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LATEST NEWS UPDATES | In India, What Explains Distribution Margins and Drug Prices Being Linked? -Murali Neelakantan and Ashish Kulkarni

In India, What Explains Distribution Margins and Drug Prices Being Linked? -Murali Neelakantan and Ashish Kulkarni

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published Published on Jun 9, 2022   modified Modified on Jun 14, 2022

-TheWire.in

A Tata Nano pays the same toll to go from Mumbai and Pune on the expressway as does a Rolls Royce. Why should pharmaceutical products be any different?

On May 26, amid news reports about yet another closed-door meeting that the National Pharmaceutical Pricing Authority (NPPA) had had with unspecified stakeholders, we were reminded of an interesting press release that the Ministry of Chemicals and Fertilisers had issued in July 2021.

The release said that the government had invoked paragraph 19 of the Drug Price Control Order (DPCO) and capped the trade margin for drugs and medical equipment related to the treatment of COVID-19 at a stunningly high 70% of MRP. The release added that the government had instituted a similar cap on cancer related drugs in 2019.

(The trade margin is the difference between the manufacturers’ price billed to trade and the MRP.)

On the face of it, these decisions seem like welcome moves – but they raise certain important questions.

First off, does this really imply that the distribution margins are really that much higher than the manufacturer’s margins? If so, what does this portend for the future health of this sector?

Please click here to read more. 


TheWire.in, 9 June, 2022, https://thewire.in/government/nppa-link-distribution-margins-drug-prices-explanation


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