The National Pharmaceutical Pricing Authority said the Wholesale Price Index rose 12.12 percent in calendar 2022, setting the stage for the ceiling prices of essential medicines, including painkillers, antibiotics and drugs for fever, diabetes and hypertension, to be increased.
“This is brought to the notice of all concerned for further action as per the provisions of the Drug Price Control Order (DPCO), 2013,” the NPPA said on March 27.
This means the ceiling prices of 384 drugs and more than 1,000 formulations on the National List of Essential Medicines could increase steeply from April 1.
The annual increase in WPI is the highest since the DPCO 2013 came into force. This would also be the second year in a row that the WPI increase is higher than the annual price hike of 10 percent allowed for non-scheduled formulations.
Advocates for patients’ rights said a drastic hike will distort price controls in place for essential medicines and the government should intervene in the interest of maintaining the affordability of these drugs.
Rash policymaking?
“Such high back-to-back price increases are undermining the purpose of price fixation of essential medicines,” said Malini Aisola of the All India Drug Action Network.
Also read | Commonly used medicines to get 12% more expensive from April
The All India Drugs Action Network has challenged this formula and the case is currently in the Supreme Court.
Top government authorities maintained that the prices of essential medicines are going up only as per fixed formulae and there was no room for kneejerk interventions.
“If the ceiling prices of these drugs are allowed to go up by over 12 percent, this does not mean all the drug costs will increase by that margin as there are other market dynamics at play, but of course, government has no role to play as of now,” said a senior official in the department of pharmaceuticals at the ministry of chemical and fertilisers.
While industry executives said they would abide by the norms, pharmaceutical experts such as S Srinivasan pointed out that the question to ask is whether India is setting the prices of essential drugs in the correct way.
The ceiling prices of essential drugs are the average price of all the brands of a medicine, and in many cases, the average price of the drug may be higher.
Srinivasan said that the DPCO of 1995, which took into account the cost of production while setting ceiling prices, was more appropriate. In addition, he said WPI is a bundled indicator of price increases in commodities such as steel, housing, vegetables and rice, and each has a different behaviour as far as pricing is concerned.
“So, to aggregate them and use that as a basis of raising prices of essential medicines is absurd because medicine behaviour is different,” he said.
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