Union Minister of Chemicals & Fertilizers and Steel Ram Vilas Paswan has welcomed the decision of the Organisation of Pharmaceutical Producers of India (OPPI) to introduce a code for pharmaceutical marketing, which disallows companies giving gifts to doctors for endorsing drugs.

The Minister said this move would help in reducing the prices of essential drugs and would benefit the common man. He expressed the hope that other associations of drug manufacturers would follow the OPPI initiative.

Paswan said, that such incentives offered by pharma companies to medical practitioners were being shown as promotional expenses thereby adding to the cost of marketing drugs. These promotional expenses are ultimately borne by the patients, as they are included in MRP.

The issue has come into focus as a result of the proposals in National Pharma Policy, 2006, which has proposed that essential medicines of specified strengths and dosages would be brought under cost, based price control. Cost based price control model would limit the promotional expenses, he said in a statement here.

These expenses would have to be covered within the Maximum Allowable Post-manufacturing Expenses and it is proposed at 150 per cent of ex factory cost for all companies and 200 per cent for R&D intensive companies.

MAPE includes wholesalers and retailers margins, promotional and marketing costs, transportation and profit margin of the producer. As per the existing policy, MAPE is given at 100 per cent of the cost of production.