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Informist, Friday, Jun. 12, 2026

 

By Shakshi Jain

 

NEW DELHI – Pharma major Lupin Ltd. has held internal discussions regarding supply chain constraints and the resulting cost pressures arising from the war in West Asia, a senior company executive told Informist on condition of anonymity. The company is yet to make any submission to the government seeking a price increase for any drug, the official said. "There were some requests which we made earlier, but because of this crisis, no submissions," the executive said.

 

The Indian pharmaceutical industry is experiencing one of its most severe supply chain disruptions in recent years due to the war in West Asia, which has triggered a sharp rise in the costs of active pharmaceutical ingredients, key starting materials, excipients, solvents, packaging, and logistics.

 

Prices of commonly used inputs such as glycerin, paracetamol, butyl ethanol, and isopropyl alcohol have risen sharply due to the war. Analysts estimate a 100-150 basis-point impact on pharmaceutical companies' profit margins in the current quarter due to higher raw material and logistics costs.

 

Lupin is part of an industry-level representation, which is being prepared, the company official said.

 

Based on input from member companies, the Federation of Indian Chambers of Commerce and Industry is drafting a representation to the government, which is likely to be finalised next week, an official from the industry body told Informist. The proposal will highlight the shortage of active pharmaceutical ingredients and seek an upward revision of drug ceiling prices, the official said.

 

An official from the Confederation of Indian Industry also confirmed that the industry body will submit a revised proposal to the government next week.

 

The industry-level representation comes amid comments by Pharmaceuticals Secretary Manoj Joshi last week, ruling out any blanket increase in medicine prices despite cost pressures arising from the war in West Asia. In an interview with a newspaper, Joshi said the government is working on a new support scheme for the bulk drugs industry, which would go beyond the Production-Linked Incentive approach to focus on long-term capacity creation, research and development, and stronger industry-academia collaborations.

 

In India, drug prices are regulated by the Drugs (Prices Control) Order (DPCO), 2013. The government fixes ceiling prices for essential medicines. Manufacturers can increase the maximum retail price annually based on the increase in the previous year's wholesale price index. Companies can apply the increase in wholesale price without obtaining explicit prior government approval, provided they do not exceed the computed cap. However, even with the adjustment, the selling price cannot exceed the legally defined ceiling price set for that specific formulation. 

 

For drugs not included in the National List of Essential Medicines, manufacturers are free to set their own initial prices, but price hikes are strictly monitored. Companies are not permitted to increase the maximum retail price by more than 10% in a preceding 12-month period.

 

However, paragraph 19 of the Drug Prices Control Order grants the government and the National Pharmaceutical Pricing Authority extraordinary powers to fix or revise the ceiling or retail price of any drug in "public interest" under exceptional circumstances. For instance, earlier this week, the government approved a 50% hike in the ceiling prices of critical cancer medicines - Carboplatin and Cisplatin injections - citing escalating raw material and supply costs.

 

"It (government approval for price revisions) is a time-consuming process," the official from Lupin said. The companies are required to make a case before the National Pharmaceutical Pricing Authority, which then scrutinises the request comprehensively. "There will be a committee. The committee will assess. They will also see how much is the competition and whether the price hike is going to help public health, and if they feel, then it will happen. Otherwise, it will not happen."

 

At the company level, Lupin is tackling supply chain challenges by negotiating with vendors and seeking on-time delivery of consignments, the company official said.

 

Many pharmaceutical companies highlighted the rise in raw material prices and logistics costs during the March-quarter earnings conference calls with investors. For instance, Zydus Lifesciences Ltd. said it is leveraging currency depreciation to offset rising input costs, while Divi's Laboratories Ltd. said it is implementing tighter coordination among procurement, production, and planning teams to ensure continuity in manufacturing schedules. "We remain cautious in our outlook. Freight-related cross-pressures are expected to continue in the near term, and we have incorporated these factors into our planning for the coming quarters," Divi's Laboratories management had said.  End

 

(With inputs from Eshitva Prakash)

 

Edited by Saji George Titus

 

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