New Delhi: The National Pharmaceutical Pricing Authority of India (NPPA) increased the ceiling prices of eight drugs on October 14, Monday, citing ‘extraordinary circumstances’ and ‘public interest’.
The NPPA comes under the department of pharmaceuticals under the Union Ministry of Chemicals and Fertilizers. The NPPA was constituted in 1997 to regulate the ceiling prices of drugs. It has the power to fix drug costs under what is known as a ‘Drug Price Control Order’ (DPCO) issued by the government under the Essential Commodities Act.
The NPPA fixes ceiling prices of ‘scheduled drugs’ – the ones which are covered under India’s National List of Essential Medicines comprising currently 960 formulations of more than 350 drugs. A drug can have more than one formulation. These drugs cannot be sold at a cost more than what is sealed by the NPPA.
The drugs, the prices of which were increased on October 14, comprise medication like Salbutamol (used for asthma), Streptomycin powder for injection (used in case of tuberculosis), lithium (for bipolar disorder), and Pilocarpine eye drops (for glaucoma), among others. Their prices have been increased by 50% of their current ceiling.
The full list of these drugs is below:
As routine practice, the NPPA increases the ceiling prices every financial year starting April 1, on the basis of Wholesale Price Index (WPI) of the preceding year. For example, the NPPA allowed a price hike to the tune of 0.00551% for medicines to be sold from April 1, 2024, or thereafter, taking the WPI into account.
But on October 14, the NPPA cited ‘extraordinary’ circumstances to effect the 50% hike.
Section 19 of the DPCO gives power to the government to revise the ceiling cost, upwards or downwards, in addition to the annual routine practice. This can be done in extraordinary circumstances.
The Section 19 states:
“Notwithstanding anything contained in this order, the Government may, in case of extraordinary circumstances, if it considers necessary so to do in public interest, fix the ceiling price or retail price of any Drug for such period, as it may deem fit and where the ceiling price or retail price of the drug is already fixed and notified, the Government may allow an increase or decrease in the ceiling price or the retail price, as the case may be, irrespective of annual wholesale price index for that year.” [Emphasis added]
Govt’s rationale
The NPPA has stated that it has increased the prices in the larger public interest. It said that the drugmakers had approached it asking for revision in prices citing a few reasons like “increase in the cost of active pharmaceutical ingredients [ingredients needed to make a drug], cost of production, change in exchange rate, etc.”
The NPPA claimed that these factors have led to “unviability in sustainable production” of drugs, and some of drugmakers, according to it, had even applied for “discontinuation of some of the formulations on account of their unviability.”
The NPPA did not give any further details on this.
Dr Gurinder S. Grewal, a member of the Association of Doctors for Ethical Healthcare (ADEH), and former president of the Punjab Medical Council, said the government’s rationale misses various important details.
“For which of these drugs, on an individual basis, has the cost of production gone and by how much?” Grewal asked.
“What are the contributing factors for the cost of production going up specific to each drug?” Grewal further pressed, saying the rationale given by the government, without specifying these details, appears vague and opaque.
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He added that these were “poor people’s drugs”, used against common diseases, and often taken for a long period of time for illnesses that are chronic.
The government’s own reports and surveys say that expenditure on medicines is the major driving factor of the escalating healthcare expenses.
Consistent expense, a drug on the decline
The latest National Health Accounts – a report released by the government last month – said out of the current healthcare expenditure, about one-third (30.84%) is incurred as ‘pharmaceutical expenses’. This includes prescribed medicines, over-the-counter drugs, those provided during inpatient or outpatient care, or any other way by which one seeks health services.
In fact among the 17 healthcare functions listed in the report, which included expenses on hospital admission or OPD care, it was on medicines (prescribed and over-the-counter) that people were spending the second highest. The highest expenditure was on in-patient care.
Dr Parth Sharma, a community physician and a public health researcher, questioned the inclusion of one particular formulation in the list of scheduled drugs – highlighting its declining utility in the treatment of the disease it works against.
“According to all the existing guidelines, the tablet formulation of salbutamol [used by asthma patients] should not be given as it is slower in action and is associated with significant side effects,” he said.
“Inhalers, which are known to work better, [instead of tablet form of salbutamol] are out of stock in most government hospitals and cost Rs 300-400 in private pharmacies, which make them unaffordable for poor people,” Sharma said.
