Our Bureau

Mumbai , Jan. 12

AN increase in the price of medicines is around the corner, if the Government goes through with its recent notification on levying excise duty on maximum retail price (MRP), caution pharma industry officials.

Reacting to the recent note on MRP-based excise along with the abatement of 35 per cent, representatives with the Indian Drug Manufacturers' Association (IDMA) said that most companies would not be able to sustain the inadequate abatement. As a result, medicine prices would go up by about 10 per cent, an official with IDMA told mediapersons.

Further, officials said, the recent notification would sound the death knell for small-scale industries, which has been surviving on doing job work or contract manufacturing for large manufacturers. Drug companies will now do their manufacturing in-house, the official said.This would result in the closure of units leading to unemployment, the association said.

Different pharma associations were slated to meet the Finance Ministry officials on Wednesday. But the meeting has been postponed for later in the week. Industry officials are hoping that the notification will be kept in abeyance.

The recent note from the Government will only cripple the SSI sector, rather than plug the leak of revenue, which was the primary rationale of the Government, since large pharma companies were sponging off from the benefits given to the smaller units. The drug industry is seeking an abatement to more than 50 per cent.

Further, IDMA representatives said, the present state of uncertainty was damaging, since there is about Rs 1,000 crore worth of packaging material lying in the inventory.

The packaging material would go waste, the IDMA official said, as re-labelling was difficult in some cases and impossible in others.

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