Govt weighs linking medicine prices to wholesale inflation
The government is considering the feasibility of linking the permitted annual increase in prices of non-scheduled formulations to the wholesale price index (WPI) in its bid to regulate the prices of drugs.
The move, if implemented, could deal a big blow to the pharma industry.
The Niti Aayog has recommended an amendment to the Drug Price Control Order (DPCO) 2013, suggesting that prices of both scheduled and non-scheduled drugs be linked to WPI. Niti Aayog has also suggested development of a separate index for pharmaceutical products.
“The medicine prices may be linked to pharma commodities WPI rather than general WPI for both scheduled as well as nonscheduled drugs,” said the proposal. Mint has reviewed the copy of the proposal.
“The proposal to link price revision of non-scheduled formulations with WPI is actively under consideration,” said two people aware of the matter.
The department of pharmaceuticals (DoP) under the chemicals ministry and Niti Aayog recently had a meeting with the Prime Minister’s Office (PMO) to discuss the proposed changes in the DPCO 2013. According to DPCO 2013, prices of scheduled drugs are revised in line with the wholesale price index (WPI) of the previous calendar year. As a corollary, the companies are even required to cut the prices if there is a decline in the annual WPI.
However, manufacturers of medicines not under price control are allowed to increase the maximum retail price by 10% annually.
According to DoP, only about 850 drugs are under price control as against the more than 6,000 medicines available in the market of various strengths and dosages.
The recommendation, if accepted, will bring down prices of non scheduled drugs.
Pharma lobby groups said the recommendation is without a doubt a considerable blow to an already beleaguered industry.
Pharma lobby groups claim that the proposal is not seen as favouring the industry. Some of them have even approached the PMO to rescind the proposal.
NEW DELHI: