The Bangalore District Chemists and Druggists Association (BDCDA) has urged the department of pharmaceuticals (DoP) to raise the trade margins of wholesalers and retailers to 10 per cent and 20 per cent respectively, based on price to retailer inclusive of excise and added taxes on all formulations.
Incidentally, the DoP had called a meeting with trade and industry regarding trade margins on August 14, 2015 and BDCDA had attended the same.
At the meeting, the Association pointed out to the DoP that in its memorandum via BDCDA/1532 dated July 15, 2013, BDCDA/1893 dated November 26, 2014 and BDCDA/1897 dated December 21, 2014 that all the manufactures and marketing companies were providing the margins exclusive of excise duty.
“We wish to state that in DPCO 2013, margin to wholesalers has to be regulated. The margins to retailers has been fixed at 16 per cent on base rate which amounts to 13.7 per cent on the NLEM. Now as per DPCO 1995, a minimum margin of 16 per cent on MRP was provided to retailers only on scheduled formulations. The manufacturers and marketers were providing margins exclusive of the excise duty,” said V Harikrishnan, president, BDCDA and KCDA.
“Therefore, we request the DoP to facilitate the regulation of trade margin to retailers with 20 per cent on MRP or 25 per cent on base rate which amounts to 20 per cent on MRP and 10 per cent to wholesalers on price to retailer and added taxes,” he added.
BDCDA is pressing for this because DPCO 2013 provides manufacturers and marketers with brand and market based price calculated on price to retailer inclusive of excise.
Harikrishnan pointed out that the Sandhu committee summary 2004, regarding margins also supports to facilitate regulations of trade margins to wholesalers and retailers as requested in our memorandum.
Now the Sandhu committee had recommended trade margins of 8 per cent for wholesalers and 16 per cent for retailers on scheduled formulations. In the case of non-scheduled formulations, trade margins are 10 per cent for wholesalers and 20 per cent for retailers for branded category of drugs. In the case of generic drugs, it has indicated higher margins of 15 per cent and 35 per cent for wholesalers and retailers respectively. These margins would be inclusive of various trade discounts offered by the industry to the dealers. However, the modalities for implementation need to be worked out in consultation with the NPPA, stated Harikrishnan.
Keeping in mind the objectives of the government, in making medicines availability at affordable and reasonable prices, BDCDA is requesting to facilitate regulations of uniform trade margins which is 20 per cent to the retailer and 10 per cent to the wholesaler on price to retailer inclusive of excise duties, he said.
“We agree with the NPPA’s definition of generics and request to incorporate a separate calculation in fixing the ceiling prices taking into consideration the price sold to the trade with lesser MRP which serves the objective of the Union government in constituting the DPCO 2013,” said Harikrishnan.