Consumer Education and Research Centre (CERC), Ahmedabad, has supported the initiative taken by Ram Vilas Paswan, Union Minister for Chemicals & Fertilizers for focusing on pricing of pharmaceuticals and the current level of huge trade margins in generic drugs.

Upholding the minister's proposal, CERC has sent a statement pointing out the differences between the wholesale price at which the manufacturers sell the products to hospitals or to wholesalers and the maximum retail price at the chemist's shop. In the statement, the consumer action group has also offered all help to the minister in this matter.

In any trade, the margin of profit and cost of distribution by and among the wholesalers, semi-wholesalers and retailers cannot be more than 20 per cent at the most. In case of pharmaceuticals, it is ranging from 200 to 600 per cent, CERC added.

CERC also pointed out that it had submitted this information to the National Pharmaceutical Pricing Authority (NPPA) two years ago. It was shocked and surprised to know the wide gap between the wholesale price and the MRP. However, the CERC is yet to hear of any action taken by the NPPA in this matter.

It may be recalled that the state health ministers, in a recent interactive session called by the C & F Minister in New Delhi, had rejected the proposal for uniform pricing by waiving the local sales tax levied on drugs in their respective states. The ministers from majority of the states who attended the interactive session called by the C & F Minister here today felt that any immediate changes in the sales tax structure of drugs will cause revenue loss to the states and thereby not feasible. With this the attempts of the minister for a uniform price regime for drugs across the country will be delayed, until the Value Added Tax system is in place at the national level.

While the Union Minister was attempting for a consensus among the states to evolve a common strategy to tackle the problem, the states wanted the matter to be taken up at the level of Union Finance Minister or Prime Minister and the Empowered Committee of State Finance Ministers. The issue relating to the wide difference between wholesale prices and retail prices of non-scheduled formulations was also discussed. It was agreed that the state drug control authorities will look into the issue and where they found a high trade margin in non-scheduled formulations, especially those used in critical diseases like AIDS, Cancer etc, they should impress upon the manufacturers concerned to reduce the prices and also bring such cases to the notice of NPPA.