Price cap sounds death knell for pharma units in Tamil Nadu?
TIRUPPUR: The State government’s cap on the prices of masks, PPE kits, pulse oximeters and other ‘essential’ items has greatly reduced the profits of small medical units and large-scale manufacturers.
“These items have become household products, and while people from poor backgrounds are very price conscious, many others believe that the higher the cost, the better the quality. So we sell our products accordingly,” says a pharmacist from Tiruppur.
“Three-ply masks are usually sold in bundles - 100 for Rs 100. This brings the cost down to just Rs 1 per piece, which is less than the government-prescribed limit. Similarly, 100 ml of sanitiser is sold at Rs 50,” the pharmacist adds.
“But some customers ask for more expensive products, such as N95 masks. Since money is not an issue for them, we sell them our pending stock.”
In Salem, sanitiser and N95 masks have become more affordable this month. While N95 masks used to cost more than Rs 100, they are now being sold for Rs 30 - Rs 8 more than the government-fixed price. Sanitizer (50 ml) is being sold at Rs 30 against the government-fixed rate of Rs 27.50. PPE kits are being sold at Rs 273, the rate fixed by the State government.
“Sanitizer and N95 masks are not being sold at the prescribed rates because we are now selling our old stock, which we ordered when the prices were higher. Once this stock has been cleared, we will sell all essential items at the prescribed rates,” says an employee at a pharmacy in Salem.
In Dharmapuri, a pharmacist says PPE kits are being sold at the government-prescribed rate. “Even we buy all these essential products at revised rates now, and are able to sell them as per the guidelines. For example, we now buy N95 masks at Rs 20 a piece, and sell them at Rs 22. There’s not much profit,” explains the pharmacist, Surendaran. But the situation isn’t the same at roadside shops. “I bought these N95 masks at Rs 30 a piece, and can’t afford to sell them at anything less than Rs 25. Once this stock is sold, I will buy cheaper masks,” says a roadside vendor.
Indian Medical Association (IMA-TN) president Dr CN Raja welcomed the government’s decision to cap prices, saying, “N95 masks cost about Rs 250 a piece in March-April 2020, and fingertip pulse oximeters were priced at Rs 1,800-2,500... The present prices are apt as there is massive domestic production.”
However, retail pharmacists aren’t so happy. Tamil Nadu Pharmacist and Druggist Association general secretary KK Selvan said, “The government has fixed prices unilaterally. This has greatly reduced our profits. The new prices have forced traders and manufacturers to indulge in volume-based trade i.e., profit when more products are sold. For example, pulse oximeters were sold for Rs 2,500, of which retailers got Rs 500. Now the price is Rs 1,500, and retailers get only Rs 200.”
The most affected by the government’s price cap were retailers and distributors who had a large pending stock. “The government should have consulted retail pharmacies before issuing its order. We already had stock worth Rs 30-40 crore, and each pharmacy had 100-300 packets of masks and other goods. Though we bought them at higher prices, we are now being forced to sell them at low rates. Companies and distributors of medical devices are not willing to take their goods back, leaving us in a fix,” says Tamil Nadu Pharmacist and Druggist Association president K Manoharan said.
The manufacturers too are feeling the heat. Ess Tee Exports managing director N Thirukumaran says, “The sudden capping of prices has shrunk profit margins. It costs Rs 2.75-3.25 to make a good quality three-ply mask. But now, it is difficult to sell products at the revised rates. Besides, we don’t buy raw materials every week. We had bought supplies for three-four months at a higher price, and now have to sell products at a lower cost. We request the government to display the price fixation according to the Bureau of Indian Standards (BIS).”
A 34-year-old CEO of a 10-year-old export company in Madurai that manufactures triple-layered surgical masks and surgical gowns says, “The government-fixed price for masks is fine. But the rate for surgical gowns (Rs 65 per piece) is not feasible as the production cost is higher. A good quality surgical gown would cost about Rs 90-Rs 100 since the raw material is bought from Maharashtra, Gujarat and Himachal Pradesh, and the manufacturing cost is also high. Fixing such low prices is likely to give room for sub-standard products. For instance, instead of using fabric of 43 GSM (grams per sq m) thickness, many may use 20-25 GSM fabric to reduce production cost.”
Consumers, meanwhile, have their own complaints. “We welcomed the capping of prices. But not many people were aware of it. Some consumers still buy masks at higher prices. The government must raise awareness,” asserts Palladam Consumer Awareness Movement president KVS Manikumar.
Vax camps for those affected by leprosy
Chennai: Health Minister Ma Subramanian inaugurated Covid-19 vaccination camp for leprosy affected people in Perungudi on Sunday. Speaking to the press after launching the camp, the minister said there are 11,490 people affected with leprosy in Tamil Nadu, among them 1,324 are in Chennai. All these people will be identified and vaccinated. The camps will be conducted in their residential areas.
(With inputs from Madurai, Salem and Dharmapuri)