Pharmabiz
 

NPPA NEED TO ACT

P. A. FrancisWednesday, June 25, 2008, 08:00 Hrs  [IST]

Pharmaceutical industry in India is in a state of confusion. There is a general feeling of helplessness amongst the companies. No one is talking loud. The industry is yet to recover from the shock of the Ranbaxy's disappearance from the scene. The company has been the leader and the hope of India's pharmaceutical story. The second leading company, Dr. Reddy's Labs is also not in a good state again because of the same issues faced by Ranbaxy prior to its sell out. Ranbaxy shock came when the Indian pharmaceutical industry is facing a problem of lower foreign exchange earnings caused by a steady drop in margins from generic exports and a steady appreciation of Indian rupee. While, these adversities are continuing, international crude prices started moving up gradually and steadily. During the first quarter of the current fiscal, the impact of these factors started hitting the industry with a 50 per cent hike in prices of all basic raw materials. Shut down of a number of chemical companies producing APIs and chemicals in China have made the situation more complex with a sharp decline in API availability. India has been dependant on China and other countries for a number of APIs, drug intermediates and chemicals for some years now. Even if there is some stability in the oil prices now, all chemicals, intermediates and excipients used by the pharmaceutical industry are going to be expensive pushing up the cost of most pharmaceutical products. Pharmaceutical industry has already represented to NPPA for relaxing the 10 per cent ceiling on annual automatic price hikes of all decontrolled formulations. It has not responded to this plea. The industry also sought a revision in the prices of 33 widely used bulk drugs. As a price monitor, NPPA has to ensure that the public is not burdened with unreasonable prices of essential medicines by granting price revisions without proper scrutiny. The usual practice amongst pharmaceutical companies is to inflate their costs when they apply for a price revision. That may happen this time also. But, that should not be an excuse for NPPA to deny or delay whatever just price hikes the industry has to get. It is a fact that prices of most of the APIs have already gone up both in the domestic and international markets. It will not be difficult for NPPA to ascertain the prices of major inputs going into the API production and arrive at revised prices. The urgency for price revision of drug prices is to be dealt with in the context of a possible shortage of essential medicines in the country. A large number of anti infectives are produced by medium and small scale drug companies and they may not be able to continue production with escalating input costs and without a corresponding hike in selling prices.

 
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