Lok Sabha Question No. 793 (UNSTARRED), answered on 2024-07-26
Subject: Price Hike of Medicines
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Shri Rajesh Ranjan

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

LOK SABHA UNSTARRED QUESTION NO. †793 TO BE ANSWERED ON 26 th  July, 2024

## Price Hike of Medicines

## †793 Shri Rajesh Ranjan:

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

- (a)  whether  the  National  Pharmaceutical  Pricing  Authority  renders  its  advice  to  the Government regarding the price hike of medicines every year;
- (b) if so, the details thereof, year-wise;
- (c) whether the prices of medicines have increased substantially and the prices of some of them
- by 50 to 100 percent during the last three years;
- (d) if so, the details and the reasons therefor indicating the percentage rise in medicine prices during the said period, year-wise;
- (e) whether the Government has permitted the Pharmaceutical companies to control the prices of various medicines; and
- (f) if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF CHEMICALS & FERTILIZERS (MS. ANUPRIYA PATEL)

(a)  &  (b): The  roles  and  responsibilities  of  the  National  Pharmaceutical  Pricing  Authority (NPPA) under the Department of Pharmaceuticals are governed by the provisions of the Drugs (Prices Control) Order, 2013 (DPCO). NPPA fixes the ceiling price of scheduled medicines as specified in the Schedule-I of the DPCO, 2013. All the 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.

As per the provisions of DPCO 2013, the ceiling prices of scheduled medicines are revised annually on the basis of Wholesale Price Index (WPI) (all commodities) for preceding calendar year on or before 1 st April of every year, which is notified by the Government on the 1 st day of April every year. The WPI increase is based on the data published by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India.  The WPI for last nine year are as follows:

|   Year | WPI Increase/Decrease (%)   |
|--------|-----------------------------|
|   2024 | 0.00551%                    |
|   2023 | 12.1218%                    |
|   2022 | 10.76607%                   |
|   2021 | 0.53638%                    |

|   2020 | 1.88468%    |
|--------|-------------|
|   2019 | 4.2662%     |
|   2018 | 3.43812%    |
|   2017 | 1.97186%    |
|   2016 | (-) 2.7105% |

Although, the annual permitted increase in the prices of Scheduled drugs is based on the increase in WPI (all commodities), the WPI increase is the maximum increase permissible which may or may not be availed by the manufacturers. Prices are increased or decreased by the manufacturers based on market dynamics.

(c) to (f): NPPA also fixes the retail price of a new drug based on Para 5 of DPCO, 2013 for existing manufacturers of scheduled formulation. A manufacturer is at the liberty to fix the maximum retail price of a non-scheduled formulation (branded or generic) launched by it. However,  as  per  the  provisions  of  DPCO,  2013  the  manufacturers  of  non-scheduled formulations are not allowed to increase the maximum retail price of such formulations by more  than  10%  per  annum.   Instances  of  overcharging  are  dealt  with  by  NPPA  under  the relevant provisions of DPCO, 2013.

*****