Close on the heels of the Mumbai-based Blue Cross Laboratories Ltd, another Mumbai-based pharma company Franco-Indian Pharmaceuticals Pvt Ltd has also accepted the demand of the All India Organisation of Chemists and Druggists (AIOCD) to offer more trade margins than that allowed in the DPCO 2013 to stockists and retailers.

As per DPCO 2013, the retailers’ margin for all the scheduled (controlled category) products is 16 per cent on price, inclusive of excise duty. Earlier this was on MRP excluding VAT and excise duty. The stockist margin on controlled products was eight per cent excluding excise duty. The new price control order has reduced the net margins for retailers and wholesalers by four and two per cent respectively which the trade feels will not be commercially viable for them.

As per the circular issued by Franco-Indian Pharmaceuticals Ltd, the company would continue to give margins of 10 per cent and 20 per cent to wholesalers and retailers respectively on the three products manufactured and marketed by them. The three products have come under the scheduled category subsequent to the National List of Essential Medicines (NLEM) List declared by the Government.

The circular dated August 05, 2013 states that the three products namely Atheart - 10, Glyciphage - 500 mg and Surfaz - O 150 mg have come under the NLEM list for which government has fixed ceiling prices. Ceiling price on existing stocks of Atheart - 10 and Glyciphage - 500 mg has come into effect from August 5, 2013 and on Surfaz - O 150 mg has come into effect from August 19, 2013 based on the dates of respective notification.

In the circular, it has been specified that MRP for Atheart - 10 and Glyciphage - 500 mg is already lower than the ceiling price declared by the government and hence there is no change in the MRP at present. However, the MRP of tablet Surfaz - O 150 mg has been revised downward to Rs.15.17 per unit from the earlier MRP of Rs.24.17. All C&F's have been advised to issue credit notes immediately after receipt of stocks having MRP of Rs.24.17 and send stocks of revised MRP of Rs.15.17 per unit. Unsold stocks at chemist point also should be collected and returned to the company for complying with the revision in MRP on packs.

Franco-Indian Pharmaceuticals is the second company which has accepted the demand to offer trade margins higher than that allowed in DPCO 2013 to stockists and retailers. Blue Cross Laboratories Ltd was the first to give higher margins to retailers and stockists as a pro-trade progressive policy.

Meanwhile, AIOCD will approach more companies in this regard very soon. “AIOCD is in the process of approaching other companies with similar demand like Alkem Laboratories, Sun Pharma, Lupin Ltd., Zydus Cadila, USV Ltd., Cadila Pharmaceuticals Ltd. and Torrent Pharmaceuticals Limited,” informed Suresh Gupta, general secretary, AIOCD.