No headway in Centre’s plan to cap drug prices

New Delhi: Prime Minister Narendra Modi’s dream of providing affordable drugs to all seems to have hit the wall. More than a year after the committee of experts recommended the department of pharmaceuticals under the ministry of chemicals and fertilisers to cap trade margins to bring down prices of drugs, there has been no headway.

In a bid to control exhorbitant trade margins and curb fleecing of consumers, a high-level panel had in early 2016 recommended capping the trade margins at 35 per cent on all the drugs with MRP above Rs 50. It also suggested capping the margin at 50 per cent for the drugs priced from Rs 2-20, while also capping trade margins for stents and orthopaedic implants. “The committee’s report is under examination,” Sudhansh Pant, head of the panel and joint secretary in the DoP, told this newspaper. The committee included members from industry bodies, NGOs, National Pharmaceutical Pricing Authority and the Competition Commission of India (CCI).

Significantly, the proposal was supported by the All India Organisation of Chemists and Druggists. “Government said to make healthcare affordable. The committee was formed for this but nothing happened. The decision needs willpower and commitment on the government’s part. Unfortunately both are lacking,” said Kailash Gupta, president, AIOCD.

Trading margin is the margin which wholesalers and retailers earn by selling the medicine. After the new Drug Price Control Order, 2013 came into force, there has been no ceiling. “The chemists and wholesalers are charging margins as high as 150-300 per cent. The prices would have gone down if the report had seen the light of the day,” said a source from the industry, on the condition of anonymity.