Drug-makers in the country may incur a ₹600-crore revenue loss in the current fiscal due to the recent price cut announced by the National Pharmaceutical Pricing Authority, according to SV Veeramani, President, Indian Drug Manufacturers Association (IDMA).
The regulator has cut prices of 108 formulations used for cardiovascular and diabetic treatment by 10-12 per cent, widening price regulation in the ₹75,922-crore domestic pharmaceuticals market. Key among the price-cuts is regulation of cholesterol-controlling Atorvastatin tablets.
Marketed under varied brands by top firms such as Sun Pharma, Torrent Pharma and Biocon, this tablet’s price has been capped at 25 per cent above the simple average, affecting margins of over 16 companies in the top order.
“What we are concerned about is the continuous expansion of price control,” Veeramani told
Manufacturers had already taken a ₹1,000-crore revenue loss last fiscal, he said, warning that expanding price regulation may create shortage of drugs if producers decide to stop production of certain drugs.
The IDMA has requested the Department of Pharmaceuticals to hold the last price hike and consult with the industry on the possible impacts. To implement the last hike, the pricing authority has invoked a provision in the Drug Price Control Order, 2013 meant for situations of shortage under “extraordinary circumstances”.
Jatish Sheth, President of the Karnataka Drugs and Pharmaceuticals Manufacturers Association, says raw material costs have shot up, pressuring margins for drug companies. “For instance, the price of folic acid has increased to ₹9,000 a kg from ₹5,000 a month ago. While the Government focuses on affordability, it should create infrastructure to improve supplies. Our dependence on Chinese imports for certain chemicals is a disturbing trend.”