DoP the ceiling price fixation of 651 formulations generated annual savings of more than Rs. 3,500 crore in MAT

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According to the drug price regulator, the moving annual turnover (MAT) for consumers on formulations for which the new prices have been finalised until the end of March 2023 is estimated to have decreased by over Rs. 3,500 crore annually as a result of the ceiling price revision and fixation of prices for the new drugs added to the revised Schedule I of the Drugs (Prices Control) Order, 2013. The National List of Essential Medicine (NLEM), 2022, and the DPCO, 2013, through an amendment late last year, have both been added to the schedule of formulations for which the National Pharmaceutical Pricing Authority (NPPA) has been conducting the exercise of revising or fixing the ceiling prices. The ceiling price for 651 formulations has been set until the end of March 31, 2023.

The ceiling price for prescribed medications under NLEM, 2022, has now decreased by an average of 6.73 percent, according to the Department of Pharmaceuticals (DoP). Up until March 31, 2023, 651 formulas fixed under NLEM 2022 will save an estimated Rs. 3,532.24 crore annually in moving annual turnover (MAT). There have been reports that the implementation of a price increase based on the Wholesale Price Index (WPI), to the tune of 12.12%, has resulted in a price increase on essential medicines starting in April 2023, even as the NPPA has been trying to lower the ceiling price of the scheduled formulations through the most recent initiative.

In response, the Authority made it clear that even after the prices were permitted to rise in line with the Wholesale Price Index increase, the price reduction caused by the inclusion of NLEM 2022 into the DPCO, 2013, has resulted in a price cut of about 6.73 percent on roughly 651 formulations. The prices of planned formulations were permitted to increase by 12.12% beginning on April 1, 2023, in accordance with the WPI increase. However, prices for 870 formulations are being adjusted or fixed based on NLEM, 2022, according to the updated Schedule I of the DPCO, 2023. Prices for 651 scheduled formulations have currently been decreased by about 16.62%. The price of these 651 critical drugs is still lower for the customer even after accounting for the 12.12% price rise based on the WPI, it was added.

For instance, on April 1, 2022, the ceiling price for a 500 mg paracetamol tablet was Rs 1.01 per unit under the NLEM, 2015. As of April 1, 2023, the ceiling price was Rs. 0.89 per tablet under the NLEM, 2022, which represents a net decrease from the NLEM, 2015, after the WPI increase of 11.88%. Similarly, diabetes drug metformin 500 mg tablet, costed Rs. 2.13 per tablet as on April 1, 2022, has come down to Rs. 2.01 per tablet as on April 1, 2023, which is a net reduction of 5.63 per cent; ceiling price of glimepiride tablet 2 mg as on April 1, 2022 was at Rs. 6.34 per tablet and it has come down to Rs. 5.79 per tablet a year later, with a 8.68 per cent net reduction from NLEM, 2015 after WPI increase of 12.12 per cent.

According to sources, the medicine producers frequently maintain their maximum retail prices below the ceiling price because of market pressures and the existence of Jan Aushadhi stores in the nation, the Authority stated. According to DoP, the authority has set the retail price of 25 new medications for the month of March 2023, increasing the total number of medications subject to retail price control to 2,299 for the month.

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