The Chemicals and Fertilizers ministry will allow the pharmaceutical industry to print MRP inclusive of taxes on medicine packs even before the mandated deadline of October 2, 2006. The ministry may come out with a clarification on its notification making MRP inclusive of taxes mandatory as a response to the doubts and queries made by various stakeholders on the implementation of the new system.

According to the draft note prepared by the Department of Chemicals, National Pharmaceutical Pricing Authority (NPPA) will continue to fix prices in the usual manner even after the MRP inclusive regime is in place. The ceiling prices will be exclusive of all taxes and the companies will be free to add whatever extra tax component applicable before printing the final MRP.

The department will clarify that the notification is applicable for the batches manufactured on or after October 2. Hence the printing of MRP inclusive of local taxes will depend on the manufacturing date printed on the product labels. The department has acknowledged the fact that two different MRPs printed on product labels, depending on their date of manufacture, is likely to be in the market for a short while. If the company desires to avoid this confusion, they will soon be allowed to start printing MRP inclusive of taxes even before October 2.

In an interaction with the industry few days ago, the department officials also clarified that MRP inclusive of all taxes does not mean Uniform MRP on medicines. "There may be different MRPs in different states for the same medicines due to variation in rates of sales tax, VAT, tax holiday, etc." Department has clarified. It wanted the industry to approach all state governments to persuade them on the need for uniform MRP at least on life saving medicines which are exempted from VAT and other taxes.

The department has sought industry comments on its draft clarification within a week's time.