Govt probes over-pricing of generic drugs

Consumers are paying 6 to 32 times above retailers8217; purchase price for some generic version of drugs. Some of these are manufactured by...

Consumers are paying 6 to 32 times above retailers8217; purchase price for some generic version of drugs. Some of these are manufactured by reputed companies like Cadila Healthcare, Ranbaxy Laboratories, Wockhardt, Cipla and Lupin Laboratories.

The cases of at least three drugs 8212; Nimesulide, Omeprazole and Cetrizine 8212; have come to the notice of the ministry of chemicals and fertiliser. The government is now trying to rectify the situation. Chemicals and fertilisers minister Ram Vilas Paswan had called a high-level meeting last month with the National Pharmaceutical Pricing Authority NPPA. This was followed by a survey by the Drug Controller, who discovered that the consumer was being overcharged for these three formulations.

Typically, the gap between a retailer8217;s procurement price and the retail price of drugs sold vary between 5-16 per cent. But it is much higher for generic sales, which are sold directly to retailers. Drugs sold as generics maintain a large margin to compete with successful brands, although they have a small market share. Part of the reason is because the initial expenditure of marketing is borne by the branded drug manufacturers.

Responding to our query, a Ranbaxy Laboratories spokesperson said, 8220;The prices are only indicative and are determined on the basis of supply of stocks and the competition. Ranbaxy sells the products to the super distributors and it goes through various channels in the network. Margins are kept for each channel, which again vary on the availability and competition.8221;

The three drugs 8212; Nimesulide, Omeprazole and Cetrizine 8212; where a huge gap between the retailer8217;s procurement price and the retail price, are non-scheduled drugs. These prices are not controlled by the NPPA, as it monitors the price movements of only scheduled drugs. In case of any sharp increases in price, the regulator asks the company to check the rise.

For non-scheduled drugs, the ministry has advised the NPPA to get an affidavit from the manufacturers of controlled bulk drugs that the prices charged by them are in accordance with the norms fixed under the relevant Drug Price Control order DPCO.