[india-drug] NPPA to look into the difference in bulk and retail prices (1)

["Reji K Joseph" <rejikjoseph@gmail.com>]

NPPA to look into the difference in bulk and retail prices (1)
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This news has come in Economic Times
*Variation in bulk, retail prices to nail pharma companies*
makers who participate in large volume procurement contracts of government
agencies like the Army, Railways and state governments will soon face tough
questions from the drug price regulator.

NPPA has started working with the agencies to find out the difference
between their procurement price and the retail price that companies charge
on the same brand. The move has been initiated after some state governments
told the Centre there is a huge difference between the two. The regulator is
soon expected to ask companies to explain this. According to the data
submitted by state governments, the difference is 59 times in the case of
certain products like anti-anxiety drug Alprazolam. A large part of the
difference goes to the chemist as margin.

Some of the other drugs where the difference is substantial are anti-anxiety
drug Diazepam Tablet 5 mg, Folic acid (vitamin), anti-hypertensives such as
Amlodipine Tablet 2.5 mg, Propranolol 40 mg, and Atenolol 50 mg,
pain-reliever Diclofenac Sodium 50 mg and Vitamin B Complex Tablet.

The difference between their procurement price and the retail price range
from 19% to 59%, according to official data. The data compiled by state
governments has used the prices at which Tamil Nadu Medical Services Corp
(TNMSC) procures medicines through open tender and the data provided by
Monthly Index of Medicine Specialities (MIMS) India, a journal that gives
information on prescription drugs.

The regulator is also concerned about the huge difference in the prices of
different brands of the same medicine. In some cases it is more than 20
times. NPPA is now examining examples referred to it by the state
governments.

This includes 16 brands of Amikacin 500 mg injection used to treat serious
bacterial infection, sold by leading drug makers such as Alembic, Cadila,
Cipla, Ind-Swift, Nicholas Piramal, Unichem, Wockhardt, Ranbaxy, German
Remedies, Aurobindo Alkem and Biochem. For a few other cases like
Nimesulide, Omeprazol and Cetrizine, the regulator has already recommended
that the government should impose price control. A decision is awaited. The
amount that companies owe the government by way of 'excess charges' paid by
the consumer, has now gone up from Rs 300 crore a few years ago to Rs 1,400
crore which includes a 15% interest, it is understood.

Reji K Joseph

"Reji K Joseph" <rejikjoseph@gmail.com>