Pressure Point: Small Pharma Firms Challenge NPPA Price Caps At NITI Aayog Meet

Image Source : Business Standard

In a high-stakes policy dialogue convened by NITI Aayog, small and mid-sized pharmaceutical manufacturers voiced strong opposition to the National Pharmaceutical Pricing Authority’s (NPPA) recent price control measures. The meeting, held in early July 2025, spotlighted growing tensions between affordability mandates and the financial viability of domestic drugmakers.

Key Takeaways From The Discussion

- Small pharma firms argued that NPPA’s ceiling prices on essential drugs are unsustainable, especially for low-cost formulations
- Manufacturers cited rising costs of active pharmaceutical ingredients (APIs), packaging, and logistics as key pressure points
- Several companies warned of potential discontinuation of critical formulations due to unviable margins
- Industry representatives requested financial assistance, tax relief, and production-linked incentives to offset regulatory burdens
- NITI Aayog acknowledged the concerns and committed to reviewing the pricing framework in consultation with the Department of Pharmaceuticals

Backdrop To The Price Control Debate

The NPPA recently invoked extraordinary powers under Para 19 of the Drugs (Prices Control) Order, 2013 to revise ceiling prices of eight scheduled drugs by up to 50 percent. While aimed at ensuring availability, the move has triggered backlash from smaller players who claim the revisions are insufficient to cover escalating input costs.

- Drugs affected include treatments for asthma, tuberculosis, mental health disorders, and thalassemia
- NPPA has received multiple applications for upward price revisions and discontinuation notices from manufacturers
- The authority maintains that affordability must not compromise access, but firms argue that current caps threaten supply continuity

Industry’s Call For Support

Small drugmakers urged NITI Aayog to consider a multi-pronged support package:

- Subsidies or soft loans for manufacturers producing essential medicines
- Relaxation of compliance timelines for revised pricing norms
- Inclusion of small firms in policy consultations and pricing committees
- Streamlined approval processes for new formulations and generics

Regulatory Outlook And Next Steps

The Standing Committee on Affordable Medicines and Health Products (SCAMHP), housed within NITI Aayog, is expected to take up the matter for detailed review. The committee may recommend adjustments to NPPA’s pricing strategy or propose alternative mechanisms to balance affordability with sustainability.

- Stakeholders anticipate a follow-up round of consultations in August 2025
- NPPA may consider phased implementation of price caps or differentiated pricing for small manufacturers
- The Department of Pharmaceuticals is exploring a revised framework for essential drug pricing under the upcoming National Pharmaceutical Policy

Sources: The Wire, India Pharma Outlook, Ministry of Health and Family Welfare, Economic Times, Drishti IAS, Shankar IAS Parliament, NPPA Press Releases