While non-regulated industries can pass on the high cost to consumers, the pharmaceutical industry needs permission of the regulator, the National Pharmaceutical Pricing Authority (NPPA), to raise prices. With the regulator showing enthusiasm only in reducing prices, the industry is knocking the doors of its administrative ministry, the chemicals ministry.
The representatives of the Indian Drugs Manufacturers' Association, the body of small and medium drug-makers, met chemicals ministry officials today and sought a hike in prices.
Industry executives said some companies were stopping production of medicines facing severe cost pressure. The secondary stockist audit figures of market research firm ORG IMS point out that the value growth of the Indian pharmaceutical market for May 2008 was 7.5 per cent, much lower than the 12.3 per cent growth in April 2008.
However, the figures are not that dismal when it comes to the moving annual total (MAT) value, which was 14.1 per cent in May 2008, as against 14.7 per cent in the preceding month.
"Paracetamol raw material (bulk drug), which was available at Rs 180 per kg less than a month ago, is costing Rs 340 per kg, with the price still rising. Similarly, prices of Nimesulide, Ofloxacillin, Tinidazole, Methylcobalamine and Ciprofloxacin have risen 40-100 per cent," said Jagdeep Singh, secretary general, Small Pharma Industries Confederation.
High crude oil prices are also putting pressure on the companies as many raw materials like paracetamol are derived from petroleum base. "The last price reduction by the NPPA was on the basis of the appreciation of the rupee against the dollar. The scenario has reversed but there has been no hike in prices," said an industry official.
