[india-drug] Re: Generic drugs(6)

["veerubhotla bhava" <pharmedtradenews@lycos.com>]

Respected munish ahuja,

The situation in india is not created by trade but by industry. Way back 20 years, India has acheived a dubious distinction - of having established the largest formulation capacity in India. As plant capacities enlarged, companies decided to keep them afloat operating on thin margins. The availability of huge loans compared to a decade back from '93 saw the big companies interested in this market. The market is still not driven by demand and supply but distribution strength, inventory management and ability to purchase bulk drugs in vast quantity. The first and foremost thing for any company is to rotate the capital invested at least 12 times at barely 3-4% net profit margin. In 1998, govt tried to intervene by slapping excise duty on mrp of product instead of company rate to distributor. Currently the govt is allowing import of bulk drugs and intermediates without proper testing through SEZ. This is creating more problems. Except a handful cos hardly anybody thinks about quality. Our greedy doctors in rural areas and nursing homes in semi urban areas are major patrons of these so called branded generics. If the honble minister has really got any real concern he will immediately slap on all pharma products 16% excise duty on all products based on mrp, which tackles the huge profit margins in this class of products.

REGARDS,
BHAVA NARAYANA
EDITOR PHARMED TRADE NEWS