Prices of 651 essential drugs slashed as NPPA revises limits

The National Pharmaceutical Pricing Authority (NPPA) last month fixed the wholesale price index (WPI) rate for calendar year 2022 at 12.12%, allowing drug manufacturers to raise prices of essential drugs within this cap against 2021 prices. These drugs include pain relievers, antibiotics, anti-infectives, and heart medications. The new prices have come into effect from April 1.

The government controls the prices of drugs through the Drugs Price Control Order (DPCO), 2013. Essential drugs or formulations have a ceiling price, which can be increased every year based on the WPI rate set by the government. “However, in September 2022, the Ministry of Health and Family Welfare amended the National List of Essential Medicines (NLEM) to include 870 medicines. These drugs were prescribed under DPCO, 2013 and NPPA has started revising the legal maximum prices of these drugs.”

“Out of 870 essential medicines, 651 have new highest prices, resulting in an average reduction of 16.62%. Therefore, instead of the expected increase of 12.12%, the expected reduction in the legal maximum prices of these 651 essential medicines is 6.73% on an average,” the official said.

Health Minister Mansukh Mandaviya said, ‘In November 2022, the government amended the list and prices of essential medicines. The task of revising the applicable ceiling price of such notified drugs under DPCO, 2013 has been taken up by NPPA. So far, new ceiling prices for 651 out of 870 essential medicines have been notified. Due to which the approved maximum price of drugs has come down by an average of 16.62%.

“As a result, consumers will save an estimated 3,500 crores annually. The company can increase the prices of medicines to the extent of 12.12% of the valid ceiling price of 651 essential medicines linked to WPI with effect from April 1, 2023. In a tweet, Mandaviya said, even if the company hikes the price in full, an average reduction of 6.73% is expected.

The move coincides with a surge in Covid infections in India with active cases rising from 18,389 to 20,219 in the last 24 hours. However, these infections have not been as fatal as the first and second wave of the COVID-19 pandemic.