The government has for the first time invoked the Drug Price Control Order, 2013, (DPCO, 2013) to raise the prices of 21 formulations or medicines that are under price regulation to ensure their availability. This would be a one-time increase of 50 per cent above the present ceiling prices.

The pharma industry has been lobbying for this for almost two years, citing a steep rise in prices of active pharmaceutical ingredients (APIs) or bulk drugs largely imported from China.

The prices of APIs have gone up in the range of 5-88 per cent, depending on the products. API prices constitute 40-80 per cent of the formulation cost. For some medicines like paracetamol, the API cost is around 80 per cent of the finished product.
Paragraph 19 of the DPCO, 2013, deals with increase or decrease in drug prices under extraordinary circumstances.

The government noted that “in exercise of extraordinary powers in public interest, conferred by paragraph 19 of the DPCO, 2013”, the ceiling prices of 21 key formulations had been increased.

These formulations include common medicines like BCG vaccines, penicillin, malaria and leprosy medicines (Dapsone), life-saving drugs like Furosemide (used to treat fluid build-up due to heart failure, liver scarring, or kidney disease), vitamin C, some common antibiotics, and anti-allergy medicines. Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, an industry group representing the big pharma in the country, welcomed the step.

“The industry has been seeking relief for a long time because API prices had shot through the roof and it was no longer viable to continue to sell at the fixed prices. “The move is in a positive direction and would ensure that the patient benefits by ensuring the availability of these drugs in the market. Whenever any drug is in short supply, the patient moves towards a costlier drug,” he added.

Inputs from Business standard