Unbranded generic drugs are set to become cheaper with the government and pharmaceutical industry associations agreeing to fix the retailer margin at 35 per cent and wholesaler margin at 15 per cent.
MUMBAI: Unbranded generic drugs are set to become cheaper with the government and pharmaceutical industry associations agreeing to fix the retailer margin at 35 per cent and wholesaler margin at 15 per cent. The new margins will be effective from October 2 and, according to Union Minister for Chemicals and Fertilisers Ram Vilas Paswan, may bring the price of such generics down by 50-60 per cent.
‘Unbranded’ generic drugs are cheaper copies of medicines produced by big pharmaceutical companies. Take, for instance, the antibiotic ciprofloxacin. Ranbaxy has branded this drug as Cifran, while Cipla’s version is called Ciplox. Both companies promote their brands through medical representatives.
But another version of the drug, branded Ciprofloxacin and produced by a pharma firm in Uttaranchal, is sold directly through distributors to medical stores.
Unscrupulous chemists substitute these drugs for what the doctor has prescribed, telling patients that it is the same medicine, only cheaper. The reason? The substitutes bring in greater profits. In pharma parlance, this is called ‘prescription switching’.
Another case is point is the painkiller Nimesulide, the unbranded version of which is produced for 30p a tablet but sold for Rs35 for a strip of 10 — a margin of 1000 per cent.
Amit Hemrajani, who runs Relief Medical Stores in Goregaon East, says the fixing of margins will hit chemists who indulge in prescription switching.
"Chemists do this because margins are many times higher in generics," Hemrajani said. "With the retail margin fixed, the incentive to switch will not be great."
The government is also considering the industry's demand to keep drugs that cost up to Rs3 outside price control. The exemption limit earlier was Rs1.
JS Shinde, general secretary of the All-India Organisation of Chemists and Druggists, which represents more than 5 lakh outlets, told DNA that the association is happy with the decision.
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