Citing inventory clearance and annual accounts closure, Karnataka pharmaceutical companies are objecting to the immediate implementation of price reduction ordered by National Pharmaceutical Pricing Authority (NPPA).

In the wake of the 8 per cent excise duty reduction by the central government in the Union Budget, the NPPA had asked the drug companies to pass on the benefit to the consumers by slashing the drug prices by 4.58 per cent on scheduled drugs with immediate effect on March 5, 2008.
The new price change with immediate effect is viewed as both laborious and a difficult exercise over and above the additional expenses in going for the new packaging. Efforts like embossing or over-printing are unethical practices leaving a negative impact on the end-user. Therefore, going in for new pack is the only answer and time is too short for the same, Karnataka pharma industry sources said.

Though such changes will come into effect from the beginning of the new financial year on April 1, the NPPA order calls for immediate reduction of drug prices. Pharma companies informed that a minimum lead time of one month is required to pass on the excise benefit to the consumers.

Right now no efforts to bring down prices have been made because of the financial year closure. Discussions on the pricing mechanism will take place between the second and the third week of this month. The new pricing will come into effect from April 1, 2008, sources said.

According to VR Kannan, pharma consultant, there is no doubt companies will not be able to do things instantly. Pharma industry has a structured distribution system channelized through super stockists, retail and patients. There is always an ample pipeline stock and price change cannot be carried out immediately.

Although there is no question of calling back stocks, the existing product inventory will continue to be in the market at the same price. But the batch of drugs under production from March 1, 2008 will carry the new price, stated Suresh Khanna, managing director, Dossier Solutions Pvt, Ltd.