It’s not just pulses that’s burning a hole in the common man’s pocket. Consumers should now brace themselves for the likely price rise of the commonly-used medicines such as folic acid and multivitamins.
Prices of Chinese active pharmaceutical ingredient (API) — the core substance used in producing medicines — have skyrocketed over the last two years, forcing drug makers to demand revision of prices from the National Pharmaceuticals Pricing Authority (NPPA) to cover for rising costs.
The drug makers are not allowed to fix prices beyond a permitted ceiling price, where mostly the increase is not beyond 10%. Drug makers say that they have not been able to raise medicine prices factoring in the sharp jump in imported APIs, most of it sourced from China.
Besides, the depreciation of the rupee, which has fallen from about 61 to a dollar last year to about 65 to a dollar currently, has also pushed up landed cost of imported APIs.
“There is a huge impact on our costs due to devaluation of the rupee against the dollar. Alongside, 90% of API imports are from China, where it is playing a virtual monopoly by pushing up the prices significantly,” said BR Sikri, vice-president - Northern Zone Bulk Drug Manufacturers’ Association.
Price of folic acid, which is used to treat anaemia, has gone up from Rs 4,000 per kg to Rs 42,000 per kg in the last one year, an increase of 1,000%.
The drug price watchdog NPPA is now mulling to allow the drug makers to revise prices, exceeding the fixed price ceilings.
“The prices of some of the APIs have gone up substantially rendering the production or sales of drug totally unviable. However, there is no specific provision in Drug Price Control Order (DPCO), 2013 to deal with such situation,” said a note written by the NPPA to industry associations. “As a result, it has been decided to draft guideline for revision of prices of scheduled formulations.”
However, the NPPA is still working out on the guidelines to decide that how much price rise would be passed on to the end consumer.
Pharma firms such as Sun Pharmaceuticals, Lupin, Mankind Pharmaceuticals, Glenmark, among others are reeling under the significant price increases, impacting their margins.
“We are absorbing the phenomenal price rises since last one year and are looking for a way out,” said RC Juneja, chairman, Mankind Pharmaceuticals. “China is clearly exploiting its monopoly.”
If the NPPA allows drug makers to revise drug prices in proportion to the increase in prices of the APIs, the drug prices will go up phenomenally.
“The increase in prices of the APIs varies within 10% to 1,000%, which means the increase in market prices of drugs could also range between the same bracket,” added Sikri.