There is an insignificant increase in the price of medicines as the cost of raw materials has increased abruptly. This move has suddenly fallen as there is an insignificant increase in the prices of active pharmaceutical ingredients (APIs), which are mostly imported from China.
The pharma industry had made several representations to the pricing regulator after the prices of the APIs of Heparin went up by over 200 percent in the last 2 years. The current crisis has perhaps added to the woes as supplies from China have been disrupted. India which imports various drugs and APIs for producing medicines to China constitutes about two-thirds of total imports of bulk drugs and drug intermediates. According to the Ministry of Commerce and Industry, the Indian pharma industry has been growing consistently over the last few years. Pharma exports in FY19 were $19.13 billion, with a growth of 10.72 percent over the previous years.
During April 2019- January 2020, the exports stood at $17.32 billion, registering a growth of 11.53 percent over the corresponding period of the previous year. India also imported bulk drugs and drug intermediates worth $3, 560.35 in FY19, of which 67.56 percent or $2, 405. 42 came from China, according to the Chemical Ministry. The Department of Pharmaceuticals (DoP) has constituted a committee under the chairmanship of Eshwara Reddy, Joint Drugs Controller, Central Drugs Standard Control Organization (CDSCO), has written to the DGFT asking to restrict exports of 13 APIs and formulations.
Now the drug- makers in India are reaching out to the government with the proposal to bring in law under which the price hikes could be made possible due to unforeseen factors. According to the data collated by the Bulk Drug Manufacturers’ Association (BDMA), antibiotics, Azithromycin, and Ornidazole and anti-inflammatory drugs inside nimesulide and antipyretic drug paracetamol have seen their prices jump between 60 and 190 percent since January. According to the data collected by BDMA, the price of chemical compound 6APA used to manufacture antibiotics has swelled to Rs.1, 875 per kg from Rs.400 per kg in February, which was an increase of more than 360 percent.
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However, as per the law that governs the pricing of medicines, Drug Pricing Control Order (DPCO) said that drug makers are not allowed to pass on the price hike to customers beyond 10 percent.“According to BDMA, it is not only the prices of drugs or APIs that are going up, the prices of other raw materials and intermediates have also increased. It’s high time for the government to intervene and bring some law to accommodate such wild price fluctuations,” says B.R. Sikri, Vice President of BDMA.
NPPA has the power under para 19 of Drug Price Control 2013 to fix sealing prices of any drug whether or not they fall under the National List of Essential Medicines (NLEM). It also allows the NPPA to increase or decrease the price of any drug irrespective of the annual wholesale price index (WPI) of the year. Last year they used this power to increase the price of 21 drugs by 50 percent, and that was the first time NPPA invoked para 19 to raise prices of drugs. Recently on July 2, 2020, the NPPA has allowed pharmaceutical companies to take- time price increase on Heparin injections by 50 percent. This drug is used as a blood thinner and plays a very important role in the treatment of Covid.
“The Government does not wish to be seen as the reason of raising medicine prices during the pandemic. They understand the reason behind the representations and we have presented all data related to Chinese prices going up”, as said by an insider from the Industry reported by the Business Standards.