Last Updated on January 9, 2024 by The Health Master
New Delhi: The government is in the final stages of introducing trade margin rationalization (TMR) on about 100 odd pharmaceutical formulations, people aware of the development said.
TMR will allow the government to cap the margins of supply chain players such as distributors and retailers.
It is learnt that the law ministry has vetted and approved the amendments to the Drug (Prices Control) Order (DPCO) 2013 to incorporate TMR and some new clauses.
The Department of Pharmaceuticals under the Ministry of Chemicals and Fertilisers has sought tweaking of paragraph 19 of the DPCO for the fixation of the maximum retail price (MRP) of any class of non-scheduled drugs under TMR.
“The government may if it considers necessary to do so in the public interest, fix the trade margin (in percentage) of any class of non-scheduled drug as specified from time to time.
In such cases,” the tweaked para will read as per the department’s proposal.
The proposed amendment order, to be called Drugs (Prices Control) Order 2022, was sent to the law ministry last month, the people cited above said.
A list of formulations to be brought under TMR has also been sent to the Union health minister for final approval.
The first list of drugs has been prepared by technical experts at various government bodies, including the National Pharmaceutical Pricing Authority (NPPA), Central Drugs Standard Control Organisation (CDSCO), All India Institute of Medical Sciences (AIIMS), and Directorate General of Health Services (DGHS).
The government does not propose to apply TMR on drugs for which exemption is granted under para 32 of the DPCO, which says the price cap won’t apply if a new drug developed through a unique and indigenous process is patented under the Indian Patents Act and is not produced elsewhere.
It is also likely to exclude low-cost drugs, non-scheduled drugs, and those used to treat rare diseases from the ambit of TMR.
The starting point of the implementation of trade margin rationalization will be the ‘point to distributor’ (PTD), the people cited above said.
However, Malini Aisola, co-convenor of All-India Drug Action Network (Aidan), however, said doing it from PTD will not have any major impact on prices.
“We have been saying that this is incorrect and needs to be implemented by ex-factory price/landed cost,” she said.
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