The attempts of the ministry of chemicals and fertilizers to bring drug manufacturers and the trade sector to the negotiating table for framing a code of self-regulation have suffered a setback. The committee for self-regulation of drug prices, which was formed at the behest of the ministry with pharmaceutical industry and trade association leaders as its members, is yet to come out with any concrete suggestions.
According to sources, the committee, which was supposed to submit its proposals to put an end to the high trade margin issue by mid-March, has not prepared any draft till date. While the trade sector was engrossed with the Value Added Tax (VAT) issues, the industry was all for complaints about the central decision to calculate excise duty based on MRP. The two issues killed the enthusiasm for a joint sitting on the trade margin controversy, thereby puncturing the efforts of the Chemicals and Fertilizers Ministry to find a solution from 'within' to end the high trade margin problems.
The committee members were chosen from the All India Organisation of Chemists and Druggists (AIOCD), Indian Drugs Manufacturers Association (IDMA) and the Confederation of Indian Pharmaceutical Industries (SSI). With the industry backing out from its commitment to find a way to end the practice of printing highly disproportionate MRP rates as compared to the production cost of the drug, the onus is on the nation taskforce that is looking into the matter.
Interestingly, the committee was supposed to give the government a list of drugs where the prices would be voluntarily reduced. It was suggested that AIOCD should first attempt for a consensus among its members with regard to the extent of sacrifices that can be made on the trade margins. Depending upon the response from their members, AIOCD was to inform the pharmaceutical industry to effect these changes on the printed packs of the medicines.
The AIOCD's public stand is to avoid seeking more than 100 per cent margin on generic and branded generic drugs.
The ministry had asked AIOCD to see if they could expand the Haryana Model of self-regulation to other states of the country also. The impact of MRP based excise duty assessment on the prices of drugs, impact of reduction in trade margin and possibility of fixing ceiling on profit margins of non-scheduled formulations were also to be discussed by the committee.