Retail margins on unbranded drugs to be capped at 35%

New Delhi, Nov 18 | Updated: Nov 19 2005, 06:08am hrs
The government is set to cap the trade margins for unbranded drugs at 15% for wholesalers and 35% for retailers. Trade margins for generic drugs are as high as 1,500% of the ex-factory price.

Addressing the Economic Editors Conference, chemicals and fertilisers Ram Vilas Paswan said on Friday that local taxes would also be included in the maximum retail price of drugs.

FE had reported the move to impose trade margin caps on November 3.

The move to impose margins would impact trade, since at present, such ceilings exist only on 74 drugs whose prices are controlled by the government. For these drugs, trade margins are capped at 8% and 16% for retailers and wholesalers, respectively. The Drug Price Control Order (DPCO) would be amended within a month to allow for these changes as part of a comprehensive revision of the pricing policy, the minister said.