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Reduction in drug price not in sight

Drug prices in some cases have risen by as much as 20 per cent and the NPPA has intervened to rationalise prices, reports Archana Khatri.

business Updated: Dec 07, 2007 22:58 IST
Archana Khatri

Relief from the high retail prices for drugs may not happen in the near future as the Ministry of Chemicals and Fertilizers is yet to take a call on recommendations of the National Pharma Pricing Authority (NPPA) which had recommended a lowering of the maximum retail prices (MRP) of scheduled drugs.

Speaking to Hindustan Times, on the question of fixing trade margins for drug suppliers which are as high as 200 per cent in the case of some drugs, A.K. Singhal, Advisor ( Pricing) at NPPA said, “Even the MRP of drugs in some cases are very high. That needs to be brought down and the matter is pending with the ministry.”

Last Friday, Minister of State in the Ministry of Chemicals and Fertilizers, B.K. Handique, in response to a question from Rajya Sabha member Shobhana Bhartia, had said that no agreement has been arrived between the Ministry of Chemicals and Fertilizers and the drug industry on the price control issue. The ministry had suggested that drugs priced up to Rs 3 per tablet would be kept outside price controls and all drugs priced at more than Rs 3 per tablet would come under price controls.

NPPA had also recommended the fixing of trade margins for retailers at 10 per cent of the MRP, and for wholesalers 20 per cent of the MRP. But whether it is accepted in full or with amendments depends on the ministry. The Drugs (Prices Control) Order of 1995 has a provision for 16 per cent margins to retailers for scheduled formulations.

An official in the drug manufacturers association said, “Margins should not be based on a percentage basis. If the price of a certain drug is also low, the manufacturer is bound to be in loss. The ministry should ask for the reduction in prices on a case-by-case basis.”

Drug prices in some cases have risen by as much as 20 per cent and the NPPA has intervened to rationalise prices.