Pharma stockists pocket up to 1,800% margin on medicines
Parliamentary report exposes massive disparity between procurement costs and retail prices for common medicines, prompting calls for urgent legislative intervention
Hyderabad: Stockists across the pharmaceutical sector are reportedly pocketing exorbitant trade margins on essential medicines, ranging from 600 per cent to a staggering 1,800 per cent. This massive price gap is placing an immense financial burden on the common man for drugs used to treat everyday ailments such as allergies and the common cold.
A recent report titled ‘Cost of Medicines in India’, submitted by a Parliamentary Standing Committee, highlighted the alarming discrepancies between the Price to Stockist (PTS) and the Maximum Retail Price (MRP). For instance, the allergy tablet Cetirizine has an MRP of Rs 21.60, yet its PTS is a mere Rs 1.85, representing a mark-up of 1,038 per cent. Similarly, Esomeprazole carries an MRP of Rs 180.50 against a PTS of Rs 25, a margin of 622 per cent. The highest discrepancy was noted in Calcium+Vitamin D3 tablets, which see a margin of 1,831 per cent.
The report further noted that even common syrups and cold remedies carry heavy premiums. Alkof LS syrup has an MRP of Rs 118 despite a PTS of Rs 24 (392 per cent margin), while Cheston Cold DS is sold at Rs 79.50 against a procurement cost of Rs 23.35 (240 per cent margin). Citing data from the World Health Organisation (WHO), the report observed that government procurement prices in India remain among the highest in Southeast Asia.
When questioned, officials explained that while the National Pharmaceutical Pricing Authority (NPPA) controls “scheduled medicines” by fixing a ceiling price (PTR plus a 16 per cent margin), “non-scheduled medicines” remain largely unregulated at the initial price-fixing stage. Currently, the only restriction on non-scheduled drugs is a 10 per cent annual cap on price increases. Officials admitted that the massive variation in prices for the same formulations across different brands is a significant concern.
The Committee has recommended that multinational pharmaceutical companies require stricter oversight. It suggested evolving a mechanism to provide medicines to citizens at the prevailing PTS through the Pradhan Mantri Jan Aushadhi Yojana (PMJAY) network.
Echoing these concerns, IMA Scientific Committee convener Kiran Madhala stated that these massive margins are purely a burden on the public. He urged the government to introduce legislation to curb rising prices and ensure that the benefits of low production costs are passed directly to the consumer.
