Drug Prices May Rise As Govt Plans Stricter Import Rules, Industry Voices Concern Over Proposed MIP Policy
India may impose a Minimum Import Price on key drug ingredients to curb dependence on China, but the pharmaceutical industry fears this could raise production costs and lead to higher medicine prices. MSMEs may face significant disruption, and prices of government-procured medicines—especially amoxicillin-based—could rise by as much as 40 percent.
Industry Warns of Price Hike Amid Proposed Import Curbs. | File Photo
Mumbai: The pharmaceutical industry has recently expressed concern over a possible government policy that may introduce a Minimum Import Price (MIP) on certain essential drug ingredients. According to The Economic Times, industry players believe that imposing MIP on Active Pharmaceutical Ingredients (APIs) and finished drugs will increase production costs, ultimately pushing up medicine prices.
Why the Government May Impose MIP
As per the report, the proposed move aims to reduce India’s rising dependence on imported pharmaceutical raw materials—particularly from China. The government believes this dependence weakens the competitive capabilities of domestic firms. The report states that the Centre is considering MIP on key antibiotic raw materials such as Penicillin-G, 6APA, and amoxicillin.
Major Impact Likely on MSME Sector
The report highlights that thousands of MSME units in the pharmaceutical sector could be severely affected if MIP is imposed on these essential ingredients. Over 10,000 MSMEs may face closure, and more than 2 lakh jobs could be at risk. The government has earlier fixed an MIP of USD 111 per kg on ATS-8 until September 2026. Additionally, in October, an MIP of Rs 1,174 per kg was imposed on Sulphadiazine, applicable until September next year.
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Self-Reliance Boost or New Challenge?
Experts cited by The Economic Times said the move appears aligned with the government’s Atmanirbhar Bharat (self-reliant India) mission. India continues to rely heavily on China for key pharmaceutical raw materials. In 2020, the government launched the PLI scheme to support domestic manufacturing of APIs. However, industry representatives argue that the PLI scheme was not intended to influence the prices of ingredients like 6APA or amoxicillin. Imposing MIP, they say, could send a signal that PLI-supported industries seek additional protection.
According to the report, if amoxicillin is also brought under MIP, the cost of medicines procured for government hospitals and public distribution channels could rise by up to 40 percent.
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