There is a big difference in the prices of the pharmaceutical products in India. The products having same drugs with same label claim are being sold in different prices. Sometimes this difference increases the prices twice, thrice or even ten folds.
Retail Price = (MC+CC+PM+PC) x (1+MAPE/100) + ED
MC = Material cost including the cost of drug, excepients and loss during the processing.
CC = Conversion cost
PM = Cost of packaging material including the process loss
PC = Packing charges
MAPE = Maximum Allowable Post-manufacturing Expenses
ED = Excise Duty
Government fixes the retail price by the above formula but all the pharmaceutical companies try to increase the retail price to increase their profit.
The prices of the pharmaceutical formulations are calculated by the same formula but there is a great variation in the prices of different companies because generally companies change MAPE to increase the drug price. The government suggests the value 100 for MAPE to calculate the retail price. It increases the retail price twice but when manufacturer increase it, the price will also increase accordingly. Some companies increase the price by adding their research and development expenditure and the cost of product development and regulatory approvals.
Atenolol Tablets 50 mg (strip of 14 tablets) manufactured by the FDC Limited are sold for `8 and the same drug manufactured by Nicholas Piramal India Ltd. is being sold for `64. Nicholas is selling same drug in eight times higher prices.
Some companies says that there expense in marketing is more than other company but you can imagine the difference in expense in marketing and product promotion and it could not be eight times more than the other one.
In some cases the two products of same company having same drugs and their label claim are being sold in different prices. For instance Atenolol tablets 50 mg (strip of 14 tablets) manufactured by IPCA Laboratories Ltd. with the name Teno 50 are being sold for `25 and with the name Tenolol 50 for `43.
It shows that the prices are being increased to increase the profit margin of the company. Comment your views for the situations.
Ankur Choudhary is India's first professional pharmaceutical blogger, author and founder of Pharmaceutical Guidelines, a widely-read pharmaceutical blog since 2008. Sign-up for the free email updates for your daily dose of pharmaceutical tips.
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