Drug makers oppose move to cut margins

Indian Drug Manufacturers' Association (IDMA), the apex body of over 500 drug manufacturers in the country, issued a statement today protesting against the government's initiative to reduce trade margins of pharmaceutical products in the country.

The idea behind the government's move to control the increasing prices of pharmaceutical products is a direct outcome of the widening gap between manufacturing costs and the retail prices of drugs.

The difference between wholesale and retail prices of drugs have been found to be over 30-50 times in case of many drugs.

Expressing concern over the initiative being taken by the government to make pharmaceutical products more affordable, Daara B Patel, secretary general of IDMA, said: "The reduction in trade margins would badly affect the small scale industry as they follow the trade route and not the ethical route to promote their products through doctors. As they are more dependent on trade to promote their products, they need to offer high margins failing which it is difficult for the trade to promote the products."

"We do not see how the reduction in margins would benefit the consumer, as reduction in trade margins would not automatically reduce the prices of medicines," he added.

A survey conducted by the National Pharmaceutical Pricing Authority (NPPA) on 45 drugs revealed that while the wholesale rate of the generic version of Nimesulide (100 mg), the pain killer, is Rs 1.20 for a 10 tablets, its retail price ranges between Rs 21 and Rs 30. The same drug, when sold as a branded generic, is priced at Rs 38.61 (Nise, a Dr Reddy's brand) for 10 tablets.

A retail chemist buys Cadila Healthcare's Nimfast for Rs 1.76 and sells it at Rs 24 and Cipla's NICIP/Nimesulide 100 mg tablets for Rs 2 and sells them at an MRP of Rs 25. Similarly, a retail chemist buys Cetrizine (10 mg strip), used to treat colds, for 80 paise and sells it at a retail price of Rs 26.