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Govt set to rationalize trade margin on non-scheduled drugs soon
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Laxmi Yadav, Mumbai
July 27 , 2022
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The government is set to rationalize trade margins on non-scheduled drugs soon. The drug industry and government agencies have come together to discuss trade margin rationalization at length to ensure access to quality healthcare at an affordable price.
Representatives of several industry associations including Laghu Udyog Bharati, Small and Medium Pharma Manufacturers Association (SMPMA), Indian Federation of Pharma Generics representing scores of small and medium drug firms have batted for adoption of "one molecule-one MRP" formula instead of trade margin rationalization (TMR) on non-scheduled drugs to decrease their prices at a meeting convened by the National Pharmaceutical Pricing Authority (NPPA) on July 26, 2022.
The meet was attended by industry representatives along with Union minister for health and chemicals and fertilizers Mansukh Mandaviya, department of pharmaceuticals (DoP) secretary S Aparna, NPPA chairman Kamlesh Pant and other NPPA officials.
The minister has listened to suggestions of industry representatives on trade margin rationalization and directed concerned officers to analyze them deeply in the interest of the affordable medicines to the patient as a whole and look into rising prices of active pharmaceutical ingredients which has necessitated the need for rise in formulation prices, informed Dr Rajesh Gupta who represented Laghu Udyog Bharati at the meet.
Dr Gupta said “We understand that central government is keen to introduce margin capping on pharmaceutical industry to curb the overcharging of the medicine price by way of prescription and generic brands molecule wherein presently Indian pharmaceutical domestic market is approximately worth Rs. 1,68,791 crore in year 2021-22 and operating by way of prescription brands marketing/generics brands marketing/over the counter/franchisee marketing in addition to various state government tenders/Jan Aushadhi Schemes to meet the needs of the suffering people.”
“We requested the government to find out another way and apply uniform formula for all segments instead of margin capping as otherwise it will boost Bahubali’s of the industry as they are able to sell on high price and shall put MRP accordingly and the channels of distributors to stockiest to retailers obviously shall promote such company brands in a true businessman spirit. The government’s purpose to provide economical generic brands will be wiped out in the next 2-3 years due to less margins or comparatively greater margin by prescription brand marketing companies,” he said.
NPPA and DoP had earlier held meetings with industry representatives on trade margin rationalization on December 10, 2019, December 27, 2019 and May 20, 2022.
The DoP had forwarded a slew of measures to rationalise the trade margins on drugs to Niti Aayog. One of the measures was to reduce trade margins to 43 per cent on non-scheduled medicines. Another measure was to cap trade margin on all formulations and dosages at 100 per cent. The department had further suggested that drugs priced Rs. 2-5 a unit should be exempted from trade margin rationalization.
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