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Ceiling price fixation of 651 formulations resulted in annual savings of over Rs. 3,500 crore in MAT: DoP
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Gireesh Babu, New Delhi
April 21 , 2023
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The ceiling price revision and fixation of prices for the new drugs added to the revised Schedule I of the Drugs (Prices Control) Order, 2013, has resulted in an estimated annual savings of over Rs. 3,500 crore in moving annual turnover (MAT) for the consumer on formulations for which the new prices has been finalised till the end of March 231, 2023, says the drug price regulator.
The National Pharmaceutical Pricing Authority (NPPA) has been conducting the exercise of revising or fixing the ceiling prices of the scheduled formulations which has been listed in the National List of Essential Medicine (NLEM), 2022 and which was included in the DPCO, 2013 through an amendment late last year. It has fixed the ceiling price of 651 formulations till the end of March 31, 2023.
The Department of Pharmaceuticals (DoP) has now said, “There has been an average reduction of 6.73 per cent in the ceiling price of scheduled drugs under NLEM, 2022. The estimated annual savings in moving annual turnover (MAT) for 651 formulations fixed under NLEM 2022 till March 31, 2023 is Rs. 3,532.24 crore approximately”.
Even as the NPPA has been trying to reduce the ceiling price of the scheduled formulations through the latest initiative, there were reports that the implementation of price increase based on the Wholesale Price Index (WPI), to the tune of 12.12 per cent, has resulted in a price increase on essential medicines from the beginning of April, 2023.
The Authority, in response to this, clarified that the price reduction following the inclusion of NLEM 2022 into the DPCO, 2013 has resulted in a price cut of around 6.73 per cent on around 651 formulations, even after the prices were allowed to increase in tune with the Wholesale Price Index increase.
As per the WPI increase, the prices of scheduled formulations were allowed to be increased by 12.12 per cent from April 1, 2023. However, based on the revised Schedule I of the DPCO, 2023, prices of 870 formulations are being revised or fixed based on NLEM, 2022. So far prices of 651 scheduled formulations have been reduced by around 16.62 per cent. Even after considering the 12.12 per cent price increase based on the WPI, the price of these 651 essential medicines are still down by 6.73 per cent for the consumer, it added.
For instance, the ceiling price of paracetamol tablet 500 mg was at Rs 1.01 per unit under the NLEM, 2015 as on April 1, 2022, and after revising the ceiling price according to NLEM 2022 and even after adding the WPI, as on April 1, 2023 the ceiling price stood at Rs. 0.89 per tablet, which is a 11.88 per cent net reduction from NLEM 2015 after WPI increase.
Similarly, diabetes drug metformin 500 mg tablet, costed Rs. 2.13 per tablet as on April 1, 2022, has come down to Rs. 2.01 per tablet as on April 1, 2023, which is a net reduction of 5.63 per cent; ceiling price of glimepiride tablet 2 mg as on April 1, 2022 was at Rs. 6.34 per tablet and it has come down to Rs. 5.79 per tablet a year later, with a 8.68 per cent net reduction from NLEM, 2015 after WPI increase of 12.12 per cent.
The Authority opined that as per reports, due to the market forces and the presence of Jan Aushadhi stores in the country, the drug manufacturers also generally tend to keep their maximum retail prices less than the ceiling price in many cases.
The authority has fixed the retail price of 25 new drugs during the month of March, 2023, bringing the cumulative figure of drugs under retail price control to 2,299 till the month, said DoP.
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