A basket of 384 essential drugs are poised to see a possible price increase from April 1, benchmarked against the annual change in Wholesale Price Index (WPI) for 2022.

In its communication, the National Pharmaceutical Pricing Authority said the annual change in WPI was 12.12 per cent for the calendar year 2022. Once notified, this routine development paves the way for drugmakers to take a WPI-linked price increase on their products that feature on the National List of Essential Medicines (NLEM), and are already under price control.

Covering over 900 formulations and across 27 therapeutic categories, the NLEM includes antibiotics, anti-infectives, diabetes medicines, cancer therapies and immunosuppresent drugs, besides a few medical devices. These scheduled drugs cover about 20 per cent of the domestic pharmaceutical market.

While a final NPPA notification allowing the increase on these price-controlled drugs is awaited, the possibility of a hike of up to 12 per cent has some public health voices concerned on its impact on affordability, especially since it comes on the back of a year that had seen a similar WPI increase. In the past, price-controlled drugs have seen price increases in the low single digits. Incidentally, non-scheduled (not under price control) drugs are allowed an annual 10 percent price increase.

A senior Health Ministry official clarified last year the limit was set at 10 per cent based on WPI. However, pharma companies took a 2-5 per cent hike in prices. Compare this with the fact that Active Pharmaceutical Ingredients also were costlier. But with public health voices calling for the apex ministry to intervene, the representative said: “It is highly unlikely that there will be any direct intervention from the Centre or Health Ministry at this point. It sets a bad precedent, if done,”

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Competitive landscape

Hitesh Sharma, Partner and National Leader (Life Sciences), EY India, told businessline the competitive landscape would not see companies increasing their prices dramatically. And this, despite them having to deal with high raw-material prices, he said, adding that companies would evaluate their situation depending on the competition etc. 

Several industry voices echoed a similar sentiment. The WPI-linked increase will bring some relief to the industry, but a steep price increase would not be possible, said an industry veteran, addressing consumer concerns.

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