Explanation:

Consumers may have to pay more for medicines and medical devices if the National Pharmaceutical Pricing Authority (NPPA) allows a price hike of over 10% in the drugs and devices listed under the National List of Essential Medicines (NLEM).

• The escalation which is expected to have an impact on nearly 800 drugs and devices is propelled by the rise in the Wholesale Price Index (WPI).
• Lobby groups that represent domestic pharmaceutical companies have been engaging with the Central Government to ask it to extend the 10% annual hike to scheduled formulations under price control.

How does the pricing mechanism work?

• All medicines under the NLEM are under price regulation.
• As per the Drugs (Prices) Control Order 2013, scheduled drugs, about 15% of the pharma market, are allowed an increase by the government as per the WPI while the rest 85% are allowed an automatic increase of 10% every year.
• The pharma lobby is now asking for at least a 10% increase for scheduled drugs too than going by the WPI.
• The NPPA was set up in 1997 to fix/revise prices of controlled bulk drugs and formulations and to enforce price and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995-2013.

Hence both statements are correct.