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, the cost of paracetamol has surged from Rs. 350 per kilogram before COVID-19 to Rs. 900 per kilogram currently. Similarly, the price of anti-epileptic medication carbamazepine rose from Rs. 2,000 to Rs. 5,500 per kilogram, and antibiotics like ceftriaxone sterile and tazobactam increased from Rs. 6,600 to Rs. 8,200 and Rs. 47,000 to Rs. 55,000, respectively. Spray, an excipient for tablets, saw an increase from Rs. 500 per kilogram to Rs. 750 per kilogram, while aluminum foil for blistering tablets went from Rs. 325 to Rs. 525 since pre-COVID times.
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 a decline in quality. As demand remains high for certain forms of medication, legitimate manufacturers are unable to produce drugs due to fixed pricing, creating a gap that is filled by unregulated entities.
"Currently, the situation is the worst it has ever been. Legitimate manufacturers are losing market share and becoming demoralized," said the secretary general of SPIC in a letter to Prime Minister Narendra Modi. Over the past decade, the association has consistently warned the government about the dangers of over-reliance on China, especially given the adversarial relationship between the two nations.
He also claimed that bulk pharmaceutical wholesalers have been stockpiling certain raw materials to profit from price hikes, due to the absence of any government policy to curb this behavior. The Central Drugs Standard Control Organization (CDSCO) could play a significant role in addressing this issue given the current exceptional circumstances.
"While bulk pharmaceutical wholesalers are allowed to engage in opportunistic behavior by stockpiling, smaller companies suffer because larger pharmaceutical players dominate the available supply of bulk drugs," he noted.
"Unless the costs of APIs are also brought under price control, the maximum price tags of dose-form medications should be allowed to fluctuate according to the changing API cost. The government must take steps to alleviate the current challenges if it wants to ensure the availability of affordable quality generics for its population and the world," he added.
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