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Panel recommends DoP to conduct study on difference between PTS and MRP
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Parliamentary Panel, DoP, Price to Stockist, PTS,
November 17 , 2025
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The Parliamentary Panel on Chemicals and Fertilisers has recommended to the Department of Pharmaceutical (DoP) to conduct a study on the significant difference between the Price to Stockist (PTS) and Maximum Retail Price (MRP) printed on the medicine, and the reasons.
The Department-related Parliamentary Standing Committee on Chemicals and Fertilisers, in a review on the price rise of medicines in the pharmaceutical sector impacting the lives of ordinary citizens adversely, discussed the huge difference between the PTS and the MRP of various drugs including anti-allergy drugs and proton pump inhibitors (PPIs), noted that the Department has not undertaken any study on this.
"The Committee are of the view that by undertaking such a study the difference between the PTS and MRP would be highlighted and reasons for the difference would also emerge besides other benefits to the end consumer by way of reduction in the prices of medicines," said the Panel headed by Member of Parliament Kirti Azad Jha.
"The Committee, therefore, recommend that the Department should initiate a ‘study’ in this regard at the earliest and they be apprised of the findings of the study," it added.
It noted that the PTS of ciprofloxacin 500 mg and tinidazole 600 mg which came to notice of the Committee, is Rs. 450/- but its MRP is Rs. 3,500 hence a whopping difference of Rs. 3,050. Similarly PTS of Ibrufin and Labocof is Rs. 831 and Rs. 316, but their MRP is Rs. 4,560 and Rs. 2,850 respectively hence again a big difference of Rs. 3,729 and Rs. 2,534.
The Panel listed out, in the report, that the brand Cetrest comprising Cetrizine 10 mg has a margin of over 1,038%, Nexom 40 at over 1,119%, Aristocal CT at over 1,831%, Cipcal CT at over 968%, among others.
When the Panel asked response from the DoP on this difference in margin, the Department said that the presently, prices of drugs are regulated as per the provisions of the Drugs (Prices Control) Order 2013 (DPCO, 2013) based on the National Pharmaceuticals Pricing Policy, 2012, and the National Pharmaceutical Pricing Authority (NPPA) fixes the ceiling price of scheduled drugs based on the National List of Essential medicines (NLEM) and the retail prices of new drugs.
Ceiling prices and retail prices are fixed by adding 16% margin to the average of Price to Retailer (PTR) of all brands having market share of equal to or more than 1% appearing in the market database.
Further, supply chain or marketing channels may vary across different drugs and as per the current policy framework the margin at various levels in the supply chain is not regulated and are part of business practices, and are guided by commercial considerations, it added.
For the non-scheduled formulations, NPPA regulates prices as per the provisions of DPCO, 2013 and manufacturers are not allowed to increase the maximum retail price (MRP) of such formulations by more than 10% of MRP during preceding 12 months, although the average annual price increase by such manufacturers of non-scheduled drugs over the five-year period from April 2020 to March 2025 at 5.6%, which is broadly in line with the Wholesale Price Index (WPI) rise of 5.4% over the same period and is significantly lower than the permissible 10% increase.
It also informed the Panel according to a study through leading consulting firm IQVIA, the Indian prices were compared with three other low and middle income countries - Sri Lanka, Bangladesh and Brazil - for top selling dosage forms and the prices of both scheduled and non-scheduled formulations in India were comparatively lower.
It also submitted the response from the Indian Pharmaceutical Alliance (IP Alliance), the industry association of major domestic manufacturers, regarding the company-specific formulations listed by the Panel.
IPA explained the difference between the market channels of branded generics and trade generics, and said that the low-volume sales may translate into trade margins that may be high in percentage terms owing to the fixed costs of distribution over a relatively smaller number of formulation units sold.
In the case of formulations sold through the “branded generics” channel, the manufacturer maintains inventory for uninterrupted supply, along with associated significant inventory carrying costs, and also bears the costs of awareness activities related to these products, while the distribution channel only incurs logistics and distribution point costs. In contrast, in the case of formulations sold through the “trade generics” channel, the distribution channel incurs additionally the cost of carrying inventory and awareness.
Apart from the above additional cost constituents, in the trade generics channel, the distribution channel costs are themselves typically higher than the corresponding costs incurred on formulations that are typically marketed through the branded generics channel, since the costs of logistics, staffing, expired inventory, cold chain, etc. in the trade generics channel are higher as sale volumes are smaller and offtake slower and uncertain and the distribution chain is longer due to this channel being typically adopted for supplies to remote and rural areas, it added.
Besides, unlike in the case of the branded generics channel, where the manufacturer may maintain centralised inventory offering cost advantages accruing from economies of scale, in the case of the “trade generics” channel, there may typically be multiple smaller distributors who would not have the same scale and whose cost of distribution would, therefore, be higher.
These cost related factors significantly impact the percentages for trade margin for formulations marketed through the trade generics channel in two ways. First, the Price to Stockist (PTS) at which the manufacturer sells becomes lower, reducing the denominator on which the percentage is calculated and, secondly, the absolute trade margin becomes higher, raising the numerator in the percentage calculation, it maintained.
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