The middlemen can bleed a sick person to death!

Do you know that pharma companies alone are not responsible for the high prices of drugs? The middlemen – the stockists, retailers and C&F’s are equally responsible?

Let us take the example of the fastest selling oral iron Orofer XT Tablets.

Here is the price structure of Orofer XT

MRP Rs. 72.90 / strip of 10 tablets
Price to retailer Rs. 60.75 / strip of 10 tablets
Price to wholesaler Rs. 55. 22 / strip of 10 tablets
Difference Rs. 17.67 /  strip of 10 tablets

I.e. when a pharma company sells its product at the first point at Rs. 66.00, you, the ultimate customer shell out Rs. 100.00 when you buy from a retail chemist!

In other words, the profit margin of the middlemen is roughly 34%, including the 1.5% to 2% commission of the C&F’s. AND THEY WANT MORE! 😦

This also means by the time the pharma company dispatches the goods to their depots (now C&F’s) and you purchase it from a retail counter shop, for a product whose MRP is Rs.100.00, the middlemen gobble up Rs. 34.00 (approximately).

This is roughly 4 times higher than the margins offered by FMCG and white-goods companies.

What’s worse, the retailers and the chemists are highly unionized! Like any leftist textile mill / factory unions! They are virtually bullying and dictating terms to the pharma companies, pharma manufacturing associations (like OPPI or IDMA), Department of Pharmaceuticals, MRTP Commission and other regulatory authorities.

At this stage you and I are only hapless onlookers! I have even approached Anna Hazare’s group on this subject but it’s over two months – they have not responded.

This is only to keep you aware of the mal-practices of the middlemen in the pharma industry.

2 responses to this post.

  1. Posted by Uttam Padukone on April 14, 2012 at 3:28 pm

    Are these the only malpractices within the pharma companies? What about the malpractices in the approval process for new drugs?

    Considering that Lipitor is a Multi-billion dollar profit making medication, where is the guarantee that the approval process does not involve change of hands for money?

    Personally, I experienced short-term memory loss in 2004-5 when i used to take Lipitor for my needs. When I brought it to the notice of my Primary Care Physician (PCP), she said that such a side effect was unheard of and that it was only my imagination! I have finally been proved right because the US FDA is admitting that this side effect is not isolated after all!

    One only wonders how many such side effects have been suppressed by the pharma companies during the approval process while the regulatory authorities looked the other way – not out of neglect but as a deliberate action.

    Reply

    • No, this is just one of the few examples. Please do read my article “Dont be surprised if a member of the IMA prescribes Cherry Blossom for the health of your shoes’.

      Reply

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