Pharma Pricing Regulator Fixes Ceiling Price Of 128 Formulations

The National Pharmaceutical Pricing Authority has finalised the ceiling prices of 97 scheduled formulations and approved revised ceiling prices of 31 formulations that are a part of the National List of Essential Medicines.

Under the revised Schedule I of the Drugs (Prices Control) Order, or DPCO, the NPPA notified the calculation and the maximum ceiling limit for prices that could be charged for listed essential medicines, according to the release issued on Jan. 6.

In its Dec. 30 meeting, the NPPA had announced ceiling prices for 97 drugs and revised ceiling prices of 31 others that were approved earlier in its Dec. 15 meeting.

It includes scheduled formulations like clonazepam (anti-seizure), sulfasalazine (large intestine swelling treatment), digoxin (heart conditions treatment) , ethambutol (tuberculosis medication), phenytoin (anti-seizure), atazanavir and ritonavir (treat HIV/AIDS), ceftriaxone powder for injection (bacterial antibiotic), cefotaxime powder for injection (bacterial antibiotic), and metoprolol (hypertension), among others.

The 128 (97+31) drugs, whose ceiling prices have been announced, were also a part of the earlier 2015 NLEM list and have been revised, Vishal Manchanda, pharma analyst with Systematix, told BQ Prime.

"The ceiling price announcement for newer drugs included in the 2022 list is still awaited," he said.

According to an ICICI Securities September 2022 report, a few noteworthy products in the revised list were Amikacin (antibiotic), Cefuroxime (antibiotic), Insulin Glargine (anti-diabetic), Itraconazole (anti-fungal medication), Mupirocin (topical antibiotic) and Teneligliptin (anti-diabetic).

The impact of their sale price and on the companies selling these newly-included products is yet to be seen.

Krishnanath Munde, associate director at India Ratings, said that he does not see any material impact from the revised ceiling limits.

"In comparison to the overall industry size, the drugs under the DPCO Act comprise around 15% of the market share and the changes would not materially impact any company or the overall industry," he said.

Manchanda said that while a few companies may be temporarily impacted, the ceiling price impact would be overshadowed by the price hike that the companies would be allowed to take in the upcoming year.

The DPCO allows the companies to take a price hike equivalent to the preceding calendar year's wholesale price index, which is representative of the inflation in the country.

Over the financial year 2018-22, companies manufacturing these scheduled drugs covered under the NLEM were allowed 0.5-4.2% year-on-year hike based on the WPI. For FY23, however, the limit was raised to 10.8% in line with the WPI of 2021.

“Since the WPI Index of 2022 is around 12%, the DPCO would permit pharma companies to take a hike to that extent for FY24, allowing them to offset the maximum ceiling related price-cut impact," Manchanda said.