The All India Organisation of Chemists and Druggists (AIOCD) would soon ask pharma companies to include the excise duty (ED) in the maximum retail price (MRP) while offering margins to the wholesalers and retailers in the country. This was decided in the recently concluded AIOCD office bearers meeting in Mumbai. If agreed by the industry, the companies who offer margins excluding the 16 per cent excise duty will now have to take into account the gross selling price for margin consideration.

"We would now urge the companies to consider excise inclusion. There would be a series of meetings within the trade and the industry circle, where the matter will be finalized," said JS Shinde, hon gen. secretary, AIOCD.

According to officials in the trade circle, after excise inclusion, a pharma company incurs only a 1.6 per cent difference on sales, which it makes up anyhow. However, due to ever increasing trade-operating costs, it is the traders who have to face the brunt otherwise.

Currently, about 75 per cent of the companies give commissions to traders excluding excise duty and 25 per cent offer including excise duty, according to AIOCD officials.

The matter received much hearing in the trade circle after recent boycott of Plethico Pharma's products by traders in Kerala and Bengal over the non-inclusion of ED in margins, which was otherwise inclusive (before Plethico's takeover by Shreya in January 2003).

On an overall basis, price-controlled drugs attract a margin of 8 and 16 per cent for wholesalers and retailers respectively, whereas decontrolled products attract a margin of 10 and 20 per cent.