[www.keralites.net] DAY LIGHT ROBBERY BY OUR PHARMACISTS

 

HUGE PROFIT MARGIN FOR OUR PHARMACISTS

Pharmaceutical companies are luring drugstores with discounts, but the costs passed on to customers 

Buy two, get one free" is a common promotional technique used by marketers to up product sales. But have you ever-heard of "Buy one, get nine free"? 

Hold on! Such sops are not for the common man. These are being rained on neighbourhood drugstores by marketing executives of pharmaceutical companies to push sales of certain tablets and injections; the lure being high profit margins — which means the customer pays through his nose to foot inflated bills. 

Coming at a time when ordinary citizens find it difficult to foot high medicine bills, the trend of companies offering deep discounts (sometimes even providing medicines free) to neighbourhood drugstore owners, who then sell at high margins to the common man, is becoming rampant. 

Bangalore Mirror got an insight into the margins business in pharma trade by accessing a letter written by a city-based former wholesale pharmacist to the prime minister. "Many drugs that are crucial in saving lives and alleviating illnesses are being sold at competitive discounted rates to retailers in a bid to drive sales. (But) the medicines are sold at very high costs to the customers," said Om Prakash Agarwal, who decided to expose the unholy marketing practice in the pharma trade. 

Agarwal, who hails from Ranchi but moved to Bengaluru recently, has written a letter to PM Narendra Modi seeking regulations on the same. Agarwal says, "The whole chain starts with the pharmaceutical companies selling drugs under the trade offer to the wholesaler. For example, according to the trade offer by a popular pharmaceutical company, eight strips of tablets that are crucial to maintain the progesterone hormone level in women in the first trimester of pregnancy is given free with eight strips. The pharmaceutical company charges the wholesaler only for the eight strips at an approximate cost of Rs.145 per strip along with VAT charges. 

The wholesaler will sell it to the retailer with a margin of less than 10 per cent. But when the same is sold to the end consumer — either by a doctor or a retail pharmacist — it is billed for 16 strips at a cost of Rs.450 per strip. Those tablets that are given (to retailers) free also are sold at the MRP." 

Agarwal says, "The MRP of an Aminoglycoside antibiotic, which is one of the most regularly used antibiotics for treating bacterial infections, is Rs.80 per vial; but it is usually valued at Rs.21-22 per vial. The MRP value of an IV (intravenous) set used to administer intravenous medicines is in the range of Rs.25 apiece, but is actually valued at Rs.6 per piece. Another antibiotic used to control dysentery and diarrhoea is priced at Rs.105 per bottle, but is valued at Rs.50 per bottle." 

The wholesalers admit that this is the biggest ongoing racket which cannot be regulated. But how far are they benefiting from it? The Karnataka Wholesalers Association says, "The margin given to the wholesalers is between 9.2-9.7 per cent. We are not allowed to extend this margin. We are allowed to charge VAT only if the manufacturer charges us VAT." 

So many whistle-blowers have time and again demanded constituting a committee to look into the pricing of the medicines and specifically in the market based pricing formula. The SC verdict this year had termed the drug pricing policy as irrational. Following this, there were several recommendations to look into the drug pricing of companies following several complaints that many drug companies were making significant profits. 

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