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Drugs may soon have to list ex-factory price

LiveMint logoLiveMint 04-10-2017 Teena Thacker

Medicines may soon come labelled with the “landed price” if they are imported, or “ex-factory price” if locally made, along with the maximum retail price, a move that the government claims will bring more transparency in pricing.

The Central Drugs Standard Control Organization (CDSCO) has proposed amending Rule 96 of the Drugs and Cosmetics Act to make such pricing information mandatory for all drug makers, according to government officials in the know. Rule 96 deals with labelling of drugs.

The ministry of health and family welfare will soon come out with a draft notification to this effect, according to a government official who declined to be named. “The idea is to give benefit to the consumer by cutting down the profit margin as far as possible. Once the manufacturers start labelling both the ex-factory price and the MRP, the consumers will know the profit margins and will be able to make wise decisions. This will also bring in proper competition in the market among manufacturers and, hence, will result in bringing accessibility of drugs at affordable prices,” said the official.

The existing Rule 96 mandates the minimum information which needs to be put on all packages of medicines other than Indian Systems of Medicines (ayurveda, siddha and unani). According to the existing rule, only the MRP, inclusive of all taxes, is stamped along with the trade name as well as the proper name of the medicine and net contents in terms of weight, measure, volume, etc. The contents of active ingredients are also provided in the prescribed format.

While the label bears the name and address of the manufacturer and the address of the premises where the drug has been manufactured, it could also carry the batch number, date of manufacture, as well as the drug permit number under which it is made in India.

According to an industry executive, the move could set off a turf war between the health ministry and the National Pharmaceuticals Pricing Authority (NPPA), the regulatory body that controls prices of pharmaceutical drugs. The proposal is far-fetched, said Rajiv Nath, forum coordinator, Association of Indian Medical Device Industry (AiMeD). “With every transaction, the import price will keep on changing and hence the act of putting in landed price will unnecessarily make the process complex,” Nath said.

“We had proposed that the government consider putting a price cap of 3-4 times the import landed price and for the ones not notified as drugs it may consider bringing in tax-based disincentives so that manufacturers and importers are discouraged from printing excessive MRP on product labels. At present neither the manufacturer nor the importer is paying anything from his pocket. They just print MRP in the hope of pushing competitor products off the shelf, leading to artificial inflation and consumers suffering”.

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