Margin of generic medicines fixed at 35 pc in retail

New Delhi, Aug 17 (UNI) The government has decided to cap the margin of generic and branded generic drugs sold in retail at 35 per cent and in wholesale at 15 per cent along with a ten-year exemption from price-control to those medicines developed from the research molecules by domestic units.

After a marathon discussion with the captains of four major drug groups, Chemical and Fertilizers Minister Ram Vilas Paswan announced that these restrictions would be officially notified under the Drug Prices Control Order(DPCO) of 1995 within a week, though they would be applicable from October 2. Earlier the margin of medicines were too high at 500 to 1000 times.

The Ministry, however, agreed to consider sympethetically the industry demand for exemption from price control the medicines with unit price upto Rs 3.

The excise exemption limit for small scale industry has also been raised from Rs one crore to Rs five crore.

The 25,000 crore drug industry leaders said they had agreed to cooperate with the government hoping that it would be industry to grow to Rs 90,000 crore by 2010 entailing an anticipated investment of Rs 20,000 crore during the period.

The Minister hoped that restricting of margins would lead to the reduction in prices of medicines by 60 per cent.

Besides, the government would form a Cancer Medicine Fund of Rs 200 crore to privide free medicines to the Below Poverty Line people suffering from cancer.

However, the Above Poverty Line category cancer patients will get 50 per cent concession on such medicines.

A 14 - member High-powered Committee has been set up with 11 members from the industry and three from the government including Chemical Department Secretary to thrash out issues like Public-Private participation, competition to replace the cost factor, monitoring, Industry and ministry relations and interpretation of Supreme court verdict of 2003 regarding the fixing of drug prices.

The Committee will submit its report by the end of September.

At present, 74 bulk drugs are under government control alongwith a list of 354 formulations declared essential by the Health Ministry in persuance of the Supreme Court directions.

On the other hand, the industry has maintained that price rise in the generic and branded generic drugs was only two per cent less than the inflation rate during the current year which do not warrant imposing of any price restriction.

With Indian drug exports at around 4000 million US dollars in 2005, the expenditure on R and D was around Rs 1500 crore.

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