Soon, drug makers will have to declare medicine cost price, MRP on labels

Pharma companies feat the move might hit their pricing strategies and put local firms in a disadvantageous position

Pharma companies might soon need to print the 'ex-factory'price of a medicine on the label, along with the maximum retail price, if a proposal by the country's drug regulator goes through.

According to a Livemint report, the Central Drugs Standard Control Organisation (CDSCO), which has made this proposal, has also mentioned that in case of imported drugs, the label will have to carry the 'landed price'.

CDSCO has recommended to the health ministry that Section 96 of the Drugs and Cosmetics Rules be changed to make such information mandatory on drug packaging. 

Section 96 of the Drugs and Cosmetics Rules, 1945, asks for listing of the names of the active ingredients in the drug, the net contents in terms of weights and volumes, etc, mandatorily on the packaging. 

If this rule comes into effect, drug makers would be hard-pressed to minimise the gap between MRP and the manufacturing price of the drugs. This might also jeopardise pricing strategies of pharma companies, putting local firms in a disadvantageous position with respect to global players, according to a Times of India report. Besides, it might lead to consumers not trusting drug firms as they would perceive the difference between the two prices as profit margin.

However, the govt might be working to a plan, considering its decision to shift to a market-driven pricing mechanism on essential drugs from a cost-based one. 

The National Pharmaceutical Pricing Policy, 2012, which mandated the new pricing formula of the price of a drug being an average of the top selling brands, has been challenged in the Supreme Court by an NGO called AIDAN (All India Drug Action Network). The apex court has said that the new formula appears to be 'patchy' and has asked the centre to explain its decision, as reported earlier by IANS.

The prices of certain drugs could jump 17 times due to the new mechanism as "in pharma, it has been documented widely that the most expensive brands have the highest sales", according to an Economic Times report.