NEW DELHI: Steep margins on medicines are a concern as they can push a product or influence its selection, with government tightening its glare on errant healthcare players including companies and hospitals, pharmaceuticals secretary Manoj Joshi said.Joshi elaborated on the unethical practices in healthcare industry, just before govt announced capping of trade margins at 30% on all cancer drugs Thursday. “Two broad areas of malpractice which we have noticed is where hospitals favour expensive medicines that offer the highest margins. Second, when smaller manufacturers push products carrying unusually high margins, it can create a nexus with doctors or retailers, usually in smaller towns,” he said, adding govt should not intervene in the margin issue, except where there is “malpractice”.Joshi said the strategy needs to be differentiated, with higher-priced medicines requiring a different approach from low-cost drugs dispensed in rural and remote markets through govt-run Jan Aushadhi stores. The viability of these 20,000-odd stores is a challenge.
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“Here, medicine prices are low, margins are also small, but cost of setting up and running a store remains same. We are addressing this by increasing margins, but even if we double them, some stores may still not be viable. The challenge is acute in remote areas. Even big pharmacies stock FMCG products to supplement revenues,” he added.Talking about Uniform code for Pharma Marketing Practices (UCPMP), Joshi said fewer instances of larger companies as violators are being seen. Many are heavily dependent on US and European markets and are conscious of their reputation and ethics. Issues continue among smaller manufacturers with turnover of around Rs 100-150 crore operating in local markets, where there could be a nexus between doctors or retailers and manufacturers.