The Bangalore District Chemists and Druggists Association (BDCDA) has categorically stated that GlaxoSmithKline Pharmaceuticals (GSK) has violated Drug Price Control Order (DPCO) - 2013 by not providing margins calculated and fixed as per the working sheet of the National Pharmaceutical Pricing Association (NPPA) on the National List of Essential Medicines (NLEM). The Association is now insisting that GSK should reconsider the 20 per cent and 10 per cent margins to the retailers and wholesalers immediately.

The BDCDA has pointed out that in the case of a strip of six tablets of Augmentine 625 mg, the MRP inclusive of tax is Rs.141.50 with a VAT of 5.5 per cent. But under the NLEM the retail price is Rs.134.13 and price to retailer is Rs.115.62. Now the margin provided in the DPCO is 18.60 per cent. But the margin provided by GSK is only 18.50 per cent. For the Augmentine injection, the margin provided in DPCO is 17.57 and again GSK has faltered giving 11 paise lower. The drug eltroxin too, DPCO margin is 15 per cent but the GSK is giving 14 indicating a difference of 10 paise again. Now for every strip of this drug alone, with a 10 paise difference is a violation of the DPCO 2013 and would lead to a major losses for the chemists, stated the Association to GSK.

“We have communicated in a letter, BDCDA 1704/13, to the GSK supply chain management department, to provide the markings for some of the products moved from the scheduled category to the non scheduled category providing 20 per cent and 10 per cent margins to retailers and wholesalers respectively. This should be with exclusive of excise duty and value added tax (VAT),” V Hari Krishnan, president, BDCDA told Pharmabiz.

The company has also recently increased the prices of drugs which cover Ventorlin capsules, 4mg, 8 ng, syrup, expectorant, inhaler, Becadexamine, capsules, Zevit capsules, Celin tablets, which are not covered under the DPCO 2013 but came under the ambit of the DPCO 1995. The order is that the company should provide the related margins, he added.

The company should not ignore the inclusion of excise duty as the calculation of price as per the DPCO 2013 notification and National Pharmaceutical Pricing Association (NPPA) order, pointed out Krishnan.

As per the DPCO 2013, a 16 per cent margin is provided to the retailers on the base price and not retail price which amounts to 13.8 per cent whereas the process on products are fixed on market based prices and brand has been defined that identifies one seller’s dug as distinct from those of others. We have, therefore,requested to provide 20 per cent margins to retailers on retail price.

Now the BDCDA is investing on all NLEM products even though our net profit amounts to loss because of the concern of the NPPA on the availability of essential medicines vide their letter F.No. 15 (3)/2013-Div.-III/NPPA dated September 13, 2013. Therefore, we request you to reconsider granting the 20 per cent retail and 10 per cent wholesaler margins immediately.