As per the recent assessment, buyers can expect to pay considerably more for paracetamol over the next few months as drug firms struggle with spiraling raw materials and supply shortages. Paracetamol, widely used worldwide, has seen a price rise over the last few months already, with analysts expecting further price rises.

The National Pharmaceutical Pricing Authority (NPPA) lays the sharp increase in paracetamol prices to a combination of factors that are coming together. Para-aminophenol (PAP), the main constituent of paracetamol manufacturing, suffers from critical supply shortages across the world. China, the major supplier of these drug ingredients, has tightened export controls, resulting in a massive shortage for Indian manufacturers.

Record levels have been achieved by paracetamol manufacturing costs. The cost of acetic anhydride, another key ingredient in production, has increased with rising chemical input costs and supply chain issues.

The government's Production Linked Incentive (PLI) scheme, which was initiated in 2020 with ?6,940 crore funding, seeks to decrease India's reliance on imported pharmaceutical intermediates. Nevertheless, local production has not yet scaled up enough to counter import issues plaguing paracetamol supply.

Market analysts identify aggressive pricing strategies by Chinese manufacturers who briefly cut paracetamol prices sharply, leading to market volatility. This predatory pricing has put pressure on Indian and European pharmaceutical firms, further adding to the pricing complexity of paracetamol products.

In early 2025, there was a shocking boom in the demand for paracetamol after holiday season stock depletion. This boom in demand, when added to ongoing supply chain breakdowns, has caused the ideal storm for increases in the price.

Shipping delays and port congestion have worsened the situation, pushing up the costs for pharmaceutical producers who are now forced to pay high prices to obtain paracetamol raw materials. Chemical industries in both India and China have further seen production costs go up due to environmental regulations.

The effects of increasing paracetamol costs trickle down from manufacturers to health providers and patients. Paracetamol prices consume increasing chunks of drug budget in hospitals, leading to reported budget tensions. Small medical outlets are finding it difficult to hold sufficient stock of paracetamol as wholesale prices increase.

Economic experts predict that paracetamol price hikes will burden poorer consumers disproportionately, who take these low-cost medicines for the management of pain and fever. Multinational corporations importing APIs from India are likely to pass on these additional expenses to international markets, impacting global affordability.

India's drive to build domestic manufacturing capabilities through the PLI scheme is a long-term solution, with the tenure of production extending from 2022-2023 to 2028-2029. In the short term, though, consumers will have to batten down and expect paracetamol price hikes to persist in 2025.

Healthcare professionals advise patients to discuss possible alternatives with medical practitioners if paracetamol prices become unaffordable. In the meantime, pharmaceutical industry associations have approached the government to request temporary relief measures to stabilize prices during this unstable time.