Punjab: 'Medicine For Rs 9 Sold At Rs 108 To Customers', Activist Reveals Big Pharmaceutical Profits

Punjab has been on a cutting edge after a local chemist revealed what he calls as the 'best-kept secret in the pharmaceutical industry', revealing the huge profit margins between the cost price and the selling price of commonly used medicines.

Baljinder Singh Jindu, a social activist, who manages a non-profit chemist shop 'Guru Nanak Modikhana' in Ludhiana, posted a video on Facebook where he claimed how the Maximum Retail Price (MRP) of various medicines was higher than its purchase cost to the chemists.

In the 25-minute video, Jindu stated how customers are deceived by showing some commonly used medicines, their purchase costs and MRP, ThePrint reported.

The video has been doing rounds on social media for the past one week and has received more than 12,000 shares. Though Jindu has been backed up by Akal Takht, the highest temporal body of Sikhs, he received a huge backlash from the chemist fraternity. He is no longer supplying the medicines.

Post the incident, the Punjab government has initiated an inquiry on Friday to investigate how Jindu is managing a chemist store without any prior qualification in the field, as the government has not issued any fresh licences for the past six years.

Jindu told the media that he and his family have been receiving threats after the video went viral, which clearly shows that he is standing for a right cause and these reactions strengthen his will more.

"I never imagined my video would lead to such a furore but the reaction has only strengthened my resolve."

According to the media, he has been running a social service organisation called Sikh Welfare Council since 2011. During COVID-19 lockdown, Jindu's organisation started doing langar sewa, where he realised how many marginalised people with illnesses were in dire need of medicines, but it cost them fortune.

In May, he tied up with a chemist shop, which he informed was not doing well for a long time, decided to revive it and started managing the store.

All medicines were sold at a cost price, and within 15 days, their daily sales touched a lakh, out of which they did not make any profit, as the shop runs with charity funds.

Jindu said he came to know the difference in the purchase price and MRP, when he visited a wholesale market to buy medicines for the chemist shop. Revealing the prices, he confirmed that medicine that had a printed price of Rs 108 actually cost him only Rs 9.

An injection worth Rs 2,544 cost me only Rs 419, whereas, the N95 mask which has the market price of Rs 250 to 300 each cost him Rs 40. "I came back and decided to go live on Facebook and make the public aware of how much they were being cheated when they paid the printed price and how huge the margin was for retailers," Jindu as quoted.

"All hell broke loose with that video. I spoke the truth and I stand by it," he added.

Opposing the claims, the Punjab Chemists Association (PCA) has condemned Jindu and accused him of maligning the image of his fraternity. "We are not against his highlighting the margin that is there in generic medicines but we object to the manner in which he has painted everyone else as scamsters taking the public for a ride," G.S. Chawla, general secretary of the PCA and President of the Ludhiana Chemists Association told ThePrint on Friday.

One of the chemists posted a video on social media, countering the claim and putting forth the opinions on the issue. "What Jindu is talking about are generic drugs and not ethical/branded ones. And while there is a rule regarding not selling something above the MRP, chemists are not bound to sell a medicine below the MRP. It depends on what your own input costs are."

Jindu has also allegedly accused local MLA Bharat Bhushan Ashu that he was aware of the high margins and was supporting it, but the latter has denied the allegations.

President of the Punjab Drug Manufacturers Association, Jagdeep Singh said there is no 'simplistic approach' to the MRP controversy. He informed that the rates of almost 50% of the drugs are controlled through the drug price control orders (DPCO) of 1995 and 2013.

For the rest, the manufacturer has been given the liberty to set any rate. He further added that there is no doubt about the wide margin that exists between the cost and the selling price of generic drugs because that price also accumulates the amount that generic drug manufacturers are not spending on marketing.

"The margin is the attraction to retailers so that they put in the effort to sell the drug at the counter. Companies manufacturing ethical/branded drugs, however, have marketing overheads and margin for the retailer is low," Singh said.

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