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Price of Essential Medicines Will Go Up 10% From April. What Will Be Affected?

Price of Essential Medicines Will Go Up 10% From April. What Will Be Affected?

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Representative image. Photo: Karolina Grabowska/Pexels

  • The government announced last week that the prices of essential medicines would be increased from April to adjust for inflation.
  • These drugs exist on the National Essential Medicines List, compiled by a committee of experts, and whose prices are controlled by the government.
  • Drugs, including those on this list, have been among the biggest contributors to the high out-of-pocket healthcare expenses in India.

New Delhi: The Union government announced last week that it will hike the prices of around 800 ‘essential medicines’ by 10% from April.

The National Pharmaceutical Authority of India (NPPA), the body responsible for fixing the prices of these medicines, said the wholesale price index in 2021 had worked out to be 10.77% more than that in 2020.

Some 377 medicines fall under the ‘National List of Essential Medicines’ (NLEM). They encompass 871 drug formulations (i.e. the same drug administered in different forms, like oral, injectable, topical, etc.).

These medicines are divided into 30 categories:

The Union health ministry has a committee of experts that deliberates on which medicines should be included in the list. This committee last revised the list in 2015. The 2011 list that existed until then had 530 drug formulations.

Since the 1970s, the NPPA has been fixing the ceiling price of essential medicines, using the Drug Price Control Order, under the Essential Commodities Act 1955. 

According to the WHO, essential medicines “satisfy the priority health care needs of a population”. The body also issues a list of such medicines that various countries can use as the basis for their own lists.

According to an Indian government committee report, a drug’s essentiality is determined by five factors. The first is essentiality itself: every medicine may be necessary for the condition for which it has been indicated – but only one that is used by a large number of people for that condition can be deemed essential.

The second criterion is the changing burden of a disease. According to the report, if a drug is required to manage an emerging disease at a population level, then it must be included in the NLEM. Examples of this are remdesivir[footnote]Currently not in the list[/footnote], which the government approved to treat those with moderate to severe COVID-19 (with a doctor’s prescription), and amphotericin B, for those with mucormycosis.

Notably, a parliamentary panel recently recommended that the prices of such drugs should be fixed to ensure they remain accessible and to prevent black-marketing.

The third criterion is efficacy + safety. The drug should have a strong efficacy profile among a wide range of consumers and be completely safe. The report also said that if a drug is cheap and is widely used but if subsequent analysis suggests that it causes serious adverse events, it must be dropped from the list.

Fourth is cost-effectiveness. If two drugs meet the first three conditions but one is more cost-effective, this one should be in the NLEM instead of the other. But this is just an illustration; the efficacy-and-safety criterion assumes precedence.

Fifth, a drug that is part of a fixed dose combination is included in the list only in exceptional circumstances. These are combinations of two or more drugs administered as a single dose. To quote from the report:

“FDCs are included only if the combination is rational and has a proven advantage with respect to therapeutic effect, safety and compliance or in decreasing the emergence of drug resistance.”

In addition to these conditions, different essential medicines may be used for treatment at primary, secondary and tertiary levels. The essential list for primary health centre will include basic antibiotics and analgesic and anti-inflammatory drugs. A tertiary care facility, like a district hospital, will on the other hand also require drugs to treat advanced conditions as well as those for in- and out-patient care.

Almost all Indian states have their own lists of essential medicines. They are modelled on the NLEM but have been tweaked for their respective populations.

Drugs make up one of the biggest contributors to out-of-pocket healthcare expenses in India. According to a 2018 National Sample Survey report, expenditure on medicines made up the largest share of expenses for in-patient care at both public and private hospitals.

So any revision in the NLEM – in terms of adding new medicines or increasing prices – has wide-ranging implications for the country’s population.

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