Can phased trade margin rationalisation boost pharma growth?

The pharma representatives of the Laghu Udyog Bharati (LUB), an RSS affiliate and a not-forprofit Pan India Organisation with the aim of empowering Micro and Small enterprises in the country since its formation in 1994, on July 24, had a meeting with officials from the Department of Pharmaceuticals, and discussed key issues such as Trade Margin Rationalisation (TMR), Schedule-M extension, Revised PTUS Hurdles, and the Drug Tribunal Board formation. LUB Pharma proposed the innovative "One Nation-One Molecule-One MRP" and advocated for the top 100 companies to sell their generic brands at molecule name and affordable Maximum Retail Price (MRP) for patient benefits. Here we are looking at a series of recommendations from industry associations to make TMR more effective, balanced, and supportive of all stakeholders in the pharmaceutical supply chain.

- Bhagwati Prasad

The pharmaceutical industry has called for a careful and phased implementation of Trade Margin Rationalisation (TMR), urging the government to ensure that the Drug Price Control Order (DPCO) is equipped to meet future challenges while fostering industry growth. Leading industry associations have put forward a series of recommendations to make TMR more effective, balanced, and supportive of all stakeholders in the pharmaceutical supply chain.

However, the industry is cautious about expanding TMR across the pharmaceutical sector, recognising the complexities involved. Industry associations have noted that while TMR is a promising tool for ensuring fair pricing, it must be applied in a manner that avoids unintended consequences such as supply chain disruptions, reduced market access, or the undermining of small and medium-sized enterprises (MSMEs).

Recognising the importance of a robust and future-ready DPCO, industry leaders have outlined key recommendations for how TMR should be implemented to achieve the desired balance between affordability and industry growth. These recommendations focus on maintaining a healthy supply chain while protecting the interests of consumers and MSMEs alike.

Industry stakeholders have called for TMR to be implemented in phases, with a focus on high-value, non-scheduled formulations as a starting point. The roll-out should be prospective, applying only to batches manufactured after the notification is issued, and stakeholders should be informed of TMR guidelines 3 to 6 months in advance. This phased approach would allow companies to adjust to the new regulations without major disruptions.