Give In To Chemists’ Demand | Move May End Shortages

The shortage of essential medicines on retail shelves may be over soon with major companies like Cipla, Mankind Pharma and Torrent deciding to give in to the demand for higher trade margins and hoping to end the stalemate between the industry and chemists.

Drug major Cipla and Mankind Pharma decided on Friday to increase trade margins to 10% for stockists and 20% for retailers on the pricecontrolled basket of drugs, as against the earlier offered 8% and 16% respectively, while others like Torrent and Eris Lifesciences are doling out a 5% "special discount" on these medicines to stockists.

Since the implementation of a new pharma policy in July, a tussle has been on between pharma companies and traders over margins, with stockists reducing their drug orders leading to scarcity of widely–prescribed medication like painkillers, antiinfectives, cardiac drugs and antibiotics.

Supplies of these medicines, which are part of the national list of essential medicines (NLEM), have been particularly disrupted in states like Gujarat, Karnataka, Tamil Nadu, West Bengal and Jharkhand.

While the DPCO 2013 stipulates a trade margin of 16% to retailers, the industry offered wholesalers a trade margin of 8% on price–controlled drugs according to the earlier practice. For those medicines which are out of price control, trade continues to get margins of 10% and 20% as earlier.

When contacted, Subhanu Saxena, MD & global CEO, Cipla, said, "In the last several weeks, our trade partners – stockists & retailers – have been resorting to destocking on account of their protest against the margins offered by companies. We have been receiving complaints from patients about non– availability of a number of life saving drugs manufactured by us. In order to protect the patients’ interests and safety, we have decided to increase the margins to stockists and retailers so that availability of lifesaving drugs is ensured. A number of other companies have already taken this step prior to us."

The three industry associations – Indian Pharmaceutical Alliance, Organisation of Pharmaceutical Producers of India and Indian Drug Manufacturers Association – had in a communication sought the help of state drug regulatory authorities and the drug pricing regulator, saying there may be a potential shortage of essential medicines on account of lower orders placed by distributors.

Supplies of popular medicines like anti–diabetes metformin, painkillers like paracetamol and diclofenac and cholesterol–lowering drug atorvastatin may be affected, industry sources said.