Trade averts shortage of essential drugs

Wholesalers and retailers decide to stock up those medicines whose prices have been reduced by the DPCO

Wholesalers and retailers nationwide have decided to stock up those medicines whose prices have been reduced by the Drug Price Control Order (DPCO) 2013.

With the DPCO order threatening to trigger shortage of essential medicines, the move comes as a big relief.

The reduced price saw margins come down for the wholesalers and stockists, and several of them significantly cut their stocks of several medicines on the National List of Essential Medicines (NLEM), including prescription drugs such as cardiac drugs, anti-biotics and pain-killers owing to lower margins on them.

The DPCO came into effect end-July, and notified ceiling prices of over 150 essential drugs out of 348 NLEM that have been brought under it.

“It was decided late on Thursday to stock medicines from manufacturers irrespective of the lower margins for us,” J. S. Shinde, President, All India Organization of Chemists and Druggists (AIOCD), a body representing more than seven lakh pharmaceutical wholesalers and retailers, told The Hindu, adding that it had conveyed to all members to comply.

Mr. Shinde said the impact on retailer’s margins due to reduction in retail price and ceiling price, was 5-6 per cent. “At the wholesale level, the impact was around 2 per cent and at retail level around 4 per cent”.

Every year, the pre-monsoon to post-monsoon period (May to September) sees a spurt in viral infections, which, according to Mr. Shinde, is thrice the level of infections in any other time of the year.

Daara Patel, Secretary-General, Indian Drug Manufacturers’ Association (IDMA), said there would not be any shortage of medicines owing to the lower margins to the trade. “The pharmaceutical industry will take a hit of around Rs.2,000 crore under the new DPCO. But the Drug Controller is fully aware of the situation,and has even given time to manufacturers to comply with the need for new labelling on packaging. Even the Excise Department issued a circular clarifying calculation of new excise duty”.

Mr. Shinde said the NLEM will see trade lose around Rs.2,600 crore per annum adding that the DPCO impacted 22 per cent of the Rs.70,000-crore Indian pharmaceutical sector.