IDMA to pare prices of branded generics by 20%

Indian Drug Manufacturers' Association (IDMA), the apex body of over 500 pharmaceutical and bulk drug manufacturers, has decided to voluntarily reduce prices of specified branded generics with high trade margins by 20 per cent.

The move is aimed at supporting the government in its bid to curtail high-trade margins offered by drug makers which eventually lead top a high drug prices and a vast difference between the manufacturing and selling price of drugs.

In a letter to G S Sandhu, joint secretary (pharmaceutical industry), ministry of chemicals and fertilisers, IDMA conveyed its decision as an apt solution towards containing trade margins on generics.

The government is essentially looking at formulating a mechanism to control the price of decontrolled drugs beyond a certain limit.

The Sandhu committee is examining the drug price control mechanism and is expect to formulate guidelines to control trade margins. Industry sources pointed out the possibility of ceiling trade margins of all pharmaceutical products across the board.

The committee is understood to have submitted the report on October 30.

A study conducted by the ministry revealed that while the cost of production of certain drugs were less than Rs 2, the branded versions of the same drugs were being sold at over Rs 40.

The drug makers offer high margins to chemists as an incentive to push generic drugs.

While the maximum retail trade margin for a controlled drug is fixed at 16 per cent, there is no such restriction on control-free drug.