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To offset supply shortages, NPPA may hike prices of some medicines

The move comes in response to representations by pharmaceutical companies to relax price ceilings of several medicines, they added. However, it is not clear at this stage how much the prices may go up and the proposal might also be sent to other government bodies like NITI Aayog for deliberation, The Indian Express has learnt.

Written by Prabha Raghavan | New Delhi |
Updated: July 18, 2019 7:06:09 am
drug prices, drugs in india, shortage of drugs, prices of drugs, Health ministry, National Pharmaceutical Pricing Authority, JP Nadda, Indian express MRPs of formulations like antibiotics metronidazole and benzylpenicillin and BCG vaccine for tuberculosis could increase. (Illustration: C R Sasikumar)

The drug pricing regulator is mulling a proposal to increase prices of certain medicines under price control to offset potential shortages due to increasing prices of key ingredients used to make them, The Indian Express has learnt.

This means maximum retail prices (MRPs) of formulations like antibiotics metronidazole and benzylpenicillin, BCG vaccine for tuberculosis, leprosy medication dapsone and malaria drug chloroquine could increase, according to senior government officials aware of the development.

The move comes in response to representations by pharmaceutical companies to relax price ceilings of several medicines, they added. However, it is not clear at this stage how much the prices may go up and the proposal might also be sent to other government bodies like NITI Aayog for deliberation, The Indian Express has learnt.

While minutes of a meeting held by pricing regulator National Pharmaceutical Pricing Authority (NPPA) in late June mention that an upward price revision is being considered for 19 formulations, a senior official said the regulator has since curbed its list to 12.

NPPA’s minutes do not expand on which formulations it is considering. Queries sent to NPPA chairperson Shubhra Singh about this development remained unanswered by press time Wednesday.

“Many of these are essential, life-saving drugs that already had low prices, but price caps may be causing some companies to stop production,” the official cited above said.

Some of these molecules may be “disappearing” from the market as a result, said the official, adding that a move to increase their ceiling price is to make sure they remain in supply. If firms stop selling these drugs due to losses, it could also lead to stronger versions of such medicines being used, adding to a growing problem of drug resistance in the country, according to the official.

Formulations like metronidazole, BCG vaccine, dapsone and chloroquine have figured in the National List of Essential Medicines (NLEM) since 2003, while benzylpenicillin, previously deleted from the NLEM in 2011, was re-added to the list in November 2015.

Once a drug is included in the NLEM, the Department of Pharmaceuticals (DoP) notifies it for price control, after which NPPA caps its ceiling prices. These ceiling prices are increased or decreased to account for changes in annual wholesale price index (WPI).

NPPA wrote to some government departments, including DoP earlier this year, seeking amendments to India’s drug pricing regulations — Drug Price Control Orders — to allow for upward price revisions, another senior official said.

“There were representations made from certain companies on the impact of increasing costs of APIs, and many formulations for which NPPA has received requests (for upward price revisions),” said the official. APIs, or active pharmaceutical ingredients, are key ingredients used to give a drug its therapeutic effect. NPPA can use extraordinary powers under paragraph 19 of the order to fix new prices, if it feels such upward revisions are required ‘in public interest’,” the official added.

With India still dependent on China for over 60 per cent of its API requirements, higher API costs for price-controlled medicines eat into profits and sometimes make production of these drugs unviable here, according to an executive of a large drug maker.

“Suppliers of key ingredients do not want to negotiate the prices they charge companies, because they are not affected by price control,” the executive told The Indian Express on condition of anonymity. In such an environment, firms will begin to exit market over a period of time, the executive said. In cases where a firm has to continue supplying the drug because it is the only manufacturer or it has majority market share, it could still lead to supply shortages, as per the executive. “The company will continue to suffer and the volumes will go down, which means patients might not get access to these drugs going forward,” the person said.

“Despite tight control of NPPA norms to maintain supplies of such drugs, there have still been some instances of shortages,” the executive said.

For instance, costs of ingredients to make vitamin C went up as much as 250 per cent, leading to a 25-30 per cent shortage of this drug in India last year, the executive further said.

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