Pharmacies offer to cap retail margins at 100%

Under pressure from the government over huge retail margins, the largest association of chemists in the country has offered to cap drug margins at 100 per cent.

In a meeting with chemicals and fertilisers ministry officials, the All-India Organisation of Chemists and Druggists (AIOCD), a parent body of 5,00,000 chemists across the country, has offered to implement a self-monitoring formula.

According to the proposal, chemists will not accept a margin in excess of 100 per cent from pharmaceutical companies.

The association claimed it had already implemented the formula in parts of Haryana after the state government raised objections to high trade margins.

"Our members in Haryana have agreed on moral and ethical grounds not to charge a margin of over 100 per cent. We have issued a circular to this effect. Now, we are ready to implement this across the country," said RB Puri, president of the druggists' body.

Following the offer, the ministry has asked the association to furnish a list of drugs on which its members are taking a limited margin. The association is slated to meet ministry officials in January to thrash out the details.

The offer comes at a time when Chemicals and Fertilisers Minister Ram Vilas Paswan has said the government will impose strict margins on drugs "" 10 per cent for wholesalers and 20 per cent for retailers in the case of branded drugs and 15 per cent for wholesalers and 35 per cent for retailers in the case of generic drugs "" as recommended by the Sandhu Committee. Companies offer huge margins to retailers in order to push sales.

Meanwhile, the Retail and Dispensing Chemists' Association, another association of drug retailers, has written to Paswan threatening agitation over the issue.

According to the association, reducing trade margins will not benefit consumers since the maximum retail prices are not being lowered.

Drug deal

• Chemicals and Fertilisers Minister Ram Vilas Paswan has said the government will impose strict margins on drugs
• An association of 500,000 chemists across the country has offered to implement a self-monitoring formula
• Following the offer, the ministry has asked the association to furnish a list of drugs on which its members are taking a limited margin