- The government plans to cap traders margins at about 100 per cent across drug categories - generic, branded, scheduled and non-scheduled.
- A notification in this regard will be sent out within the next six months.
- Distributors currently charge margins as high as 1,000 per cent.
The government is planning to cut down the profit margins of chemists and drug wholesalers in order to bring down the cost of crucial drugs for consumers, The Hindustan Times reported.
Often, the retail prices of drugs for cancer, and heart, liver and kidney ailments, are 11 times higher than their production costs. "We plan to cap traders' margins at about 100 per cent across drug categories - generic, branded, scheduled and non-scheduled," said Hansraj Gangaram, minister of state for chemicals and fertilisers. "Chemists and distributors are currently charging exorbitant margins which are as high as 1,000 per cent and above. Controlling and squeezing the margins would bring down the prices."
A notification in this regard will be sent out within the next six months.
A Bihar health department report shows the difference between the cost of drugs issued by manufacturers to wholesalers and retailers and their maximum retail prices. For instance, a 500 mg tablet of the chemotheraphy drug Mobtas is supplied by the manufacturer for Rs 20,233, while its MRP is Rs 37,500.
The government's pharma department had set up a panel to collect the views on drug pricing from all the stakeholders. "This week, the committee has submitted the report," said Gangaram. "Once the new trade margins are notified, drug companies will have to reduce their MRPs, which in turn would lower the profits of retailers."