Prices of 'all essential medicines' to go up by 2% from April 1

The government will allow pharmaceutical companies to hike the prices of all the essential medicines from April 1 to bring the rates in line with the wholesale price index (WPI). 

The National Pharmaceutical Pricing Authority (NPPA) has asked all the pharmaceutical companies to submit the required documents to ensure they get the annual price hike based on wholesale price index (WPI).

In a notification, the NPPA said, "As confirmed by the Economic Adviser (Ministry of Commerce and Industry), the annual change in the Wholesale Price Index (WPI) works out as 1.97186% during the calender year 2016 over the corresponding period in 2015."

While the government has the power to directly regulate the prices of essential medicines that are a part of the National List of essential medicines, there is an upper cap in place. This cap is equal to the simple average of all the drugs in a particular segment with market share of atleast 1%, according to a report by The Times of India. 

Currently, the National List of Essential Medicines has over 875 drugs which includes those used for the treatment of cancer, kidney functions, hypertension, hepatitis, and so on. 

While the price hike would hurt customers, it may come as a relief to pharmaceutical companies that have seen their revenue diminish with the government cutting the price of cancer drugs and heart stents.