The Union Chemicals Ministry is known to be favouring an increase in Maximum Allowable Post-manufacturing Expenses (MAPE) for pharmaceutical products even if it results in a marginal increase in the retail prices of drugs. The ministry's proposal to increase MAPE from the current 100% to 150%, if comes, would be solely aimed at providing an assured minimum profit for price controlled drugs to prevent companies from stopping the production of such essential drugs due to lack of margins.

The ministry is of the opinion that without 150% MAPE, the companies may find it unviable to produce price controlled drugs. The additional MAPE would be recommended on account of additional expenses occurring to pharmaceutical companies on account of implementation of Schedule M, burden of fringe benefit tax, service tax, cost of inflation and the extra cost incurred in pollution control programmes etc. The department estimates conclude that the average profit on a price controlled drug under present day conditions could be just between 5-8 %. The Part B of Pharma Policy 2006, which is under finalization by the Chemicals Ministry, is to give clear indications on the future plans of the government.

The government feels that without 150% MAPE the product may turn unviable for companies that are involved in ethical sales. This could lead to discontinuation of production and resultant unavailability of essential drugs, they fear.

As Pharmabiz had reported earlier, the proposal to increase MAPE also makes sense when realizing the fact that the government is under compulsion to bring all essential drugs under price control. As per the DPCO, the MAPE is 100% and the total trade margins allowed are 16% and 8% on MRP for retail and wholesale chemists respectively.