All India Organisation of Chemists and Druggists (AIOCD) is planning to send a representation to the Ministry of Petrochemicals and Fertilisers giving their suggestions on the proposed new drug pricing policy by November 25. Through this representation the association will be demanding to the government to retain the current margins to the traders in the new drug pricing policy since last three decades.

The Association warned that if the government fails to comply with their demand, they will agitate across the country to advocate their cause that may result in shortage of medicines in the future.


Under the proposed new drug pricing policy, the government has tried to fix and regulate prices of all 348 essential drugs and their combinations which has increased basket of controlled drugs compared to de-controlled drugs.


According to Jagannath Shinde, president, AIOCD, the association has no objection with the new pricing policy, provided that the government ensures that it will not affect the market share and margin of the traders. “All we are demanding is that the government should retain our margin that was allotted to us in the Drug Prices Control Order (DPCO), 1995 so that our industry can survive in this competitive market,” Shinde stressed.


According to the sources, earlier the traders had 85 per cent market in the de-controlled drug segment where the wholesalers enjoyed trade margin of 10 per cent and the retailers had 20 per cent trade margin. However, Shinde pointed out, “Under the proposed drug pricing policy, most of the de-controlled drugs have been moved under the controlled drugs category, which reduces our market share in de-controlled category and gives us only 48 per cent market share in this basket. It is a huge loss to the trade industry as we are estimating over 6 per cent loss of margin to the trade units which approximately comes to loss of Rs.1800 crore to the retailers and the wholesalers in the country which amounts to 7.5 lakh members.”


He said, “The government should realise that if they reduce our margin, it will severely affect our existence leading to shortage of medicines in the market. There is lot expense involved in the drug distribution system, especially, since there is a constant rise in the operational cost, where getting affordable qualified labour is also becoming an increasing burden to the traders while conducting business.”


He added that the association is hopeful that government will seriously ponder on this issue and get into a consensus soon so that shortage of medicines in the future will not effect the public at large.