All India Organisation of Chemists and Druggists (AIOCD) has demanded trade margins of all generics, scheduled, non scheduled drugs, ethical, non-ethical medicines, surgical equipments viz. stents, orthopaedic implants should be capped at 50 per cent of maximum retail price (MRP) including 15 per cent for wholesalers and 35 per cent for retailers in the interest of both consumers and pharmaceuticals.

“At times trade margin in generics and surgical devices ranges from 100-500 per cent. Hence we favour putting lower trade margin in all generics and surgical equipments at 50 per cent,” said Suresh Gupta, general secretary of AIOCD while reacting to recommendation of the Committee on High Trade Margins, set up by department of pharmaceuticals. The committee recommended cap of trade margins of all drugs including stents and orthopaedic implants, whether scheduled or non-scheduled, ethical or non-ethical, generic or branded generics to curb fleecing of consumers.

Gupta also emphasized the need to amend Drugs Prices Control Order (DPCO), 2013 to allow 35 per cent trade margins on generics and surgical devices’ MRP for retailers and 15 per cent for wholesalers. Currently, Para 7 of Drugs Prices Control Order (DPCO), 2013 lays down that while fixing a ceiling price of scheduled formulations and retail prices of new drugs, 16 per cent of price to retailer as a margin to retailer shall be allowed, he said.

He demanded that the government should clarify wholesale margin in the DPCO.

“We have submitted memoranda to National Pharmaceutical Pricing Authority (NPPA), Drug Controller General of India (DCGI), Department of Pharmaceutical (DoP), and health ministry in this regard,” he stated.

The committee recommended that no cap on drugs, the retail price of which is upto Rs.2 per unit i.e. per tablet, per capsule, per vial, tube, bottle, injection etc. It also proposed graded trade margins with reference to the Price to Trade  such as margin with reference to MRP per tablet, capsule, vial, tube, bottle, injection, etc. There should be higher trade margin cap for lower value drugs and lower margins for higher value drugs.

AIOCD has opposed the committee’s recommendation saying that it will harm the interest of traders as well as consumers. There should be no graded trade margins like 30 per cent, 40 per cent, 50 per cent. The government should come up with a proposal to fix trade margin on generics and surgical equipments at 15 per cent for wholesalers and 35 per cent for retailers, said AIOCD general secretary.