labels: pharmaceuticals
Distribution margins in Indianews
01 January 2000

Distribution margins in India are fixed as per provisions of the Drug Price Control Order. For controlled drugs, the stockist''s margin is fixed at 8 per cent of the maximum retail price, and for decontrolled drugs DPCO allows 10 per cent. For retail chemists, the margins offered are 16 per cent in the case of controlled formulations and 20 per cent for decontrolled formulations.

Manufacturers also offer cash discounts of 5-10 per cent to stockists by issuing free packs. Stockists in turn provide a 2 per cent cash discounts to retailers.

The recent spate of mergers and acquisitions has highlighted differences in company policy concerning the inclusion of taxes in trade margins

 According to the All India Organisation of Chemists and Druggists, Glaxo used to pay a trade margin calculated on the price inclusive of excise duty, while Burroughs Wellcome excluded excise. Similarly, Hindustan Ciba-Giegy paid trade margins exclusive of duty and Sandoz paid the retailers with duty included. These differences are yet to be resolved.

 

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Distribution margins in India