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NPPA announces annual change of 12.12% in WPI for 2022

Our Bureau, New Delhi
Wednesday, March 29, 2023, 08:00 Hrs  [IST]

The pharma industry may be allowed by the drug price regulator to increase the prices of scheduled drugs more than what was allowed in the beginning of the fiscal year 2022-23, in the new fiscal year as the Wholesale Price Index (WPI) annual change has been worked out as over 12 per cent during the calendar year 2022 over the previous year.

The National Pharmaceutical Pricing Authority (NPPA) has announced that based on the WPI data provided by the Office of the Economic Advisor, Department of Industry and Internal Trade, Ministry of Commerce and Industry, the annual change in the WPI works out as 12.1218 per cent during the calendar year 2022 compared to previous year.

“This is brought to the notice of all concerned for further action as per the provisions of DPCO, 2013,” said an office memorandum issued by the NPPA.

The number of formulations covered in revised Schedule I include 954 formulations in 388 medicines, and the WPI annual change is expected to have its effect on the prices of these formulations in the fiscal year 2023-24. The measure, while increasing the price of these drugs, may help the industry to mitigate the increased raw material costs and others to an extent, it is expected.

An Authority meeting held on March 27, said that it has deliberated upon the matter of WPI and as per provisions of DPCO, 2013 approved the WPI to be applicable on scheduled formulations with effect from April 1, 2023. It has also decided to issue notifications for revised ceiling price of scheduled formulations based on the new WPI to be effective from April 1, 2023.

It may be noted that the NPPA is currently in the process of revising the ceiling price of scheduled formulations based on the revised Schedule I of DPCO, 2013, which was amended last year to include drugs under the National List of Essential Medicines (NLEM), 2022.

The WPI annual change for the new fiscal year is the highest increase, after the 10.7 percent change announced in the calendar year 2021 over 2020, which was allowed with effect from April 1, 2022, by the NPPA.

The WPI increase for pharmaceuticals for the year 2020 was 1.88 per cent, in 2019 at 4.26 per cent and 2018 at 3.43 per cent. While there has been no general decrease in prices during the last five years on account of change in WPI, there was a decrease in prices during the year 2016 as compared to prices in the year 2015. WPI during the year 2016 was a negative 2.71 per cent.

The ceiling price of a scheduled formulation is fixed based on the average retail price of the said formulation having market share of one or more than one percent. As the ceiling price is based on the average retail price of medicines already available, there is a reduction in prices while fixing the retail price of scheduled medicine of an existing manufacturer. Further, the ceiling prices of scheduled medicines are revised on the 1st day of April every year on the basis of Wholesale Price Index for preceding calendar year on or before 1st April of every year.

In case of scheduled medicines, thus, the annual hike cannot be more than WPI. In case of non-scheduled formulations, NPPA ensures that their Maximum Retail Price (MRP) do not increase by more than 10% of their MRP during the preceding twelve months.


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