The SME Pharma Industries Confederation (SPIC) has urged the Congress president Sonia Gandhi to take initiative to bring all medicines under price control with an MAPE (maximum allowed post-manufacturing expenses) of 300 per cent instead of the existing 100 per cent, to make the medicines within the reach of the common people in the country.
In a letter sent to the Congress president recently, a copy of which was marked to Prime Minister Dr Manmohan Singh, the SPIC said that the twin measures of imposing MRP-based excise duty on medicines throughout the country and to bring every medicine under price control with an MAPE of 300 per cent instead of the existing 100 per cent can result in reducing prices of medicines in the country.
"If MRP based excise is imposed on medicines throughout the country, Price Control and National Pharmaceutical Pricing Authority (NPPA) which is bogged down in litigations to recover thousands of crores of rupees towards overcharging by companies, can become irrelevant except for new drugs. Alternately, let every medicine be under Price Control with a MAPE of 300 per cent instead of existing 100 per cent. Both can result in reducing price of Ceterizine to below Rs.10 from prevalent MRP of Rs.30. Political will is needed to overcome vested interests and give the common man a break", the letter said.
Urging the Congress president to take initiative to save the more than 5000 small pharma companies in the country, the SPIC in its letter said that an uneven playing field has emerged in the country due to several anti-SSI measures of the government. Giving instances, the SPIC said the tax holiday states are not only a sanctuary from increased excise burden but also from price control. A negative race has started to woo the traders with highest MRP. Many widely used lifesaving drugs remain out of price control. For instance, Ceftriaxone Inj. 1 gm which always bore MRP less than Rs.78 before levy of MRP-based excise, has skyrocketed to Rs.130 now from tax exempt states. The ex-factory price of the same is below Rs.13.
NPPA is neither empowered nor equipped to curtail prices of new brands which have proliferated using the contract manufacturing route. Secondly, powerful large industry in exempt states continues to defy the Drug Price Control Order (DPCO) by using legal lacunae. A company who owes the NPPA Rs 1000 crore for overcharging continues to indulge in blatant violation because there is no fiscal deterrent on higher MRP in tax holiday states.
Likewise, Norfloxacin 400 mg tablets having ceiling price of Rs.9.50 for 10 tablets are priced at Rs.46.63 when produced in Himachal, something that can never be done under MRP-based excise because of the excise deterrent on MRP. NIPER has also confirmed in its report to the Ministry of Chemicals and Fertilizers that some similar products when produced in Tax Holiday States bear MRP which is 324 per cent higher as compared to non exempt states.
At present the maximum MAPE allowed for the medicines fall under price control is 100 per cent, while there is no such ceiling on the other non-scheduled drugs. This has resulted in a situation where there are instances of some companies charging 1800 per cent MAPE.