The long term demand of the domestic pharma trade sector for implementation of uniform maximum retail price (MRP) inclusive of taxes for drugs across the country may soon become a reality. The Union Chemicals Ministry has come out with a "proposed notification" meant to amend Drug Price Control Order 1995 for printing MRP inclusive of all taxes on the labels of medicines. The ministry has invited comments on its proposed draft before it can be notified.

The proposed Drugs (Prices Control) Amendment Order, 2006 would make changes in Paragraph 14 of DPCO 1995 to insert terms like "maximum retail price" and "inclusive of all taxes". The change is proposed to be in force on all batches of production made on the 1st day of July, 2006 and thereafter.

The notification would also clarify that any formulation placed for sale prior to the date of commencement of the Drugs (Prices Control) Amendment Order, 2006, shall make necessary arrangements for printing the retail price of that formulation within the words "inclusive of all taxes" within a period of three months from the date of such commencement.

It should be noted that the Pronab Sen Committee, which looked into the pricing aspects of medicines last year, had emphasized the need for MRP inclusive of all taxes. The committee had noted that under the provisions of Packaged Commodities Rules1977, all commodities sold in pre-packaged form are required to have a label declaration of retail sale price in the form of MRP inclusive of all taxes and wanted it to be made applicable to medicines also.

The draft Pharma Policy 2006 (Part A) also makes specific mention about MRP inclusive of taxes. "DPCO requires 'Retail Price not to exceed Rs……local taxes extra,'' so that basic MRP is strictly followed and only actual taxes, which vary, are charged extra. However, in practice, this often leads to wrong calculations, extra charges and arguments between the dealer and the consumer. From the consumer's point of view it is most desirable that the total price should be absolutely clear on the pack and uniform all over India. It has now been decided that the concept of MRP inclusive of taxes would be made applicable to medicines sold in the packaged form" It has stated. The draft policy states that the introduction of VAT in several states at the uniform rate of 4 per cent (with remaining states to follow suit ) and CST likely to be made 2 per cent for the time being and soon to be abolished time has now come to introduce MRP inclusive of all taxes to drugs and medicines . It had also hinted that the industry should be given three months' time to switch over to the new system.