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Confusion prevails in the market-place over the 45-day deadline to revise medicine prices, and this could lead to some shortages, say industry-insiders.
On Monday, the deadline kicks-in on the first list of 151 medicines whose prices were revised as part of the new drug policy and the Drug Price Control Order 2013. But companies face a logistics nightmare, and risk running foul of the excise department, said a pharma industry official. The National Pharmaceutical Pricing Authority wants companies to sport the changed price-labels on its medicines, 45 days from the date the list was notified.
Revenue breather
While it is possible to ensure that all medicines produced after the date of notification bear the new prices, it was not possible to recall stocks already sent to different parts of the country, a company official said.
Caught in a situation involving the Health and Finance arms of the Government, the pharma industry is seeking clarity on implementation of the NPPA’s deadline. On its part, the Health Ministry has given industry a small reprieve, by allowing companies to re-sticker their products with the new prices, as a one-time event. In a regular situation, changing the price label outside the manufacturing location would have been a violation of the law, the industry representative explained.
The industry now looks to the Department of Revenue for its next breather – where companies be allowed to re-sticker existing products at different designated locations. More importantly, industry seeks another 45-day period, from the Revenue Department’s notification on this - to sport the revised prices, the industry representative said, adding that the notification is expected this week. Explaining the additional time request, he said, companies would be breaking excise norms if they changed price labels anywhere outside the manufacturing location. Labels on existing stocks can be changed only after the Revenue Department gives its go-ahead, he added.
After the Health and Finance ministries give companies the green signal to revise to the new ceiling prices, companies will have to pull back existing stocks and re-label them at designated locations.
“Reverse logistics” is both expensive and unwieldly, observes Tapan Ray, of the Organisation of Pharmaceutical Producers of India. But companies with products above the ceiling price will have to go through the process, he said.
Meanwhile, Cipla got some interim relief from the Delhi High Court. It allowed the company to continue with its existing stocks, provided it gave a list of revised prices to the distribution channels.
Revised margins
But in the process of recalling and re-labelling stocks and heavy rains delaying the supply of fresh stocks across the country, medicine shortages would arise, said an industry veteran.
Compounding the problem in states like Tamil Nadu and Kerala, for instance, chemists are also unhappy with their revised trade margins, also outlined by the new drug policy.
There will be shortages, observed J.S.Shinde of the All India Organisation of Chemists and Druggists, as chemists will stop selling existing stocks bearing the old prices, from Monday, till the Government clarifies the situation.
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