Prices of 651 essential drugs decline as NPPA revises cap

The National Pharmaceutical Pricing Authority (NPPA) last month set the wholesale price index (WPI) rate for calendar year 2022 at 12.12%, allowing drug manufacturers to increase prices of essential medicines within this cap over 2021 prices. These drugs include painkillers, antibiotics, anti-infectives and cardiac medicines. The new prices kicked in on 1 April.

The government controls the prices of drugs through the Drugs Prices Control Order (DPCO), 2013. Essential medicines or formulations have a ceiling price, which can be increased each year based on the WPI rate set by the government. “However, in September 2022, the ministry of health and family welfare made changes to the National List of Essential Medicines (NLEM), adding 870 medicines. These medicines were scheduled under DPCO, 2013, and the NPPA began revising the valid ceiling prices of these drugs,” a senior health ministry official said.

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

Health minister Mansukh Mandaviya said, “In November 2022, the government revised the list and prices of essential medicines. Under DPCO, 2013, the work of revising the applicable ceiling price of such notified drugs has been initiated by NPPA. So far, new ceiling prices of 651 out of 870 essential medicines have been notified. Due to which the approved ceiling price of medicines has decreased by an average of 16.62%.”

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

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