The Hindu : Business : Move to cap margin on non-branded drugs

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Thursday, Apr 24, 2008
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Move to cap margin on non-branded drugs

Special Correspondent

Dept. of Chemicals and Fertilisers to work on the guidelines

— PHOTO: ANU PUSHKARNA

PRICE CHECK: Ram Vilas Paswan (right), Minister for Chemicals, Fertilizers and Steel, with V. S. Sampath, Secretary, at the fourth meeting of the Pharmaceutical Advisory Forum in New Delhi on Wednesday.

NEW DELHI: In another initiative towards keeping keep the prices of drugs under check, the Pharmaceutical Advisory Forum has proposed a cap on margins of non-branded generic drugs at 400 per cent of post manufacturing cost.

At present, there is no cap on the margin of such drugs that are sold under chemical names such as cetrizene, omeprazole and nimusulide and constitute about 8 per cent of the Rs. 30,000 crore Indian pharmaceutical market. Some of these drugs are sold at a high margin of 1,000 per cent as per official assessment.

At a crucial meeting of the Pharmaceutical Advisory Forum, comprising representatives from the Union Chemicals and Fertilisers Ministry, National Pharmaceutical Pricing Authority (NPPA), consumer organisations and State drug controllers here on Wednesday it was proposed that margins on non-branded generic drugs be fixed at 400 per cent of the maximum allowable post-manufacturing expenses (MAPE). “We have asked the Department of Chemicals and Fertilisers to study the implementation part of this suggestion given by the Pharmaceutical Advisory Forum and to work on the guidelines,” Chemicals and Fertilisers Minister, Ram Vilas Paswan, told reporters here.

Indications are that the government will also set up a committee to look into the profit margins of the branded generic drugs. According to Mr. Paswan, a study conducted by NPPA has revealed that some of the branded generic drugs are sold at very high prices making it unaffordable to poor people.

Significantly, the National Pharmaceutical Pricing Authority will start a 24-hour call centre with a toll free number shortly for registering complaints on medicine prices. The call centre will also guide the caller on the complaints lodged by them.

It was agreed that the next meeting would focus on entry prices of new drugs, including imported formulations and promotional/marketing expenditure by the pharmaceutical companies.

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