Essential medicines set for a highest ever price rise of 12% this year

Prices of 900 formulations are expected to increase to reflect annual change in WPI

Prices of essential medicines, including those to treat heart conditions and diabetes, could increase by more than 10 per cent in 2023 to mark a second year of rise and the highest ever.

In line with the annual change in the wholesale price index (WPI) in 2022, the government is set to allow a 12.2 per cent increase in prices of drugs under the National List of Essential Medicines (NLEM).

“Based on the wholesale price index (WPI) data provided by the Office of the Economic Advisor, Department of Industry and Internal Trade, Ministry of Commerce and Industry, the annual change in the WPI works out as 12.1218% during the calendar year 2022 over the corresponding period in 2021,” said Rashmi Tahiliani, joint director, pricing, National Pharmaceutical Pricing Authority (NPPA).

Prices of 384 molecules, which correspond to 900 formulations across 27 therapy areas, are expected to increase by 12 per cent. Non-scheduled drugs, which are out of the NLEM, will be allowed to have an annual price increase of 10 per cent.

Last year, the NPPA had allowed the pharmaceutical industry to increase prices by around 10 per cent.

“The WPI while increasing the price of the drugs may help the industry to take care of increases in costs and others. This is the highest WPI ever as last year it was around 10 percent,” said Hari Natarajan, founder and managing partner at Pronto Consult, a market research firm for the pharmaceutical industry.

The industry is happy with two straight years of double-digit price growth in NLEM drugs.

“Every year we can typically take price hikes in the range of 0.5 to 4 percent based on WPI. A 12% hike would be the highest ever since DPCO 2013 after a 10 percent or so hike last year," said a top official of a pharmaceutical lobby group.

In 2016, the drug firms reduced prices of scheduled drugs as the annual change in WPI was minus 2.71 per cent in 2015 over the previous period.

Groups had lobbied the NPPA for drug prices to be increased, citing a steep rise in input costs. In July 2021, the NPPA allowed a one-time price rise of 50 per cent for three key drugs that are used as the first line of treatment:- ibuprofen (analgesic), ranitidine (antacid) and carbamazepine (epilepsy).

Growth in the domestic pharmaceutical market in 2022 was driven by price rise. The Indian pharmaceutical market (IPM) last year reported pricing growth but volume was muted, data from market intelligence firm AWACS showed. GSK Pharmaceuticals marquee antibiotic brand Augmentin has emerged as the highest selling drug in the country in 2022 with a 27 percent growth during the year.

Data shows that in calendar year 2022, price driven growth rate has been 6 percent; growth from new products has been 1.7 percent, while volume growth has been zero. Segments like gastroenterology (7.6 percent), respiratory (7.1 percent) and pain and analgesics (7.1 percent) have seen the maximum price growth. Cardiac drugs, neurological ailments drugs, vitamins and urology segment drugs have also seen strong growth.

Sheetal Sapale, president (marketing) at pharma market research company AWACS, said that diabetic drugs dapagliflozin and sitagliptin going off-patent shaped the growth of the anti-diabetic market. “Amongst the new molecules and combinations launched, it is the dapagliflozin combinations with sitagliptin and vildagliptin and molnupiravir molecule that have managed to generate decent revenue,” she said.

	New Product Growth (%)	Price Growth (%)	Volume growth (%)
IPM	1.7	6	0
Cardiac	0.7	6.5	1.2
Anti-infectives	0.4	4.4	-10.2
Gastroenterology	0.9	7.6	1.2
Anti-diabetic	4.4	3.2	-1.8
Vitamins	1.9	6.1	-2.6
Respiratory	2	7.2	3.1
Pain/Analgesics	1.4	7.1	3
Dermatology	2	6.3	3.8
Neurology	2.6	6.5	2.3
Gynaecology	6.1	5.9	8.2
Ophthalmology	1.5	6.9	7.9
Hormones	0.6	5.6	-1.8
Urology	0.8	6.9	6.5