| The issue of trade margins
of select medicines in the Delhi market which created
quite a furore is minuscule, according to industry sources.
The implementation of the DPCO 2002 as well as introduction
of a uniform tax regime is what the industry would rather
welcome.
Speaking to Express Pharma Pulse, Yogin Majmudar, president
of the Indian Drug Manufacturers' Association (IDMA)
said that as far as the issue of trade margins is concerned,
it affects only a small part of the industry as it is
restricted to a small number of manufacturers. Instead,
the union minister for chemicals and fertilizers and
steel, Ram Vilas Paswan, should be focussing on issues
like bringing the new drug policy into place and ensuring
that the country enters the product patent regime on
time.
The new drug price control order (DPCO) of 2002 which
has not yet been implemented after it got a stay from
the Bangalore High Court currently awaits hearing in
the supreme court. Majmudar was of the opinion that
the minister should make an effort to try to convince
the Supreme Court saying that all aspects have been
covered and ensure that the policy gets implemented.
He added that foreign investments have dried up as investors
are waiting for the decision on the policy as well as
for the introduction of the product patent regime. The
IDMA, meanwhile is trying to collect facts and figures
on this issue.
Regarding the issue of pricing of drugs and trade margins
on the same, the IDMA president was of the view that
there are government mechanisms to keep a check on the
same and such a big clamour was unnecessary. Airing
views on similar grounds was secretary general of the
Indian Pharmaceutical Alliance (IPA), Dilip Shah. He
said that there is a difference in the fundamentals
in the nature of trade and business.
Of the many fundamentals that are there, he spoke of
two wherein he said that in business, the onus is on
the manufacturer to give credit to the trade when the
products are returned. In a generic generic business,
in case of bad debt, it is the distributors' problem.
Shah was of the opinion that as far as this issue is
concerned, a consensus between the NPPA and the industry
is the need of the hour.
The honorary general secretary of the All India Organization
of Chemists and Druggists (AIOCD), Jagannath Shinde
said that the margin is not too high and definitely
not for the retailers. He said that the margin given
to the retailers is as per the Drug Price Control Order
of 1989. Speaking about whether the entire issue has
been worth the heat it has taken considering that the
study was conducted only in Delhi, he said that the
minister had aired his views based on what he was updated
about. He added that this issue has come up because
many generic players are strategising how to survive
post 2005.
The sales of the drugs mentioned account for almost
three to four per cent of the total turnover of the
generic industry which approximately comes to Rs 1600
crore. Therefore, though the magnitude is not too high,
but at the same time, it can not even be ignored because
it does get business for the generics. Shinde opined
that the AIOCD is waiting for the uniform tax regime
and wants to be sure that once implemented, no other
tax would be applicable on pharmaceuticals. Speaking
about the issue of the price of decontrolled drugs,
he said that any authority can never control such prices
because whatever is the case, the manufacturer does
have the upper hand on fixing the price. The manufacturer
will keep the margin and if this issue has to be tackled,
then the government will need to take help from associations
like the AIOCD.
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