The ministry of chemicals and fertilizers has brought together the drugs trade and manufacturing sector to form a committee for self-regulation of prices of medicines. The committee, the formation of which was agreed upon by the apex organisations of both drugs trade and manufacturing, would suggest practical solutions for issues related to high trade margins before March 15, 2005.

The convenor of the committee is from the All India Organisation of Chemists and Druggists (AIOCD). It will have members from Indian Drugs Manufacturers Association (IDMA) and the Confederation of Indian Pharmaceutical Industries (SSI). The AIOCD may also invite other pharmaceutical associations to be part of the committee that has been mandated the role to find an agreeable solution to the burning problem of disproportionate rate of MRP as compared to the production cost of the drug.

The composition of the committee and its terms of reference were finalised at a meeting of the association representatives hosted by the chemicals and fertilizers ministry here on January 24, 2005.

According to sources, the committee is expected to give the government a list of drugs where the prices would be voluntarily reduced. The AIOCD is to first attempt for a consensus among its members with regard to the extent of cuts that can be made on the trade margins. Depending upon the response from their members, AIOCD is to request the pharmaceutical industry to effect these changes on the printed packs of the medicines. This, in turn, is to bring down the prices of medicines thereby benefiting the consumer. The AIOCD has already informed the ministry that they would not seek more than 100 per cent margin on generic and branded generic drugs.

The ministry had asked AIOCD to see if they could expand the Haryana Model of self-regulation to other states of the country also. The impact of MRP-based excise duty assessment on the prices of drugs, impact of reduction in trade margin and possibility of fixing ceiling on profit margins of non-scheduled formulations were also included in the agenda of the meeting.