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IDMA urges NPPA not to price control formulations having unit dose MRP below Rs. 5 to address rise in manufacturing costs
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Shardul Nautiyal, Mumbai
May 29 , 2023
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The Indian Drug Manufacturers’ Association (IDMA) has urged the National Pharmaceutical Pricing Authority (NPPA) not to price control formulations having unit dose maximum retail price (MRP) below Rs. 5 to address the rise in manufacturing costs.
According to an IDMA representation, “There has been an unprecedented rise in input costs across all heads like API, solvents, excipients, packaging material and transportation. There has also been a steep increase in the manufacturing costs due to upgradation of quality and regulatory requirements. Hence, all formulations under the price band of Rs. 5 per unit dose should be exempted from ceiling price.”
Increase in input costs and transportation costs have also been putting severe pressure on operating margins of the pharmaceutical companies.
There was a drastic increase in prices of key active pharmaceutical ingredients (APIs) from 11% to 51% and excipients from 11% to 61% in the year 2021. In order to keep a track on prices, production and sale of scheduled, non-scheduled formulations and APIs, the NPPA has also introduced Integrated Pharmaceutical Database Management System (IPDMS 2.0). It also aims to optimise synergies in operations by providing a single window for submissions of various forms as mandated under the Drug Prices Control Order (DPCO), 2013.
Pharmaceutical industry associations had last year sought Department of Pharmaceuticals (DoP) intervention to urgently address price hike by allowing price revision of ceiling price as per consumer price index (CPI) and not wholesale price index (WPI) for scheduled formulations among other recommendations.
The NPPA announced an annual change of 10.76 per cent in the WPI for the calendar year 2021, which is one of the highest price hikes allowed for scheduled drugs. This led to a price increase of 10.7 per cent for the more than 800 drugs that are under the Scheduled drugs category.
The WPI increase for pharmaceuticals for the year 2021 was 0.53 per cent, while in 2020 it was 1.88 per cent, in 2019 at 4.26 per cent and 2018 at 3.43 per cent. While there has been no general decrease in prices during the last five years on account of change in WPI, there was a decrease in prices during the year 2016 as compared to prices in the year 2015.
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