India Fears Essential Drug Shortage as Manufacturers Ask Gov't to Let Them Hike Prices

Prime Minister Narendra Modi often cites the manufacturing capacity of the country’s pharma industry and says India is playing the role of pharmacy to the world. The country has delivered medicines to more than 150 countries during the pandemic.

Indian drug manufacturers have urged the Narendra Modi government to let them urgently raise the prices of medicines in the wake of a steep rise in the cost of raw materials over the last month.

Mahesh H. Doshi, national president of the Indian Drug Manufacturers’ Association, told Sputnik that further erosions in operating margins could lead to shortages of essential medicines, including at government hospitals.

“We're asking to raise the prices because prices of raw materials have increased by more than 200 percent in a month. Simultaneously, packing materials and logistic costs have also picked up,” Doshi told Sputnik.

The manufacturers met Mansukh Mandaviya, the federal health minister, to request permission to hike prices by 20 percent with immediate effect.

The industry has lambasted a 50 percent jump in prices of active pharmaceutical ingredients (API) across the board since September. China fulfils nearly 70 percent of India’s active pharmaceutical ingredients (APIs) requirement, and accounts for around 90 percent of life-saving antibiotics such as cephalosporins, azithromycin, and penicillin.

“Largely, our requirements of API import from China and prices are increasing on a daily basis. I do not know the internal reasons but exporters cite curtail in the production and issue related to carbon credit as some of the reasons behind the steep rise in prices,” Doshi said.

The prices of excipients such as glycerin and propylene glycol have also increased by more than 250 percent in a year.

“If the government doesn’t allow us to increase the prices, then we can’t say right now what step will be taken because there is a limit to sustain the pressure on operating margins. At some point, we will halt the production,” Doshi underlined.

Under India’s Drug Price Control Order 2013, drug manufacturers can hike prices once a year, depending on the wholesale price index (WPI) jump. Industry players cite the case of paracetamol, the API price of which grew by 300 percent while the ceiling price was allowed to increase by just 3 percent.

“We are working closely with the government and trying to ensure an abundant supply of all the molecules in the market. Government must have some constraint in giving price hike, but they must consider our difficulties as well,” Doshi concluded.

India's pharmaceuticals industry has grown 37 percent year-on-year and 15 percent sequentially in the first quarter of the financial year 2021-22. But most of this growth is driven by sales of COVID drugs. Due to the cheaper cost of manufacturing, Prime Minister Modi has urged global manufacturers to set up their factories in India.