NPPA faces scrutiny over 50% drug price hikes
New Delhi: India’s drug pricing regulator, the National Pharmaceutical Pricing Authority (NPPA), has come under scrutiny from the parliamentary standing committee on chemicals and fertilisers for permitting a 50 percent price increase on 11 drug formulations in October.
The committee criticised the decision, stating it disproportionately impacts the "poorest of the poor" in the country, according to The Economic Times.
The committee expressed "serious concerns," has demanded a detailed explanation from the NPPA.
In its report, it noted that the price hike, announced on October 15, was attributed to multiple applications from manufacturers citing rising production costs.
However, the panel criticised the regulator for allowing such a decision, emphasising its adverse impact on vulnerable sections of the population, the report stated.
As per the committee, the NPPA regulates the prices of 920 essential medicines, including oxygen, general anaesthetics, and opioids.
While price adjustments for these medicines are generally tied to changes in the Wholesale Price Index (WPI), the NPPA also ensures that drug manufacturers do not increase the maximum retail price (MRP) of a medicine by more than 10 percent annually, the report noted.
Price hike to maintain drug supply
To justify the price hike, the NPPA invoked Paragraph 19 of the Drugs Prices Control Order, a provision that allows price adjustments under exceptional circumstances.
The regulator explained that suppliers of these drugs had proposed discontinuing production due to financial challenges, necessitating the decision to ensure continued availability.
The affected drugs, primarily used as first-line treatments for conditions like asthma, glaucoma, thalassemia, tuberculosis, and mental health disorders, were deemed essential for uninterrupted patient care, the report added.
Anti-cancer drugs see price cuts
In October, the NPPA also directed manufacturers to lower the maximum retail prices of three anti-cancer medicines—Trastuzumab, Osimertinib, and Durvalumab—as part of a government initiative to make essential drugs more affordable.
“This is in pursuance of the announcement made in the Union Budget for the year 2024-25 exempting these three anti-cancer medicines from customs duty. The Department of Revenue, Ministry of Finance, issued a notification recently reducing the customs duty on these three drugs to nil,” an official release from the government stated.
In addition to the customs duty exemption, a prior notification from the Department of Revenue had reduced the GST on these medicines from 12 percent to 5 percent, effective October 10, 2024.
“Accordingly, there should be a reduction in the MRP of these drugs in the market, and the benefits of reduced taxes and duties should be passed on to the consumers,” the release added.
Following this, the NPPA instructed manufacturers to submit revised or supplementary price lists to dealers, State Drugs Controllers, and the government.
They are also required to report the updated pricing details to the NPPA using the prescribed forms (Form-II/Form-V).
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