Lok Sabha Question No. 3232 (UNSTARRED), answered on 2021-12-17
Subject: Price of Medicines
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Rahul Kaswan

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF PHARMACEUTICALS

LOK SABHA UNSTARRED QUESTION NO.†3232 TO BE ANSWERED ON 17 th  DECEMBER, 2021

## Price of Medicines

## †3232. SHRI RAHUL KASWAN:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) the percentage hike registered in the prices of medicines during the last five years, medicinewise;
- (b) the details of medicines of which the prices have decreased during the said period; and

(c) whether the manufacturers of medicines have sought permission from the Government for increasing the price of some medicine and if so, the details thereof, medicine-wise and the

response of the Government thereto?

## ANSWER

## MINISTER IN THE MINISTRY OF CHEMICALS AND FERTILIZERS (Dr. MANSUKH MANDAVIYA)

(a): National Pharmaceutical Pricing Authority (NPPA)  under the Department of Pharmaceuticals fixes the ceiling price of scheduled medicines specified in the first schedule of the Drugs (Prices Control) Order, 2013 (DPCO) in accordance with the provisions of DPCO. All  manufacturers  of  scheduled  medicines  (branded  or  generic)  have  to  sell  their  products within the ceiling price (plus applicable Goods and Service Tax) fixed by the NPPA.  The ceiling  price  of  a  scheduled  formulation  is  fixed  based  on  average  retail  price  of  the  said formulation having market share of one or more than one percent. As ceiling price is based on average of retail price of medicines already available, there is a reduction in prices while fixing retail price of scheduled medicine of an existing manufacturer. Further, the ceiling price of scheduled medicines are revised on the 1 st day of April every year on the basis of Wholesale Price Index (WPI) for preceding calendar year on or before 1 st April of every year. WPI for last six years is as under:

|   Year | WPI Increase/Decrease (%)   |
|--------|-----------------------------|
|   2021 | 0.53638%                    |
|   2020 | 1.884668%                   |
|   2019 | 4.2662%                     |
|   2018 | 3.43812%                    |
|   2017 | 1.97186%                    |
|   2016 | (-) 2.7105%                 |

In case of a scheduled medicines, thus, the annual hike cannot be more than WPI. In case of non-scheduled formulations, NPPA ensures that their Maximum Retail Price (MRP) do not increase by more than 10% of their MRP during the preceding twelve months. The details of  retail/ceiling  prices  fixed/revised  by  NPPA  are  available  on  NPPA's  website,  viz., www.nppaindia.nic.in.

(b) NPPA has fixed the ceiling prices of scheduled drugs, including the essential medicines used for treatment of cancer, diabetes and HIV as well as heart and kidney diseases. Further, NPPA has put a cap on Trade Margin of 42 select non-scheduled anti-cancer medicines under 'Trade  Margin  Rationalization  (TMR)'  Approach  resulting  in  reduction  up  to  90%  of Maximum Retail Price (MRP) of 526 brands of these medicines. NPPA has also brought 106 non-scheduled anti-diabetic and cardio vascular drugs under price control by invoking extra ordinary powers in public interest. The total annual savings on account of revision of ceiling prices of medicines under National List of Essential Medicines (NLEM), price control of antidiabetic & cardiovascular, fixation of ceiling price of stents, knee implants and capping of TMR on anti-cancer are estimated to the tune of Rs. 12,500 crore.

While there has been no general decease in prices during last 5 years on account of change in WPI, there was a decrease in the prices during the year 2016 as compared to prices in the year 2015, WPI during 2016 was negative.

(c): Representations are received by NPPA from time to time for upward revision of prices of the drugs on account of increase in raw material cost, transportation cost, other input cost, etc. These representations are examined & considered after scrutiny on a case-to-case basis.

NPPA has invoked extra ordinary powers in public interest under para 19 of DPCO 2013 for upward revision of the ceiling prices of the twenty-one scheduled formulations of 12 drugs by giving one-time increase of 50% from the present ceiling price in December 2019. Further, in July, 2021 NPPA permitted for upward revision of the ceiling prices of the nine scheduled formulations of 3 drugs by giving one-time increase of 50% from the present ceiling price in July 2021.

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