, Rajya Sabha has also urged the government for a broader control on the prices of cancer drugs. The panel noted that under the NLEM (National List of Essential Medicines) 2022, the number of anti-cancer medicines under price control has gone up from 40 to 63, however, a significant number of oncology medications are still not included under the Drugs (Prices Control) Order, 2013, and therefore, they are not subject to any statutory price ceiling. “This regulatory non-inclusion has led to excessive and often unaffordable pricing, thereby limiting access for a large section of the patient population,” the panel said in a report.
To keep a check on the prices of essential drugs, NPPA currently regulates 920 medicines, and allows for an annual change in their prices based on the wholesale price index (WPI). NPPA also monitors the prices of non-essential medicines to ensure that drugmakers are not able to increase their MRPs by more than 10% in a year.
