Government plans rationalization of trade margins for widely used drugs | India News

NEW DELHI: In order to bring down the prices of all widely used drugs, the government plans to fix the trade margins of drugs of specific therapeutic categories and classes of drugs such as anti-infectives, and those used to treat cancer and chronic kidney disease, top official sources said.
The margins made by wholesalers, distributors and retailers will be gradually capped. The Department of Pharmaceuticals and the National Medicines Price Regulatory Authority (NPPA) are finalizing a proposal in this regard following consultations with the Prime Minister’s Office (PMO) and multiple stakeholders.
The mark-up is the difference between the price at which a manufacturer sells the device or product to a distributor or reseller and the price paid by the end consumer (MRP).
While the prices of more than 355 drug formulations that are part of the national essential drugs list are capped directly by the government, the idea behind the rationalization of marketing margins is to put under the scanner other drugs that do not are not part of the NLEM but are commonly used and are expensive, contributing substantially to health care costs.
“It is necessary to maintain the required balance between the interests of patients, manufacturers, innovators and the distribution supply chain. Our goal is to make medicines affordable for patients, while ensuring that they remain viable for other stakeholders,” a senior official said.
In February 2019, the NPPA capped the marketing margins of 41 cancer drugs up to 30% on a pilot basis. This was done using extraordinary powers under the Medicines Price Control Ordinance (DPCO) in the public interest. In addition, he also set the prices for coronary stents and knee implants.
During Covid-19, the government capped the trade margins of several commonly used medical devices such as pulse oximeter, glucometer, oxygen concentrators and digital thermometer. This has lowered prices for most brands by up to 89%, according to the 2022 economic study.
The NPPA is currently conducting an in-depth study to assess the impact of trade margin rationalization on these drugs and other pharmaceutical products. The results of the study will be evaluated before reaching a final decision, the official said.

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