The National Pharmaceutical Pricing Authority (NPPA) has asked the pharmaceutical industry associations to suggest a way out to regulate the hefty retail margins enjoyed by the pharmaceutical trade on generic drugs. The authority is in the process of gathering response from the industry to finalize the next course of action.

According to Arun Kshetrapal, chairman NPPA, the authority had given six months time to the industry to find its own way to put an effective control over the retail prices. “The six months are almost over and we are in the process of getting their feedbacks. Lets see what they have done. Based on the industry response we may have to initiate a study to analyze the magnitude of the problem and plan remedial actions”, he said. The chairman pointed out that NPPA has identified huge trade margins offered to the retail drugs trade sector as a major factor that makes drug prices high for the consumer. He felt that the industry and trade should come together to bring down the trade margins, and pass on the benefits to the patients.

Kshetrapal wanted the industry to take matured decisions and reduce the need for government intervention. “There has to be healthy competition within the industry resulting in reduced drug prices. It is important for Indian pharmaceutical industry to build a brand image within the country if they are hoping to be accepted in foreign markets.

The industry should remember that the primary responsibility for bringing down the prices of drugs rests on the industry itself. A self-regulatory mechanism is more plausible than frequent government interventions. If the government control over the pricing of drugs is to go down, the private drug-manufacturing sector has to cooperate. The manufacturer, the wholesaler and the retailer should all feel responsible enough in effecting an automatic price control, he felt.

The chairman informed that he is to have direct interactions with industry associations like Indian Drug Manufacturers Association (IDMA) and Organisation of Pharmaceutical Producers of India (OPPI) in the second week of January 2003.

NPPA has been established to fix/revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995. The organization is entrusted with the task of recovering amounts overcharged by manufacturers for the controlled drugs from the consumers. It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.