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AIOCD seeks 10% trade margin for wholesalers & 20% for retailers

Laxmi Yadav, Mumbai
Friday, May 27, 2022, 08:00 Hrs  [IST]

The All India Organisation of Chemists and Druggists (AIOCD), a representative body of 9.4 lakh chemists across the country, has urged the National Pharmaceutical Pricing Authority (NPPA) to allow 10 per cent trade margin for wholesalers on price to retailer (PTR) and 20 per cent for retailers on maximum retail price (MRP) of drugs.

AIOCD made the appeal following a virtual meeting of stakeholders on Rational Trade Margin (RTM) held by NPPA last week to slash the drug price. At the meet, stakeholders were asked to submit their suggestions.

The meeting was attended by representatives from AIOCD, Indian Drug Manufacturers Association (IDMA) and Indian Pharmaceutical Alliance (IP Alliance), Federation of Pharma Entrepreneurs (FOPE), Organisation of Pharmaceutical Producers of India (OPPI), and All India Drug Action Network (AIDAN), among others.
Expressing concern over ambiguity in ceiling price formula in DPCO 2013 leading to controversies, the trade body has appealed to the government to introduce an amendment to DPCO to remove the confusion.
Appreciating the NPPA's 42 cancer drugs’ price capping formula, AIOCD demanded a similar formula for capping scheduled and non-scheduled drug prices.

The trade body has also appealed to the government to clearly define generic drugs and fix the trade margin of 15 per cent to wholesalers and 35 per cent to retailers on MRP of generic drugs.
AIOCD general secretary Rajiv Singhal said “Rational trade margin also comprises stockist’s margin but definition of authorized stockist has been diluted in DPCO. We have demanded a reintroduction of the definition of authorized stockist.”
Singhal further said “Unethical competition posed by big corporations by offering discounts beyond margin limit is posing threat to the existence of small pharmacies. Government needs to take steps to curb such practices as drug prices are regulated and a certain professional standard is expected, which comes with cost. Rational margin provides the cost. Otherwise, this disruption will lead to limited availability of drugs at nook and corners of the country.”
Earlier the department of pharmaceuticals (DoP) had forwarded a slew of measures to rationalise the trade margins on drugs to Niti Aayog. One of the measures was to reduce trade margins to 43 per cent on non-scheduled medicines. Another measure was to cap trade margin on all formulations and dosages at 100 per cent.
The DoP had further suggested that drugs priced Rs. 2-5 a unit should be exempted from trade margin rationalization.


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