Essential medicines to be slightly costlier from April 1

After annual increases of 12 percent and 10 percent in prices in 2023 and 2022, this will be a meagre increase for the industry.

Medicines included in the National List of Essential Medicines (NLEM) will see a slight increase in prices from April 1.

The adjusted prices will cover more than 800 drugs on the National List of Essential Medicines. Price changes for scheduled drugs are allowed once a year. From April 2024, companies can take a 0.0055 percent hike.

Every year, the National Pharma Pricing Authority (NPPA) announces a calculated ceiling of prices based on the Wholesale Price Index (WPI) of the previous calendar year. This limits the percentage hike drug companies can take on their portfolio under NLEM starting April.

“Based on the Wholesale Price Index (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,” the notification from the National Pharmaceutical Pricing Authority (NPPA) said.

Essential medicines are those that satisfy the priority healthcare needs of a majority of the population. The essential medicines list needs to be country specific, addressing the disease burden of the nation and the commonly used medicines at primary, secondary and tertiary healthcare levels. The medicines in the National List of Essential Medicines (NLEM) should be available at affordable costs and with assured quality. The NPPA regularly updates and maintains the list of products under NLEM.

After annual increases of 12 percent and 10 percent in prices in 2023 and 2022, this will be a meagre increase for the industry. However, it might not be a big blow to the listed pharmaceutical players according to an expert. ““NLEM medicines are not a majority component of the Indian pharma companies;  the non-NLEM portfolio of the company has around roughly 80 percent and the NLEM portion in the domestic sales that we have is around 15 to 20 percent,” said Bhavesh Shah, Managing Director and Head-Investment Banking, Equirus.

The Indian pharmaceutical market grew 6.8 percent in calendar year 2023. Price was a major growth factor in 2023 as volumes were down marginally by 0.9 percent. According to a recent sectoral update by HDFC Securities, price benefits from NPPA price hike of 12 percent had started reflecting in 9M’24 performances of listed Indian companies.

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