Starting April 1, prices of essential medicines, including painkillers, antibiotics, anti-diabetic drugs, and cancer treatments, will rise marginally. The government has approved a 1.74% increase in the prices of medicines listed under the National List of Essential Medicines (NLEM), in line with the annual change in the Wholesale Price Index (WPI).
According to the National Pharmaceutical Pricing Authority (NPPA), the WPI change for 2024 stands at 1.74028% compared to 2023. As per Paragraph 16(2) of the Drugs Price Control Order (DPCO), 2013, manufacturers are permitted to raise the Maximum Retail Price (MRP) of scheduled drugs based on this WPI change without prior government approval.
The revised prices will impact nearly 1,000 essential medicines, including common drugs like paracetamol, azithromycin (antibiotic), anti-anaemia medicines, vitamins, minerals, and certain steroids.
This is the second consecutive year of a marginal price hike. Last year, the WPI-linked increase was just 0.00551%. In contrast, the industry had witnessed sharp price hikes of 10% in 2022 and 12% in 2023 due to higher inflation.
Pharma Industry Concerned Over Modest Hike
Pharma executives have expressed disappointment over the small increase, citing rising production costs. “It’s a marginal hike again, while input costs have surged significantly over the past few years,” said a senior pharma expert.
In previous years, the pharmaceutical industry witnessed two significant price hikes—12% in 2023 and 10% in 2022—to help offset inflationary pressures. Despite this, the industry has continued to push for a more substantial increase, citing the steep rise in input costs.
According to industry experts, over the last few years, the prices of key Active Pharmaceutical Ingredients (APIs) have surged by 15% to 130%. The cost of paracetamol, a commonly used API, has skyrocketed by 130%, while the prices of excipients—substances used alongside the active ingredients—have jumped by 18% to 262%.
Additionally, the prices of essential solvents like glycerine and propylene glycol, used in liquid medicines such as syrups, oral drops, and sterile formulations, have increased by 263% and 83%, respectively. The cost of Penicillin G, a key antibiotic ingredient, has spiked by 175%, while the prices of intermediate ingredients used in drug manufacturing have risen between 11% and 175%.
“Given these sharp increases in raw material costs, we were expecting a more significant price hike,” a pharma executive said. Earlier, a leading industry lobby representing over 1,000 Indian pharmaceutical companies had urged the government to approve a 10% hike in prices of all scheduled medicines to ease the financial burden on manufacturers.
