Such a steep hike in drug prices has been allowed by India’s National Pharmaceutical Pricing Authority (NPPA) which is bound to create havoc for millions of poor patients who have already been severely affected by general rise in prices of all commodities especially in food items and food inflation in addition to reduced earning and joblessness.

It is worth recalling that drug prices were allowed be increased only 1.97 per cent in 2017, 3.43 per cent in 2018, 4.26 per cent in 2019, and 1.88 per cent in 2020. Then suddenly the rise in prices of essential drugs was allowed to be increased by over 10 per cent in 2021. This is the third year in a sequence when essential drug prices were increased above 10 per cent. From April 1, 2022, the hike would be highest at 12.12 per cent. There years combined, the effective price rise would be above 36.60 per cent.

The essential medicines to be affected by this price rise would include, but not limited to pain killers, anti-infectives, cardiac drugs and anti-biotics. The annual change in WPI, as notified by the government, works out to be 12.12 per cent during the year 2022, on the basis of which NPPA has allowed the pharmaceutical companies to increase the prices of essential drugs.

The Centre is all set to allow this which would push up the prices of 384 molecules, which correspond to over 1000 drug formulations across 27 therapies. These are scheduled or essential drugs which fall under the price control mechanism of the government via inclusion in the National List of Essential Medicines (NLEM). Since such listed drugs are used to treat common conditions such as fever, infection, heart disease, hypertension, skin diseases and anaemia, among others, steep hike in prices directly affects general well-being of the people.

The rest non-scheduled drugs which are outside the purview of the national price control mechanism are allowed an annual increase of 10 per cent every year. These drugs are already out of reach of the poor people due to their costs too high for common people.

Historically speaking, the increase allowed by NPPA due to annual change in the WPI has been marginal, ranging between 1 per cent and 2 per cent that remained for years, prior to 2021.

Ceiling prices for the essential drugs are not presently available. According to the sources, the NPPA will notify the ceiling prices of the scheduled drug formulations over the next few days.

Drug manufactures have welcome the NPPA decision to allow them to increase the prices. They have been demanding an immediate increase of 10 per cent in prices to ease their struggle with surging input costs in drug manufacturing. They have been saying that prices of all raw materials, active pharmaceutical ingredients, plastic and packaging material and also freight cost have increased the cost of production and supply to the consumer end. Many of the input ingredients are imported in the country at higher costs now. It has been reported that many pharmaceutical companies had reduced or stopped producing these drugs because they were finding difficult to offer drugs at present prices with increased production and delivery costs.

This price mechanism is in place under the Drugs (Price Control) Order (DPCO), 2013, under which NPPA decides on prices annually on the basis of WPI for drugs. A senior officials in the Union Ministry of Health has been quoted saying that allowing the price hike would ensure that there would not be any shortage of medicines in the market.

It is in this backdrop, the Centre needs to come out with certain mechanism to protect the poor patients or else the will not survive their existential crisis any more. Supply of essential and other medicines to poor patients free of cost or at affordable prices must be ensured by the government.

People also need to be protected from the spurious or poor-quality drugs in the market. It is evident from the latest order of the Centre to cancel licenses of 18 pharmaceutical companies on the charges of manufacturing spurious medicines. The decision has come after inspection by Drugs Controller General of India (DGCI) on 76 companies across 20 States of the Country. During a recent crackdown 70 companies in Himachal Pradesh, 45 in Uttarakhand, and 23 in Madhya Pradesh were also found producing spurious drugs against whom actions have been initiated. In fact, we need zero tolerance and more stringent action to tame this crime against humanity risking lives of innocent people. Actions such as merely show cause notice cannot be enough to put an end to stop production of spurious or poor quality drugs immediately.

The last, but not the least, the Centre must put a brake on the greed of drug manufacturers engaged in moneymaking through selling drugs at very high margin of profit through numerous ways and means including manipulation in specifications and quantity of constituents of drugs with intention to go beyond the price control mechanism.

It is therefore imperative for the government to come out with a price control policy for all drugs and medical equipment to save people from unfair level of prices reportedly from above 10 per cent up to 800 per cent profit margin. (IPA Service)