Himachal pharma firms oppose capping on trade margins

Tribune News Service

Ambika Sharma

Solan, July 27

The Himachal Drug Manufacturers Association yesterday met Union Health and Family Welfare and Chemical and Fertilisers Minister Mansukh Mandaviya in Delhi on the issue of trade margin rationalisation (TMR) on non-schedule drugs which, they say, is contrary to the move to provide affordable medicines to patients. Non-schedule drugs do not fall under the price control.

Association president Rajesh Gupta said the minister directed the officers to analyse their views on TMR and work towards making the medicines affordable for patients. Issues like price of active pharmaceutical ingredients, which is their raw material, would be reviewed as well.

Gupta explained, “There is a major lacuna in the proposed formula as it discriminates the branded generics sales compared to the prescription drug sales. In case of prescription drugs, manufacturer representatives approach the doctors and pursued them to prescribe their drugs while bearing all marketing costs. The drugs are billed at 65 to 70 per cent of the maximum retail price and the stockist, retailer and wholesaler derive a higher price.”

He said, “On the other hand, in case of generic drug-selling companies, the price to the stockist is one-third vis-à-vis prescription drug. In the absence of any marketing infrastructure, they use that of the distributor. The patients at times get benefit by way of discounts on such drugs from the retailers to promote their sales.”

The tier-II cities, far-end areas, interior and rural areas are covered by the distributors rather than the prescription-based marketing representatives. The proposed move will cap their trade margins. It will reduce the MRP on generic drugs and this will hit their sales as distributors will not opt for them in view of lower trade margins. This would defeat the purpose of making available affordable drugs as these drugs would find no distributors.

This would hit 80 per cent of the Micro Small and Medium Enterprises who survive on third party manufacturing.

They have requested to opt for “One Nation, One Molecule/drug combination, One MRP” for drugs falling under the national list of essential medicines to control the exorbitant MRPs.

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