The much publicized voluntary reduction of drug trade margins and subsequent reduction of drug prices in 1000 odd formulation packs may require a serious review as the figures submitted by the industry associations are not very specific about the actual reduction of prices. Despite a reminder from the Department of Chemicals, the list submitted by industry associations does not specify the earlier and revised price of a specific pack. Instead, the figures are a comparison between the 'revised' prices and the brand leader's price or earlier price of the particular formulation.

The vagueness in the industry response has prompted the Department of Chemicals to have an analysis done on the data provided by the industry before endorsing their 'good will'. However, advertisements were issued on October 2 in leading dailies announcing Ram Vilas Paswan's persuasive abilities that made the industry lower their trade margins on generic drugs and pass on the price benefits to the consumer.

The list submitted by Indian Drugs Manufacturers Association (IDMA) gives the name of the company, the name of the product, percentage of reduction in prices / prices lower than the brand leader, previous price / price of brand leader and the current price. For instance, the list says that the current price of Clavam 375 mg 10's manufactured by Alkem Laboratories Ltd is Rs 189.5. It also says that the previous price of brand leader is Rs 285 and the reduction in price / price lower than the brand leader is 34 per cent.

Thus, the list itself indicates that the percentage given is not that of price reduction, but that of the difference in prices between the particular company's product and that of the brand leader. In cases where the product itself is the brand leader, there could have been a reduction, but the figures apparently show that most of the companies have just compared their prices with that of the brand leader without touching the trade margins. Unless the Department of Chemicals sorts this out, the list should be seen as a face saving exercise by both the government as well as the industry, said sources.

Another interesting point that has gone unnoticed is the industry's declaration that all the proposals made during the last meeting of the 14 member pharma policy review committee by the industry associations are just proposals and not commitments. "Nothing we have offered is final or should be treated as commitment of the industry until final agreement is reached on the two substantive issues, namely interim order of the Supreme Court and the method of price control", the association proposal had mentioned.

Thus all suggestions made by the industry on voluntary reduction of trade margins, restriction of profit margins, freezing drug prices are just proposals and may not be taken up until the key policy decisions are in their favour, note sources.