NEW DELHI: A government move to fix trade margins of 42 anti-cancer drugs at 30 per cent earlier this month has failed to make an impact, an independent analysis by a patient rights group has shown.
The detailed dissection of the price chain shows that crucial life-saving drugs are still unaffordable to a large number of patients due to profiteering by pharma companies, as the National Pharmaceutical Pricing Authority adopted a “flawed” formula suggested by a standing committee under Niti Aayog.
The analysis by the All India Drug Action Network, showed that the 30 % margin on the Retail Price is actually equivalent to a 42.8 % markup from the Price to Stockist (PTS).
“This methodology is a radical departure from the existing practices of providing margins in the Drug Price Control Order, which is to the detriment of consumers who would not get the full benefit of the 30 % cap,” the analysis said.
A 42.8 % markup provides excessively high margins to the trade. Moreover, the profit margins of manufacturers of these medicines continue to be uncontrolled and opaque, the scrutiny noted.
It highlighted that the formula does not disturb the margins of companies before the medicines reach the stockist.
“This is a particularly glaring exclusion when it comes to the high margins of companies/entities importing drugs into India,” the analysis said.
“It is encouraging that NPPA has asked companies to submit data on landed costs and we hope the data would be shared in the public domain and margin capping would be brought to subsume importing entities as well,” a statement issued by AIDAN said.