How NLEM 2022 will Impact Pharma Companies?
On 14th September, the Ministry of Health and Family Welfare released an updated National List of Essential Medicines (NLEM) which consists of 384 drugs across various therapies. These medicines were selected after 140 meetings and 350 consultations with industry experts.
The main objective of NLEM is to promote the rational use of medicines on basis of cost, safety, and efficacy.
What are the criteria for the inclusion of drugs in NLEM?
The criteria are as follows:
- The medicine should be useful for the health problems that are common in India.
- The medicine should be licensed or approved by DCGI.
- It should have a proven efficacy and safety profile based on scientific evidence.
- It should be cost-effective and aligned with treatment guidelines.
- It should be recommended under the National Health Programmes of India.
- If more than 1 medicine is available from the same therapeutic class, one best-suited medicine of that class will be included.
- The price of total treatment will be considered and not the unit price of the medicine.
- Fixed dose combinations are not included.
- In the case of vaccinations, it is as and when included in the Universal Immunization Programme.
What are the Criteria for exclusion of drugs in NLEM?
- Medicine has been banned in the country.
- If there are concerns regarding the safety profile of the medicine.
- If medicine with better efficacy at better cost-effectiveness is available in the market.
- The disease for which medicine is included is no longer a nation’s health concern.
- In the case of antimicrobial, if resistance pattern is rendered antimicrobial drug ineffective.
How NLEM 2022 will Impact some of the Pharma companies?
A few products that are included in NLEM are Amikacin, Cefuroxime, Insulin Glargine, Itraconazole, Mupirocin, and Teneligliptin, each of them having annual sales of about Rs. 3 billion. GSK and Sanofi can get severely affected as GSK will have to reduce the price for Ceftum and T-Bact which have a cumulative of about 15% of GSK’s sales and Sanofi will have to reduce its price for Lantus which covers about 22% of Sanofi’s sales.
Ranitidine is one of the medicine which got excluded from the list, which has annual sales of more than Rs. 6 billion with Cadila and JB Chemicals as major market shareholders. After getting excluded from the list these products can have a price hike of at the most about 10% on the selling price every year. Therefore, JB Chemicals can get positively impacted.
About the Author
DisclaimerInvestment/Trading is subject to market risk, past performance doesn’t guarantee future performance. The risk of trading/investment loss in securities markets can be substantial. Also, the above report is compiled from data available on public platforms.
Start Investing Now!
Open Free Demat Account in 5 mins