The SME Pharma Industries Confederation (SPIC), an association of
thousands of small pharma units spread across the country, has urged the
government to bring in a legislation to put a blanket cap on profit
margins of all medicines irrespective of whether they are under DPCO or
not as a measure for making available quality medicines at affordable
prices.

In a letter written to Prime Minister Dr Manmohan Singh,
and chairman and members of the parliament standing committee on health,
SPIC chairman Rohan Hede said that all medicines produced in India
should carry MRP (maximum retail price) with 300 per cent Maximum
Allowable Post-manufacturing Expense (MAPE), which can easily be worked
out by the National Pharmaceutical Pricing Authority (NPPA). This will
slash medicine prices to 40 per cent, and will cease to make India the
most lucrative 'mandi' for MNCs and also save the SMEs who are the only
willing partners in price control.

Blaming the government's wrong
policies for the price rise in medicines, SPIC said that prices of
medicines have been allowed to skyrocket despite over production and a
prevalent glut situation. Millions of traders are sourcing their brands
from excise free zones at MRP of choice which has spurred bribing of
doctors.

Implementing a Uniform Code of Marketing Practices
(UCMP) to refrain companies alone is meaningless. Prime Ministerial
intervention in 2006 to get excise levied on contract manufacturing in
excise free zones to stem the rot did not succeed. The Drug Price
Control Order, which covers less than 10 per cent of market, is an
abject failure because one company alone is 75 per cent violator but
goes scotfree having received stay order from Supreme Court. Out of a
total of Rs.2000 crore of overcharging, only around Rs.300 crore could be recovered by the government, SPIC said.

Asking
the government to save the SMEs for providing competitive price to
medicines, SPIC said that last five years have witnessed many changes in
laws and policy for pharma industry which coincides with relaxation in
FDI norms. Each change has targeted Small and Medium Enterprises (SMEs)
for elimination for their sin of providing competitiveness to big
industry/Multi-National Corporations (MNCs).

It cannot be
overlooked that SMEs came into existence when FDI norms were tightened
in 1960. Medicines in India cost highest in the world till then and
shortages were common. Removal of shortages and providing lowest priced
medicines, not only for local market but for the whole world, can be
safely attributed to Indian pharma SMEs. Changes like Schedule M and
Schedule L of the Drugs Act by health ministry, levy of MRP excise by
finance ministry and minimum turnover clause stipulation in tenders has
made SMEs to either close down or struggle for survival, it said.