Trade margins on generic drugs to be capped at 50 pc

New Delhi: A Consensus on capping the trade margins of generic drugs at 50 per cent has been reached with the drug retail industry, with the wholesaler and retailer sharing 15 per cent and 35 per cent, respectively.

So far, for trade marginsfor branded drugs, the margin for the wholesaler has been fixed at 10 per cent and retailer at 20 per cent, while for drugs whose prices are controlled by the National Pharmaceutical Pricing Authority, the margins are at 8 per cent and 16 per cent. A meeting with the drugs and chemists association will be held later this month to draw up the list of generic drugs.

Speaking to newspersons on Saturday after the first meeting of the Pharmaceutical Advisory Forum, the Chemicals and Fertilisers Minister, Mr Ram Vilas Paswan, said, 'The trade margins for generic products were very high, going up to as much as 1,000 per cent. The cap would put an end to this.'

The deadline: Besides this, the Government has also suggested that the Maximum Retail Price (MRP) should be inclusive of all taxes and drug's name, its MRP, as well as date of manufacture and expiry should be printed in both English and Hindi. While these norms will come into effect from April 1, the deadline for MRP inclusive of taxes is August 15, while that for Hindi language markings is October 2.

Also, it has been proposed that the patient information slip should be made simpler and easy to understand.

It has also been proposed that medicines for cancer and HIV/AIDS be exempted from levies. 'State authorities have promised to levy zero tax on cancer and HIV drugs if the Centre does so,' he added. Mr Paswan said all stakeholders had agreed to cooperate in making cancer and HIV/AIDS drugs available at reduced prices.

Bringing down excise duty: Another suggestion made on Saturday is to bring down the excise duty from 16 per cent to 8 per cent. Mr Paswan said that a proposal had already been sent to the Finance Ministry. ``Currently some States, such as Uttranchal, Jammu and Kashmir, have 0 per cent excise. Overall reduction of excise duty would control shifting of industries as the differential is not good for the rest of States that levy higher excise duty,' he said.

The industry is also of the view that the revenues collected through excise could be utilised for improving the healthcare needs of the poor. Mr Paswan said the Government was looking at various options to provide free drugs for people falling in the BPL category and would hold discussions with other ministries.

'We are assessing the options to provide free drugs to people below poverty line and will talk to the Ministries concerned for the funds required,' he said.

He further said that there wasneed to encourage public sector units involved in drug development. 'We are in discussion with various States to procure drugs from PSUs on priority. It would help them function better and make drugs available when required,' he added.

While stressing that herbal medicines need to be promoted, Mr Paswan said that neutraceuticals and medical devices also need to be included in the definition of drugs.