1000% ‘profit margin’, curb prices of life-saving drugs: NGO

Ravinder Sood

Palampur, July 13

Even as the Union Government controls the prices of over 500 brands of medicines and the prices have come down by up to 150 per cent, some life-saving drugs are still beyond the reach of the common man because of certain ‘loopholes’ in the drug policy.

How consumers are being cheated by the drug manufacturers and chemists is evident from the fact that the difference in the cost price (CP) and maximum retail price (MRP) in nearly half of the generic drugs ranges between 100 per cent and 1,000 per cent. Not only private chemists, but shops under the Himachal Pradesh Civil Supply Corporation, a government undertaking running over 200 shops at the state hospitals and medical colleges, are also selling generic drugs at very high prices to the consumers.

Though the government claims that it allows a discount of 20 per cent on medicines, the ground situation is different. For instance, the printed MRP on a common drug used for hypertension is Rs 120 for a strip of 10 tablets, against the cost price of Rs 40. Even after giving 20 per cent discount, the shops run by the civil supply corporation are getting a profit of Rs 56 per strip. Similar is the situation with other medicines.

According to information gathered by The Tribune, in some medicines, the profit margin is up to 2,000 per cent. An injection given to a patient in case of a severe heart attack carries a profit margin of 1,200 per cent. Likewise, most injectable antibiotics carry a profit margin of 900 per cent.

Despite the fact the Essential Commodities Price Control Act is applicable in many states of the country, which also covers the sale of drugs, no action has been initiated against erring companies, wholesalers and retailers for overcharging the consumers.

KB Ralhan, co-convener of NGO People’s Voice, said the Government of India should regulate the prices of medicines so that the common man was not cheated by the chemists and drug manufacturers.

There is a general impression among the consumers that profit margin in branded drugs is 10 to 20 per cent, but if one goes through the wholesale price list of some drug companies — which is in the possession of The Tribune — it comes to light that these companies are allowing a profit margin to the retailers between 100 to 500 per cent.

The medicines with same salt are selling at different prices under different trade names, affecting patients because the government has controlled the pricing of branded medicines but not the salt used in these. The “defective” drug pricing system has given a free hand to drug manufacturers to put a high MRP on drugs being used by every third citizen of the country.

Regulate prices

The Government of India should regulate the prices of medicines so that common man is not cheated by chemists and drug manufacturers. — KB Ralhan, co-convener of NGO People’s Voice