Perturbed by reports of shortage of essential medicines on retail shelves after the implementation of new pharma policy, the government has sent out a sharp message to drug companies and trade channels to ensure their availability across the country. Supplies of widely used medicines such as pain relievers paracetamol and diclofenac, treatment for worms albendazole and those used in chronic ailments like cholesterol–lowering drug atorvastatin, diabetes drug metformin and blood pressure drug enalapril have been affected.

The drug pricing regulator, NPPA (National Pharmaceutical Pricing Authority), in a strongly worded communication to pharma companies and distribution channels, has warned that the Essential Commodities Act may be invoked against those who disrupt the supply and distribution of essential medicines.

The supply of certain crucial medicines used in tuberculosis and leprosy treatment and injections oxytocin, metylergometrine and amikacin used in surgeries and deliveries have also been disrupted over the last couple of months, industry sources told TOI (see chart).

The NPPA, citing the Drug Price Control Order (DPCO) 2013, has said in the letter that no drug formulation can be sold to a consumer at a price exceeding the one notified by the government or the one printed on the medicine pack. The government notified in July ceiling prices of certain medicines which are part of the National List of Essential Medicines. Citing Para 28 of the DPCO 2013, the NPPA communication said that no manufacturer can refuse to sell a drug to a distributor while no distributor can withhold the sale of a drug to a consumer planning to purchase the medicine.

Representation from the industry association and reports received indicate that there is a disruption in supplies of key medicines due to withholding sale of certain medicines by stockists and retailers protesting against the trade margins, the letter said.

Since the implementation of the new pharma policy, a tussle has been on between pharma companies and trade channels over margins, with stockists reducing their orders leading to scarcity of widely prescribed medication like painkillers, anti–infectives, cardiac drugs and antibiotics. Supplies of essential medicines have been particularly disrupted in Gujarat, Karnataka, Tamil Nadu, West Bengal and Jharkhand.

Major companies like Cipla, Mankind Pharma, FDC and Torrent have given in to the demand of higher trade margins, hoping to end the stalemate between the industry and chemists. Drug major Cipla and Mankind Pharma increased trade margins – 10% to stockists and 20% to retailers – on the price–controlled basket of drugs, as against the earlier offered 8% and 16%, respectively. Others like Torrent and Eris Lifesciences are doling out a 5% "special discount" on these medicines.

The DPCO 2013 stipulates a trade margin of 16% to retailers while to wholesalers the industry offers a trade margin of 8% on price–controlled drugs, continuing with the earlier practice. For medicines out of price control, trade channels continue to get margins of 10% and 20% as earlier.