With Rs 3,788 Crore in Savings, Govt Eyes Adding More Drugs Under NLEM

The committee has recommended urgent action to curb exorbitant drug prices and include more essential medicines under price control to ensure affordability for the public.

Price Regulation and the Impact on Essential Medicines

The report highlights concerns over the unchecked rise in prices of medicines outside the NLEM framework, stating:

"The Committee expresses serious concern over the unchecked rise in prices of medicines that do not fall under the purview of the National List of Essential Medicines (NLEM). While price regulation under the NLEM ensures affordability for essential medicines, a significant number of life-saving and widely prescribed drugs remain outside this regulatory framework, leading to exorbitant pricing. This creates an undue financial burden on the common people, making critical healthcare unaffordable, particularly for lower-income households."

In response to the committee’s inquiry regarding pricing criteria, the Department of Pharmaceuticals clarified that drug prices in India are regulated under the National Pharmaceutical Pricing Policy (NPPP), 2012 and Drugs (Prices Control) Order (DPCO), 2013. It further explained:

"Prices of scheduled medicines notified as Schedule-I of the DPCO, 2013 by the Department of Pharmaceuticals. The National List of Essential Medicines (NLEM) published by the Ministry of Health and Family Welfare is incorporated as the Schedule-I of the DPCO. Presently, NLEM, 2022 is notified as Schedule-I of DPCO,2013 vide notification dated 11.11.2022."

The report also details the impact of price fixation and refixation under NLEM 2022, stating:

"Fixation and refixation of prices under NLEM, 2022 has led to an average reduction of about 16.89% in prices, resulting in estimated annual savings of about Rs 3,788 crore to patients."

Recommendation to Expand NLEM & Cover More Drugs

The parliamentary committee has strongly recommended that the Department of Pharmaceuticals, NPPA, and CDSCO work together to expand the NLEM to include more essential and widely used medicines, particularly those required for chronic diseases, rare disorders, and critical care. The report emphasizes:

"The Committee strongly recommends that the Department of Pharmaceuticals, in coordination with the Central Drugs Standard Control Organization (CDSCO) and the National Pharmaceutical Pricing Authority (NPPA), take immediate steps to expand the scope of the NLEM to include more essential and widely used medicines, particularly those required for chronic diseases, rare disorders, and critical care. The failure to regulate these medicines allows pharmaceutical companies to impose arbitrary pricing, making essential treatments unaffordable for vast sections of the population."

Additionally, the committee called for a regular review of the NLEM, stating:

"The Committee further urges the Department to undertake a comprehensive review of the NLEM at regular intervals and ensure that the list reflects the evolving healthcare needs of the country. The arbitrary exclusion of essential medicines from price control must be addressed immediately. Any delay in expanding the NLEM would result in continued financial hardship for patients and compromise access to life-saving treatments."

928 Scheduled Formulations Under Price Control

The report also provides insights into the existing scope of price regulation, revealing that as of March 6, 2025, ceiling prices have been set for 928 scheduled formulations across multiple therapeutic categories, including 131 anti-cancer drugs, 11 anti-diabetic medications, 65 cardiovascular drugs, 1 haemodialysis solution, 10 diuretics formulations

It states;

"As on 6.3.2025, ceiling prices of 928 scheduled formulations across various therapeutic categories were in effect. These include 131 anti-cancer, 11 anti-diabetic, 65 cardiovascular, 1 haemodialysis solution and 10 diuretics scheduled formulations."

Stricter Compliance & Industry Challenges

The report further elaborates on pricing obligations for pharma companies, highlighting the role of the National Pharmaceutical Pricing Authority (NPPA):

"NPPA fixes the ceiling prices of scheduled medicines, that is, the medicines specified in the said Schedule. The prices fixed by NPPA are applicable to all manufacturers/marketers selling the specified formulations, whether generic or branded. Manufacturers/marketers of scheduled medicines (branded or generic) are required to sell the same within the ceiling price fixed by the NPPA and applicable GST and annual revision on the basis of WPI."

For non-scheduled formulations, it adds:

"For non-scheduled formulations (branded or generic), the manufacturers may not increase the maximum retail price of such formulations by more than 10% per annum."

This means pharma companies must carefully navigate compliance requirements while maintaining sustainable business models in a highly regulated market.