The pharmaceutical traders are planning to boycott purchase of new drugs if 'MRP inclusive of taxes' not printed on the label from July 1. There is a possibility that the Government may back out from its proposed move to enforce MRP inclusive of taxes as pressure from the industry is mounting. Some other implementation issues are holding up the initiative.
According to the information available with Pharmabiz, the top level office bearers of All India Organisation of Chemists and Druggists (AIOCD) has taken a decision in this regard and it will be ratified at the executive committee meeting of AIOCD to be held at Khandala on June 23.
Sources said the move of the traders is an attempt to put pressure on the Government and industry to enforce MRP inclusive of taxes, a long pending demand of the traders. The Union Chemicals Ministry, which came out with a "proposed notification" meant to amend Drug Price Control Order 1995 for printing MRP inclusive of all taxes on the labels of medicines, has already hinted to relax the rules restricting its applicability only for the new packs marketed from July 1. Trade fears that vehement industry pressure and opposition could either freeze the Government move or further delay the notification.
Industry is of the opinion that it is practically impossible to support the demand for implementing MRP inclusive of taxes. In a recent reply to AIOCD on its concern about lack of industry support to print MRP inclusive of taxes, the IDMA had said it would be difficult for companies to withdraw or call back medicines from all over the country and overprint 'MRP inclusive of all taxes' on the packages. All states have not implemented VAT, including two major states like UP and Tamil Nadu. Further, the timeframe of two months is inadequate to implement the same and more time is required for the transition. Another problem is that when MRP inclusive of all taxes is implemented, the industry will have to keep medicines out of the purview of the Weights & Measures Act (WMA) to avoid confusion and dual system of price monitoring.
Trade is of the opinion that the industry should co-operate in realising MRP inclusive of taxes. This will bring in uniform drug prices in all the states. It will also eliminate the complexities in calculating the price of drugs and consumers will be benefited. Since Tamil Nadu and UP also has agreed to implement VAT from October, the difficulties faced by the industry will be for only three months. The Government could give another three months for disposing off the stocks based on the data provided by the industry and trade, notes AIOCD sources.