NEW DELHI: Moving ahead with its plans to curb profiteering and expand the purview of price regulation, the government is mulling a cap on trade margins of all non-scheduled medicines and medical devices that are currently outside price control. The department of pharmaceuticals (DoP) has called for a stakeholder consultation this Friday to discuss trade margin rationalisation with the industry and civil society, sources said.
The department is likely to discuss a number of options including a cap ranging between 30-50% on non-scheduled drugs, while exempting lower priced medicines with MRP of Rs 2-5 per unit. It had also discussed similar options with NITI Aayog last month following mounting pressure from the US to lift price control on stents and knee implants.
Sources indicated that India is considering loosening its price control for medical devices by applying trade margin on stents and knee implants at the first point of sale (price to stockist), instead of imposing a cap as it is at present.
The stakeholder consultation on Friday will be chaired by Shubhra Singh, chief of National Pharmaceutical Pricing Authority (NPPA) – which regulates drug prices in the country. Apart from drug makers and medical device manufacturers, the meeting is also likely to be attended by trade associations like All India Organisation of Chemists and Druggists (AIOCD) and All India Chemists and Distributors Federation (AICDF). Besides, public health groups like Jan Swasthya Abhiyan and All India Drug Action Network (AIDAN) will also participate in the consultation.
The meeting is being watched closely by many because it might overhaul the entire price control regime if the government decides to cap trade margins.
While interests of traders including chemists, distributors and hospitals – which earn huge margins on product prices – are at stake, the move will also impact marketing practices of several pharmaceutical companies. Trade margins are crucial for companies to push products on the shelves and boost sales.
On the other hand, a trade margin cap would mean companies will be free to decide the launch price of their products – a major departure from the existing scenario.
At present, the government caps MRP of 384 ‘essential medicines’ based on the average price of all drugs in a particular therapeutic segment with more than 1% market share. Prices of these drugs are revised annually based on the wholesale price index (WPI). Apart from that if a company wants to raise prices of these medicines, it has to seek an approval from the drug price regulator.
For all other ‘non-scheduled’ drugs, companies are allowed to increase prices by up to 10% annually.
In case of medical devices, only a select few like stents, knee implants and condoms are under government determined price cap.
Apart from these, the government has also recently imposed trade margin cap of 30% on 42 cancer medicines.

Source link


Please enter your comment!
Please enter your name here