The Hindu Business Line : Drugs in excise-free zones costlier

The next time you buy a strip of tablets, it might be well worth your while to check where the product has been manufactured. For it has been found that the prices of certain drugs manufactured in the excise-free zones of Himachal Pradesh, Uttranchal and others are higher than those manufactured in non-exempt States.

Recently, the Department of Chemicals and Petrochemicals had asked the National Institute of Pharmaceutical Education and Research (NIPER) to investigate the reasons for the disparity in pricing. A top Government source said, "It was believed that manufacturing in excise exempt zones would result in bringing down the prices. But this has not happened. NIPER has collected some data that points out that there is a situation where prices of drugs manufactured in excise-exempt zones are higher."

The Department would now examine the report and take suitable controlling measures.

Interestingly, the MRP of the some of the life saving drugs are 100 to 200 per cent higher than the ceiling price fixed under the Drug Price Control Order (DPCO). Last January, the Finance Ministry implemented the MRP-based excise regime for drugs to end evaluation disputes and generate more revenues.

For instance, a strip of 10 tablets of Norfloxacin-400 mg (prescribed for meningitis, typhoid) manufactured in Delhi bears an MRP of Rs 17.50, while the same medicine manufactured in Solan (Himachal Pradesh) is priced at Rs 46. 63. The DPCO for this drug is Rs 8.96 plus excise duty. Similarly, a pack of 10 tablets of Atorvastatin-20 mg (a cholesterol lowering drug) manufactured in Goa is priced at Rs 46 while the same drug manufactured in Solan is priced at Rs 140.

In the last few years several pharma companies such as Sun Pharma, Zydus Cadila, Lupin, Unichem etc have shifted or partly relocated their manufacturing, formulations, processing operations to tax free-districts of Himachal Pradesh, Uttaranchal, Jammu & Kashmir and so on.

The Confederation of Indian Pharmaceutical Industry (CIPI), a body that represents the small-scale industry, has been concerned about the trend of pharmaceutical companies moving to excise-free States. Mr Jagdeep Singh, President, Punjab Drug Manufacturers Association, "Though the Government has implemented MRP-based excise, the shifting of manufacturing activities to excise exempt regions would result in revenue loss for the Government.

"Added to this, the higher price of products manufactured in these regions will adversely affect the common man and erode the capability of the country to provide medicines at the lowest prices."

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