Pharma lobby for hiking cost of drugs under govt price control
New Delhi: A sharp rise in prices of commonly used drug raw materials from China has prompted a pharmaceutical industry lobby to seek higher retail prices of medicines that are under government price control. The group has warned that failure to do so may lead to a shortage of medicines.
With most small drug makers dependent on imports of active pharmaceutical ingredients (APIs) from China, Federation of Pharmaceutical Entrepreneurs (FOPE) has sought a proportionate change in prices of medicines covered by the Drug Price Control Order (DPCO).
The Indian pharma industry, particularly small drug makers, has been hurt by a shutdown of API manufacturing units in China because of environmental concerns. According to B.R. Sikri, president of FOPE, “prices of most of the commonly used APIs have increased in the range of 50% to 200% in a period of 3-4 months. The pharmaceutical market is dependent on imports to the tune of almost 70% of its APIs requirements.”
Bulk drugs or APIs are the active raw materials used in a drug that give it the therapeutic effect. The Chinese government crackdown on API manufacturers has not only led to a rise in prices of raw material but has also caused supply disruptions, added Sikri.
“You will acknowledge the fact that in the last few months rupee has devalued and as a consequence the cost of imported goods have gone up coupled with the other factors in China. The prices of most of the APIs have increased too,” said the letter. Mint has reviewed a copy of the letter.
In their letter, the industry lobby group has said that the price of rabeprazole, a treatment for acid reflux and stomach ulcers, has more than doubled to ?7,500 in August from ?3,650 in April and May. Likewise the price of telmisartan, used to treat high blood pressure, rose to ?7,000 in August from ?4,500 in April-May.
“As pharmaceutical formulation market is covered under price control and prices can only be revised once in a year that too on the basis of WPI in case of scheduled drugs and maximum 10% in case of non-scheduled drugs, such price increases of APIs is making the costing of the formulations unviable for the manufacturer with the possibility of shortages,” added the letter.
Industry experts are also of the view that supply disruptions are likely to be seen across therapies in days to come. Mint had last month reported a shortage of vitamin C tablets in the market.
“The prices of key raw materials have gone up 30-60% in the last one year. Unless formulators are able to absorb the increased prices of APIs (whether imported or indigenous), the patients may experience some shortages of medicines,” said D.G. Shah secretary general of Indian Pharmaceutical Alliance (IPA) had said last month.
Over the past year, nearly 150 API manufacturers in China have shut their factories in a bid to comply with stricter environmental standards.
Indian drug makers have long been demanding a policy to attain self sufficiency in the manufacturing of APIs. In 2013, the government formed a panel headed by the then director general of Indian Council of Medical Research V.M. Katoch, which submitted its report in 2015.
In April this year, the government formed a high-level task force to study global practices and draw up a plan aimed at boosting domestic production of APIs. However, the proposals are yet to be implemented.