The drug traders in the country have suggested to the government that they would provide data on generic drugs on a regular basis to help the government fix a reasonable price for generic drugs.

The drug traders made it clear at the last week pharma advisory meeting that they would be ready to accept a margin of 15% for wholesalers and 35% for retailers in case of generics, provided the government brings them under price control.

Similarly, the government also could mandate the manufacturer to inform them on the manufacturing costs of generics. Considering both the data, the government could decide on the 'reasonable cap' for generic drugs, suggested the All India Organisation of Chemists and Druggists (AIOCD) to Union Chemical Minister Ram Vilas Paswan.

The suggestion of traders has come as a welcome opportunity for the government to bring generics under price control. The government was finding it difficult to find an acceptable solution to bring generics under price control as the National Pharmaceutical Pricing Authority (NPPA), had informed the government of its inability to mobilise data on generic drug prices, sources told Pharmabiz.

The Union Minister welcomed the traders' recommendations and has invited them for further detailed discussions on February 22 to work out a formula, it is learnt.

At present generics drugs constitute about 7% of the Rs 35,000 crore market. The traders move to compromise a small percentage of their margins has wider business motives than supporting the government to reduce prices for the consumers. Traders calculate that it would help them to establish control on generic drug sales through hospital pharmacies, point out sources.

Traders lament that about 30 per cent of the drug trade that takes place in India is through hospital pharmacies and a majority is direct sales between doctors and companies who fix margins and prices according to their will. More than half of the hospital pharmacies lack licenses for drug trade and this sector could be brought under the regulatory ambit.

Similarly, the drug traders are also supporting the government move to exempt taxes for all HIV/anti-cancer drugs, including that for imported drugs. At present any one with a valid import license can import these drugs. It is estimated that the HIV/anti-cancer drug sales in India is valued at Rs 2500-Rs 3000 crore. This is likely to grow to Rs 5000 crore in the next one or two years. About 60 per cent of this market constitutes imported drugs, now mostly controlled by players outside organised drug trade. Mostly, they inflate the prices of imported drugs in the invoices to reap more margins. The traders suggest that they are ready to reduce their margins to 8% for wholesalers and 14% for retailers in the case of such drugs from the existing 10% and 20% category.