State regulators probe pharma price mark-ups, prompting possible TMR policy overhaul

Regulators in three Indian states are gathering evidence on how much manufacturers, distributors and hospitals add to the cost of medicines and medical consumables. Maharashtra's FDA highlighted almost a 1,000% increase in maximum retail prices for some surgical items, leading the Department of Pharmaceuticals and the National Pharmaceutical Pricing Authority to meet with private hospitals and industry groups. The Department of Pharmaceuticals has informed a parliamentary standing committee that it is reviewing a proposal to embed trade margin rationalisation (TMR) into the 2013 Drug Price Control Order.

While the existing rule caps retailer margins at 16% for scheduled essential drugs, most market share lies in non-scheduled products that can rise up to 10% annually. A Supreme Court bench questioned the split between scheduled and non-scheduled medicines, and industry leaders argue that any margin caps should vary by product category. Small- and medium-sized manufacturers warn that a uniform TMR could hurt employment and drug availability in remote areas.