Pharmaceutical companies have sought the government's permission to increase medicine prices due to rising cost of bulk drugs, thanks to a 20 per cent devaluation of rupee against the US dollar this year and increase in raw material prices due to inflation. Most of the raw materials and bulk drugs are imported from China.
For example, prices of Albendazole, used in making of a variety of worm infestation medicines, have increased 57 per cent since the end of April. It now costs Rs 1,650 per 25 kg.
"Prices of bulk drugs have increased by 25 to 30 per cent over the past few months in the wake of the depreciation of the rupee hitting business margins of the pharma industry," said Daara Patel, secretary general of Indian Drug Manufactures Association (IDMA). "Unless the government revises the prices fast, there won't be any immediate recourse for companies," Patel said.
Worldwide, prices of raw materials have increased due to inflation. Bulk drug prices were expected to reduce but higher demand compared to supplies and their added expenditure towards meeting strict environmental norms has hampered any such reduction.
"Most of the bulk drugs and APIs come from China and with the rising dollar, it will affect companies at present and in the quarter to come. Once the companies who have stocks, exhaust their supplies, they will have to face this pressure," said Patel.
Prices of bulk drugs in segments like vitamins, cardiovascular and lifestyle related disorders are to increase said IDMA..