Duty cut, yet drug prices may go up over rising input costs

Nagpur: The govt's move to exempt a whole gamut of petrochemical-based solvents used to make medicines from customs duty from April 1 to June 30, in the light of West Asia war, may bring only a small relief, say pharmaceutical industry players as costs of materials is rising faster.Sources say due to the rising material costs, even the MRPs are likely to be increased this month. So far, the rising material cost has not been passed on to consumers for a majority of drugs. This is because MRPs for an entire range of medicines is determined through drug price control order (DPCO), which's revised in April."The industry expects an increase in MRP on account of rising raw material prices when the DPCO is out. There is a mechanism for review, which also considers the input costs. Given the rising trends, there are chances that the prices may go up now," said Ravleen Singh Khurana of Nitika Pharma and also the president of All India Excipient Council.Excipients are inactive substances in a drug, but have key role in maintaining stability. Smaller pharma players in cities like Nagpur say they would benefit only if their material suppliers pass on the duty cut to them. As the US-Iran war has left crude prices blazing, pharmaceutical solvents made out of petrochemicals have become dearer. Industry players say there was another round of price hike in one week. This has affected the costs of materials for making simple drugs like paracetamol to oral rehydration salts (ORS) administered to treat dehydration, said sources.More than easing the costs, the move is expected to ease movement of the materials, which are in short supply due to the war, say industry players. As the customs duty was levied earlier, the consignments used to be stuck for weeks till the formalities were completed. Now with no duty levied, it will at least help in getting the consignments out faster as no clearance will be needed, said sources.Subodh Deulgaonkar of M/s Snehal Pharma at Nagpur says prices of raw materials of a range of drugs have further increased in a week. The raw materials for making paracetamol, the fever medicine, had already touched over Rs430 a kg from the normal level of Rs250. It is now Rs700 per kg. The rates of material to manufacture doxycycline, a common antibiotic, have touched Rs6,200 a kg from the earlier levels of Rs4,300 to Rs4,800 a kg. There have been times when the rates were close to Rs3,000 too. Even the material of making ORS, which has nothing to do with petrochemicals, has gone up to Rs22 a kg from Rs18 a kg.