What would be the Trade Margin Under New Pharma Policy?

New Pharma Policy is hot issue in pharmaceutical sector now days. There are many rumours circulating in industry about new pharma policy. Some may be true and some may be false. Most concern rumours are Banning of Contract and Loan License manufacturing, Fixing of Trade margins and removing brand name from single salt preparations. In this article, we are going to discuss about trade margin fixation. If trade margin has fixed then what could be it.

Here we are taking the reference of Draft National Pharmaceutical Policy, 2006. Trade margin is complex phenomena and has been the subject of intense debate from time to time. Everyone has own views in this matter. If government fix trade margin then there is maximum possibility, it would be as described below:

Fixation of Trade Margins in Pharmaceutical Sector:

In case Trade Margin is to fixed then the trade margins for different drugs would be:

Drugs under price control (DPCO):

For Both Branded and Generics Drugs
Wholesaler Margin: 8%  Retailer Margin: 16%

For Other Drugs(Not under Price control):

For Branded and Branded generics Wholesaler Margin: 10%  Retailer Margin: 20 %.
For Generics  Wholesaler Margin: 15%  Retailer Margin: 35%

All margins would be calculated on the MRP of drug or trade rate.

Related Article: New Pharma Policy: Would Third Party/Contract Manufacturing be Banned?