The Indian Drug Manufacturers Association (IDMA) has demanded an ad-hoc price increase of 25 per cent in all APIs (active pharmaceutical ingredients) falling in the scheduled category and at least 20 per cent increase in all scheduled formulations to tide over the crisis arising out of the unprecedented rise in prices of raw materials imported from China. The IDMA has sent a detailed study report to the government to justify its demand.
Pending study of individual API cost escalations by the government, an ad-hoc increase of 25 per cent in all APIs falling in scheduled category is necessary to ensure continued production as the prices of APIs from China have gone up by more than 50 per cent, it said.
Urging the government to rectify its arbitrary and unjustified step taken by it earlier, the IDMA asked for the restoration of the ceiling in non-scheduled formulations from 10 per cent to at least 20 per cent per annum. It also asked for the upward revision of 40 per cent in CC, PC charges to neutralize the costs of labour and utilities till the study undertaken by NPPA is concluded. The study report will be outdated by the time decisions on such study are taken by the government, as costs have gone up very sharply during last 6 to 9 months.
The IDMA pleaded that as the prices of almost all APIs have registered increases, to wait for cost study by the NPPA for nearly hundreds of APIs is not feasible and practical and may result in shortages of drugs. When the government could, vide its notification no. S.O. 536 (E) dated 20th March 2008, reduce prices of several APIs on suo moto basis, the same calculations can be adopted for working out price increases taking into consideration various input costs as an interim relief.
Prices of all inputs such as APIs, excepients, packing materials etc have witnessed unprecedented increase in last few months. Consequently price increases of formulations have become inevitable. Moreover, costs of utilities have also increased very sharply, due to increase in prices of petrol and diesel. Consequent upon sharp increase in rate of inflation which has now touched double digits, the Cost of Living Index has increased resulting in higher salaries and wages. Besides increase in cost of all inputs, cost of travel, cost of freight, cost of accommodation have increased very sharply necessitating increase in MAPE in scheduled formulations as industry is unable to absorb all these increases, the IDMA said.