The ongoing initiatives by the Health Department of Haryana to end the practice of pharmaceutical companies offering "high margins" to retail chemists have taken a serious turn with the state department launching prosecution measures against "erring" pharma companies. During the last couple of weeks, the department has filed cases against a number of companies including Ranbaxy, Cipla and Okasa for allegedly offering "unreasonable, unethical" profit margins to the retailer. The rationale behind the huge difference between the price at which the retailer gets the products and the MRP (even 900 per cent extra at times) of these companies is questioned at the Court of Law by the department.

According to state health department officials, the prosecution measures were initiated against Ranbaxy and Okasa for alleged contravention of Section 17 © of the Drugs and Cosmetics Act 1940. Both companies have been allegedly misleading the patients by affixing exorbitant MRP on their branded medicines containing cetrizine hydrochloride.

The department finds fault with Ranbaxy for having printed Rs 26 as MRP on a strip of 10 tablets of Stanhist-10 while releasing the same to the supply chain for just Rs 2. The consumers are charged the MRP along with extra local taxes.

The complaint against Okasa is also similar. While the MRP for a strip of 10 tablets of Okacet is Rs 25, it supplied at a rate of Rs 1.94, the officials allege.

The Government of Haryana had, few months ago, wanted all drug manufacturers, wholesale distributors and C&F agents operating in the state to furnish the price structure of the drugs sold by them. The collection of details ranged from the first point sale to the retailers level and was known to be an attempt to put a curb on "the unethical practice by some unscrupulous elements of printing disproportionately high MRP on drugs/medicines / allied items like surgical goods, infusions and OT kits etc".

The State Director General of Health Services had made it clear that the information needs to be provided for all products irrespective of their being covered under DPCO or not. He had also warned of strict action against all who fail to furnish the information or produce false information.

The government had also initiated discussions with pharmaceutical industry associations and the latter are known to have given an assurance to bring down the profit margins of retail trade to a reasonable level. The companies were also known to have assured the government to bring down the MRP thereby passing on the benefits of price reduction directly to the patient.

The prosecution measures initiated by the government has signaled a crucial phase in the state's attempt to have a control over the practice of offering "high profits".

The officials however declined to explain whether the prosecution measures were initiated after consulting with the National Pharmaceutical Pricing Authority. The NPPA officials also had no comments on the development. "Its unfortunate that there is no coordination among the authority and many state governments when it comes to the matter of overpricing of drugs," they feel.