Understanding the Impact of Rising API Costs on Drug Pricing
The SME Pharma Industries' Confederation (SPIC) has said that considering the rising cost of active pharmaceutical ingredients (APIs) and excipients, the maximum price tags of medications should be adjusted according to the changing ingredient cost periodically.
In recent months, the cost of bulk drugs has increased significantly. For instance:
- Paracetamol: Increased from ₹350/kg to ₹900/kg
- Carbamazepine: Rose from ₹2,000/kg to ₹5,500/kg
- Ceftriaxone sterile: Increased from ₹6,600 to ₹8,200
- Tazobactam: Jumped from ₹47,000 to ₹55,000
The maximum price tags for drugs have not been adjusted promptly by the National Pharmaceutical Pricing Authority (NPPA), even when the cost of raw materials exceeds the fixed price of the drug. This lack of adjustment has led to quality concerns in the industry.
"Currently, the situation is the worst it has ever been. Legitimate manufacturers are losing market share," said the secretary general of SPIC in a letter to Prime Minister Narendra Modi. The association has consistently warned about over-reliance on China for APIs.
Bulk pharmaceutical wholesalers have been stockpiling raw materials to profit from price hikes, with no government policy to curb this behavior. The Central Drugs Standard Control Organization (CDSCO) could help address this issue.
"Unless API costs are brought under price control, medication prices should fluctuate with API costs. The government must act to ensure affordable quality generics," the SPIC representative concluded.
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