The National Pharmaceutical Pricing Authority (NPPA) has literally turned down the pharma industry's demand for a suo moto increase in prices of medicines. The industry's demand for the upward revision in the drug prices was based mainly on two reasons: the steady depreciation of rupee against US dollar and the rising raw material costs.

According to NPPA sources, the national pharma pricing regulator has informed the industry in no uncertain terms that the authority cannot take any suo motu decision to increase the prices of medicines. However, the authority has said that while it cannot give a general relief to the drug industry, but it can consider individual price revision applications from the pharma companies.

Earlier, the industry had demanded to the NPPA for a blanket hike in the retail prices of hundreds of medicines which the authority had cut recently. The NPPA cut the prices of hundreds of these medicines on the basis of the appreciation of rupee against dollar and the availability of cheaper raw materials.

But the industry argues that the reasons that warranted a price cut by the NPPA, the steady appreciation of rupee against US dollar and the availability of cheaper raw materials, were no longer applicable as the rupee is falling and the cost of the imported raw materials is shooting up. In the wake of these facts, the NPPA should reverse the prices reduction, industry sources said.

The drug industry started feeling the pricing pinch after the NPPA began close scrutiny of the price movements of both imported and domestically produced drug raw materials. Since raw materials contribute over 70 per cent of the total production cost of the medicines, the pricing authority made sure that the effect of any reduction in raw material prices should immediately be passed on to the consumers.

Meanwhile, since the NPPA has turned down any unilateral price reduction, individual companies have started the process of making documental proof to support their demand for upward revision of the retail prices.