Drug price order — Gain for patients, pain for retailers
Hyderabad: Some 350 drugs are set to become cheaper in the weeks ahead thanks to the Drug Price Control Order 2013.
The Order mandated reduction of prices of the medicines within 45 days of the notification being issued and that the reduced prices apply to drugs already being sold in the market. Manufacturers were to replace existing stocks with the new price mentioned on labels. The Order officially came into effect from end July.
This move will bring relief to lakhs of patients. But pharma manufacturers and the 7.5 lakh chemists and druggists in the country are unhappy as this order will erode their margins.
The All India Organisation of Chemists and Druggists (AIOCD) says margins of retailers have fallen to 13.75 per cent from 20 per cent. For wholesalers, the margin has dipped to 7.25 per cent from 10 per cent.
According to experts, generic drugs sale, which has been picking up on the huge price difference with branded medicines, could dip in some cases with the gap narrowing following the Order. “Our margins have reduced to 8-10 per cent. So, there will be no discounts,” read a notice at drug retail chain Apollo Pharma across all its outlets in the country.
A. Rambabu, a drug retailer here, said the complete availability of all notified drugs might take a longer time. “As of now, a little over 10 drugs are available with new labels,’’ he said.
Drug-makers, however, see a transition period before customers can get the full benefit of the Order. “There is no clarity on the scenario on the retail front. We will be sticking to the newly-notified prices. But some retailers might sell at the old prices if the stocks of drugs of different companies exist,’’ said P. Bhaskara Narayana, Chief Financial Officer, Natco Pharma.
Pharma major Dr Reddy’s Laboratories hinted that the new pricing policy could impact the company’s revenue by 3-5 per cent.
The AIOCD has called for an emergency meeting in Mumbai on September 4 to discuss the issue “We have invited representatives from all the States to discuss the single point agenda of margins. Manufacturers are getting margins up to 300 per cent. They should at least part 6 per cent with us,” Suresh Gupta, AICOD General Secretary, told Business Line over phone from Delhi.
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