Govt Considering Proposal To Hike Essential Drug Prices By Up To 20% Due To War-Induced Rise In Input Costs

The government is considering a 10-20 percent increase in prices of essential medicines such as cancer drugs as pharmaceutical companies face a steep rise in input costs due to the West Asian war.

The rise in prices would be temporary and will remain in effect only until the input costs remain elevated, according to a report by Moneycontrol. The prices will be hiked for at least three months.

“The government is inclined to help the industry overcome the current crisis, but any increase will be limited to the duration of the disruption,” said the report, citing a source.

The proposed price hike, if implemented, will impact antibiotics, injectables, and cancer drugs.

While some industry stakeholders are looking at a price hike of as high as 50 percent, it is unlikely that the government would agree to such a steep increase, keeping in mind the critical nature of the drugs.

“Different stakeholders have suggested different ranges, but the idea is to provide calibrated support of 10–20 percent rather than a sharp increase,” the report cited the source as saying.

The input costs for pharma companies have increased as the industry is facing a shortage of solvents from the Gulf region.

Most of the solvents are petrochemical derivatives linked to crude oil and gas supply chains. They are essentially industrial chemicals used to dissolve, process, and purify drug ingredients during manufacturing.

While solvents are not always present in the final medicine, they are used across most pharmaceutical manufacturing processes, making their availability critical for a wide range of drugs.

“There is supply disruption from the Gulf, but if it continues for two to three months, it can start affecting production across medicines,” the source said.

Pharma companies also face safety risks in maintaining large inventories of solvents, which limits their supply for a long period in case of disruption.