NPPA under fire for 50% rise in drug prices, panel demands explanation

Parliamentary panel slams drug pricing regulator for hike on 11 drugs used for treating conditions such as asthma, glaucoma, thalassemia, tuberculosis, and mental health disorders

India’s drug pricing regulator, the National Pharmaceutical Pricing Authority (NPPA), has faced criticism from the parliamentary standing committee on chemicals and fertilisers for authorising a 50 per cent price hike on 11 drug formulations in October. The committee highlighted that this decision disproportionately affects the ‘poorest of the poor’ across the country, according to a report by The Economic Times.

 

Expressing ‘serious concerns’, the committee has sought a detailed explanation from the NPPA. In its report, the committee noted that the price increase was announced on October 15, attributing the decision to multiple applications citing rising production costs over the years. However, the committee pointed out that such price hikes have a widespread impact, particularly on vulnerable sections of the population, and criticised the drug pricing regulator for allowing this situation to develop, the report said.

 

 

According to the panel, the NPPA is responsible for regulating the prices of 920 essential medicines, including oxygen, general anaesthetics, and opioids. While price adjustments for essential medicines are typically linked to changes in the Wholesale Price Index (WPI), the NPPA also oversees pricing to ensure manufacturers do not raise the maximum retail price (MRP) of a drug by more than 10 per cent within a year, the report mentioned.

Price hike to ensure drug availability?

The NPPA invoked Paragraph 19 of the Drugs Prices Control Order to approve the price hike, a provision that allows it to adjust drug prices under exceptional circumstances. The regulator justified its decision, stating that suppliers of certain formulations had proposed discontinuing supplies due to financial unviability.

 

The price increase aimed to ensure the continued availability of these 11 drugs, which are primarily used as first-line treatments for conditions such as asthma, glaucoma, thalassemia, tuberculosis, and mental health disorders, the report further said.

NPPA directs price-cut for anti-cancer drugs

In October this year, the NPPA instructed manufacturers to lower the maximum retail price (MRP) of three anti-cancer medicines — Trastuzumab, Osimertinib, and Durvalumab — as part of the government’s initiative to make essential drugs more affordable.

 

“This is in pursuance of the announcement made in the Union Budget for the year 2024-25 exempting these three anti-cancer medicines from customs duty. The Department of Revenue, Ministry of Finance, issued a notification recently reducing the customs duty on these three drugs to nil,’’ stated an official release from the central government.

 

Additionally, the Department of Revenue had earlier issued a notification reducing the GST on these medicines from 12 per cent to 5 per cent, effective October 10, 2024. 

“Accordingly, there should be a reduction in the MRP of these drugs in the market, and the benefits of reduced taxes and duties should be passed on to the consumers,’’ the release further noted.

 

As a result, the NPPA has issued this directive, mandating manufacturers to share updated price lists or supplementary price lists with dealers, State Drugs Controllers, and the government. They are also required to report the revised pricing information to the NPPA using the appropriate forms (Form-II/Form-V).