Govt. hikes prices of essential medicines again, claims ‘it’s miniscule’

Subject: Schemes

Sec: Health

Context:

The National Pharmaceutical Pricing Authority (NPPA) implemented a slight increase of 0.00551 per cent in the Maximum Retail Price (MRP) of scheduled drug formulations for the fiscal year 2024–25, starting from April 1.

Details:

The adjustments aim to balance the cost of essential medicines with economic indicators, ensuring affordability while maintaining a stable pharmaceutical market.
This adjustment was made for 923 scheduled drug formulations and 65 retail formulations, as per the annual price revision based on the change in the Wholesale Price Index (WPI).
The adjustment reflects the annual change in the WPI during the calendar year 2023 compared to 2022, as reported by the office of the Economic Advisor, Department of Industry and Internal Trade, Ministry of Commerce and Industry.

Increase based on WPI:

Manufacturers are now permitted to adjust the Maximum Retail Price (MRP) of scheduled drug formulations in line with the recent Wholesale Price Index (WPI) change of 0.00551%, without needing prior government approval.
India regulates the prices of around 400 molecules and 960 formulations listed under the National List of Essential Medicines, and also monitors non-essential drug prices to prevent annual MRP increases exceeding 10%.
This policy, guided by the Drug Price Control Order (DPCO) of 2013, aligns price adjustments with WPI fluctuations.
The Health Ministry explained that the National Pharmaceutical Pricing Authority (NPPA) annually revises scheduled medicine prices based on WPI changes.

National Pharmaceutical Pricing Authority (NPPA):

The National Pharmaceutical Pricing Authority (NPPA), established by the Indian government in 1997 under the Ministry of Chemicals and Fertilizers, plays a crucial role in regulating drug prices.
It ensures that medicines are both accessible and affordable to the public, with the authority granted the power to mandate price increases of over 10% for drugs and devices listed on the National List of Essential Medicines (NLEM), all of which are under strict price regulation.
A notable shift in regulatory focus came with the introduction of the new National Pharmaceutical Pricing Policy in 2012 and the Drug Price Control Order (DPCO) in 2013.

National List of Essential Medicines:

The National List of Essential Medicines (NLEM) is a list released by the Ministry of Health and Family Welfare.
The medicines listed in the NLEM are sold below a price ceiling fixed by the National Pharmaceutical Pricing Authority (NPPA).
NPPA caps medicine prices and changes only based on wholesale price index-based inflation.
In India, it was framed on the lines of the Essential Medicines List (EML) released by the WHO.
The Ministry of Health and Family Welfare prepared and released the first National List of Essential Medicines of India in 1996 consisting of 279 medicines. This list was subsequently revised in 2003, 2011, 2015 and 2022.

Price hiked to save firms:

In a significant move in 2019, the National Pharmaceutical Pricing Authority (NPPA) leveraged its emergency powers to increase the ceiling prices of 21 essential drugs by 50%.
The Drug Price Control Order (DPCO) of 2013 permits an annual price adjustment for scheduled formulations in alignment with changes in the Wholesale Price Index (WPI).
Additionally, the NPPA sets the retail prices for new drugs for existing manufacturers of scheduled formulations under DPCO, 2013, aligning annual price increases with WPI revisions.
For non-scheduled formulations, manufacturers cannot increase the Maximum Retail Price (MRP) by more than 10% of the MRP from the preceding 12 months, with instances of overcharging being addressed by the NPPA as per DPCO 2013 provisions.

Dependence on China:

Despite India’s pharmaceutical industry being one of the most advanced among developing nations, ranking third globally in volume and 13th in value, it remains heavily reliant on China for bulk drugs and drug intermediates.
This dependency is significant, with about two-thirds of India’s total imports in this sector coming from China.
India has a significant role as a major exporter of bulk drugs, with the United States being the primary destination, followed by Brazil, Bangladesh, Turkey, China, the Netherlands, Nigeria, Vietnam, and Egypt.
India stands as a key supplier of bulk drugs to several developing countries, including Bangladesh, Nigeria, Vietnam, Egypt, Iran, and Pakistan, underscoring its substantial but complex position as both a major importer from China and a significant exporter, particularly to developing nations.

National List of Essential Medicines (NLEM)

The National List of Essential Medicines (NLEM) is a list released by the Ministry of Health and Family Welfare.
The medicines listed in the NLEM are sold below a price ceiling fixed by the National Pharmaceutical Pricing Authority (NPPA).
NPPA caps medicine prices and changes only based on wholesale price index-based inflation.
In India, it was framed on the lines of the Essential Medicines List (EML) released by the WHO.
The Ministry of Health and Family Welfare prepared and released the first National List of Essential Medicines of India in 1996 consisting of 279 medicines. This list was subsequently revised in 2003, 2011, 2015 and 2022.

Purpose:

Guide safe and effective treatment of priority disease conditions of a population.
Promote the rational use of medicines.
Optimize the available health resources of a country. It can also be a guiding document for:
State governments to prepare their list of essential medicines
Procurement and supply of medicines in the public sector.

Criteria for a Medicine to be Included in NLEM

Several factors are looked at before including a drug in the NLEM. These are:
Essentiality: A medicine may be essential considering the population at large and should fit into the definition mentioned earlier.
Changing disease burden: With time, the disease burden keeps changing in the country. At one point, TB might be more important to tackle. At the next moment, another disease like Covid-19 may become more important. So, the prevalent disease is considered while preparing the list.
Efficacy and Safety: The medicine must have “unequivocal” evidence of efficacy and wider acceptance based on its safety to be included in the list.
Cost-Effectiveness: The total price of the treatment must be considered while including the drug in NLEM. Only unit price may not be the best benchmark for this.
Fixed Dose Combinations (FDCs): The single-dose medicines are considered for inclusion in NLEM. FDCs are only included if they have a proven advantage concerning the therapeutic effect.
Turnover: High sales turnover alone is not considered a good benchmark for inclusion in the NLEM. Other factors are also required to be essentially considered for it.

When is a Medicine Deleted from NLEM?

A drug is deleted from the list if it gets banned in India. Also, it is removed if reports of concerns about drug safety emerge.
If medicine with better efficacy or favourable safety profile and better cost-effectiveness is now available, then it is removed from NLEM.

Source: TH