MUMBAI: Prices of widely used medicines—key antibiotics, anti-allergics, anti-malarial drugs,

and Vitamin C—will increase soon.

Invoking for the first time a provision "in public interest", the drug prices regulator NPPA on Friday revised prices of 21 formulations, allowing a one-time increase of 50% from the existing ceiling price.

The decision, “in exercise of extraordinary powers in public interest” under paragraph 19 of the Drugs Prices Control Order, 2013, has been taken to ensure their availability, official sources say. Till now, this provision has only been used to reduce prices, for example, to bring cardiac stents and orthopaedic implants under price control.

‘Exceptional step to ensure availability’

The NPPA’s move is in response to the pharma industry’s requests over the last two years to allow upward revision in prices. The industry had sought a hike in the wake of rising prices of active pharmaceutical ingredients (raw materials), and fluctuation in exchange rates, resulting in “unviable and unsustainable production’’.

Prices of key APIs imported from China have jumped as high as 200% in certain cases due to a shake-up in Chinese factories in the wake of environmental concerns.

According to DPCO, prices of scheduled formulations can be revised only once a year—in April, based on the change in the wholesale price index of

in the preceding calendar year.

The decision, taken in the NPPA meeting held on December 9, includes 21 scheduled formulations (12 drugs) which are low-priced drugs, and have been under repeated price control.

Elaborating on its decision, NPPA says most of these drugs are used as the first line of treatment, and are crucial to the country’s public health programme. Also, many companies have sought permission to discontinue their products, on account of the market being unviable.

Further, “its mandate is to ensure availability of drugs at affordable prices. But while ensuring affordability, access cannot be jeopardized and life-saving essential drugs must remain available to patients. Therefore, NPPA is of the considered view that unviability of these formulations should not lead to a situation where these drugs become unavailable in the market, and patients are forced to switch to costly alternatives”, the order says.

As per policy, pricing of drugs cannot be cost based, and is market determined, but this is an “exceptional measure’’ being undertaken to address the situation that’s arisen due to repeated price control, it adds.

Earlier in January, NPPA deliberated upon 49 such industry applications involving 72 formulations, seeking an upward revision of ceiling prices under paragraph 19 of DPCO, 2013, and shortlisted 19 formulations. It also constituted a committee under senior health and pharma ministry officials, including the drugs controller general, to examine the issue based on parameters of essentiality, market share and available alternatives.

The revision under Para 19 of DPCO 2013, ‘should be undertaken only in exceptional circumstances as there is neither a precedent nor any formula prescribed for upward revision of ceiling prices’’, a NPPA order said.

Further, after shortlisting the 12 formulations, NPPA referred the issue to the standing committee on affordable medicines and health products, Niti Aayog, for the modalities to be followed for such cases. The panel recommended that there was a need to revisit the prices of the 12 formulations presented to it for upward price revision under para 19 of DPCO 2013 by allowing one-time 50% increase from the present ceiling price. It was also recommended that NPPA may examine any other additional formulations/ molecules for upward price revision and present to the Authority.

Recently, a PwC India report which noted the increase in API prices as high as 100%, also said ‘While the market-based methodology of annual revision in ceiling prices is a welcome feature of DPCO 2013 (as compared to the method followed in DPCO 1995), certain anomalies call for swift interventions from the government to allow an appropriate one-time increase of affected scheduled formulations’.