India: CCI worried about “unreasonably high margins” for high drug prices

According to The Times of India, the Competition Commission of India (CCI) has pointed at “unreasonably high trade margins”  responsible for exorbitant drug prices, highlighting the role of intermediaries in increasing along with need to promote generic medicines with quality assurance.

The CCI has been clamping down on unfair business practices in the healthcare space. The government has also been taking measures to ensure good practices in the sector. The watchdog’s policy note stated that one major factor that contributes to high drug prices in India is the unreasonably high trade margins.

“The high margins are a form of incentive and an indirect marketing tool employed by drug companies,” an official release quoting the policy note stated. Further, the policy note stated that self regulation by trade associations contributes towards high margins as they control the entire drug distribution system in a manner that reduces competition. “Electronic trading of drugs, with appropriate regulatory safeguards, could be another potent instrument for bringing in transparency and spurring price competition among platforms and among retailers, as has been witnessed in other product segments,” it added.

Full Content: The Times of India