Pharma MNCs violate rules while quoting prices in govt tenders for patented and imported drugs
Owing to lack of an effective mechanism to regulate prices of patented medicines in India, many multinational pharmaceutical companies who take part in government tenders quote higher rates for patented and imported drugs, and also in single tenders, than their trade price realizations (Price to the Stockist - PTS) from the private market.
These pharma MNCs engage middlemen as their agents to secure the contract bid from government departments for supply of their medicines which are not under DPCO regulations. Most often they violate the rules of the National Pharmaceutical Pricing Authority (NPPA) by quoting different rates for supplying same drugs to stockists and to government supply, it is learnt.
Knowingly or unknowingly, many government procurement agencies award the tender contracts to these multi nationals on the rates usually quoted by them. As per NPPA norms, Prices to the Stockists and the MRPs have to be specified in the quotations, but most often this provision is violated. Quoting PTS and MRP will help government agencies to check if any company has quoted higher prices than the prices at which they sell the product in the private market (PTS).
According to market experts, this kind of dealings create circumstances for exploiting government money by multinationals as Indian drug makers are barred from manufacturing such products because of patent protection.