Cap on essential drugs to help consumers save Rs 3,500 crore: Mandaviya

Union Health Minister Mansukh Mandaviya on Monday said consumers will save around Rs 3,500 crore annually with the government capping the prices of the majority of essential medicines, hitting out at Congress President Mallikarjun Kharge.

On Sunday Kharge had taken a swipe at Prime Minister Narendra Modi over a reported hike in prices of some essential medicines, saying he has taken supari (contract) to pick pockets of the people.

Rebutting the Congress leader's claims, in a series of tweets Mandaviya said the ceiling prices of 651 out of 870 essential medicines have already been notified by the government so far bringing down the cost of drugs under the National List of Essential Medicines (NLEM).

While tagging Kharge's Twitter handle, Mandaviya in a tweet said that so far, new ceiling prices of 651 out of 870 essential medicines have been notified. Due to this, the approved ceiling price of medicines has decreased by an average of 16.62 per cent. As a result, consumers will save an estimated "Rs 3,500 crore annually".

According to the provisions of DPCO, 2013 made by the UPA government, every year the pharma companies increase or decrease the prices of medicines according to the WPI, he said.

But in November 2022, the government revised the list and prices of essential medicines, the health minister said.

The companies can increase the price of medicines from April 1, 2023, to the extent of 12.12 per cent of the ceiling price linked to WPI, he said.

The Janaushadhi Abhiyan being run under the leadership of Prime Minister Narendra Modi has led to a huge intervention on the supply side thereby creating competition in the market which deters companies from hiking prices, Mandaviya said.

The minister also asserted that even if the companies were to increase the full price, an average reduction of 6.73 per cent is estimated due to the capping of the ceiling prices by the government, he added.

Kharge had attacked the government following media reports that prices of many essential drugs and formulations saw a hike of over 11 per cent effective April 1.

His dig came a day after Prime Minister Modi at an event in Bhopal said that some people are hellbent to sully his image and they have given a supari (contract) for this purpose, colluding with certain people sitting in India and also outside the country.

Earlier in a tweet, the national drug pricing regulator NPPA said the cost of 651 essential medicines has come down by an average of 6.73 per cent from April with the government capping ceiling prices of a majority of the scheduled drugs.

The National Pharmaceutical Pricing Authority (NPPA) noted that the government has been able to fix the ceiling prices of 651 medicines so far out of the total 870 scheduled drugs listed under NLEM.

The health ministry amended NLEM in September 2022 and it now has a total of 870 drugs.

The NPPA noted that with the capping of ceiling prices, the cost of 651 essential drugs on average had already come down by 16.62 per cent.

"Due to this, the price of 651 essential drugs, which was to go up by 12.12 per cent, has actually come down by 6.73 per cent from April 1," NPPA said.

Consumers will benefit from this decline in prices despite a 12.12 per cent annual hike in prices of drugs based on WPI, it added. Annual hikes in prices of drugs listed in NLEM are based on WPI.

In a statement dated March 25, NPPA stated that the annual change in Wholesale Price Index (WPI) was 12.12 per cent for 2022. NPPA fixes the ceiling price of essential medicines of Schedule I under the Drugs (Prices Control) Order (DPCO) 2013.

The calculation for essential drugs is based on the simple average of all the medicines in a particular therapeutic segment with sales of more than 1 per cent.