Last Updated on January 6, 2024 by The Health Master
The government is set to rationalize trade margins on non-scheduled drugs soon. The drug industry and government agencies have come together to discuss trade margin rationalization at length to ensure access to quality healthcare at an affordable price.
One molecule-one MRP
At a meeting convened by the National Pharmaceutical Pricing Authority (NPPA) on July 26, 2022, representatives of several industry associations, including the following, argued for the adoption of the “one molecule-one MRP” formula instead of the trade margin rationalization (TMR) on non-scheduled drugs to decrease their prices at a meeting convened by the National Pharmaceutical Pricing Authority (NPPA) on July 26, 2022:
- Laghu Udyog Bharati,
- Small and Medium Pharma Manufacturers Association (SMPMA),
- The Indian Federation of Pharma Generics,
- Represent scores of small and medium drug firms.
The meet was attended by industry representatives along with the Union minister for health and chemicals and fertilizers Mansukh Mandaviya, department of pharmaceuticals (DoP) secretary S Aparna, NPPA chairman Kamlesh Pant and other NPPA officials.
The minister has listened to suggestions of industry representatives on trade margin rationalization and directed concerned officers to analyze them deeply in the interest of affordable medicines for the patient as a whole and look into the rising prices of active pharmaceutical ingredients, which have necessitated the need for rises in formulation prices, informed Dr. Rajesh Gupta, who represented Laghu Udyog Bharati at the meet.
Dr. Gupta said, “We understand that the central government is keen to introduce margin capping on the pharmaceutical industry to curb the overcharging of the medicine price by way of prescription and generic brands molecules wherein the presently Indian pharmaceutical domestic market is approximately worth Rs. 1,68,791 crore in the year 2021-22 and operating by way of prescription brand marketing, generic brand marketing, over the counter/franchisee marketing, in addition to various state government tenders/Jan Aushadhi Schemes to meet the needs of the suffering people.”
“We requested the government to find out another way and apply the uniform formula for all segments instead of margin capping as otherwise, it will boost Bahubali’s of the industry as they are able to sell on high price and shall put MRP accordingly and the channels of distributors to stockiest to retailers obviously shall promote such company brands in a true businessman spirit. The government’s purpose to provide economical generic brands will be wiped out in the next 2-3 years due to fewer margins or comparatively greater margins by prescription brand marketing companies, “he said.
NPPA and DoP had earlier held meetings with industry representatives on trade margin rationalization on December 10, 2019, December 27, 2019, and May 20, 2022.
The DoP had forwarded a slew of measures to rationalize the trade margins on drugs to Niti Aayog. One of the measures was to reduce trade margins to 43 percent on non-scheduled medicines.
Another measure was to cap the trade margin on all formulations and dosages at 100 percent. The department had further suggested that drugs priced at Rs. 2-5 a unit should be exempted from trade margin rationalization.
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