New Delhi: In an attempt to bring uniformity in prices of medicines, Chemicals Minister Ram Vilas Paswan today (Aug 18, 2004) asked the States to exempt them from local taxes or at least advance the implementation of Value-Added Tax (VAT) regime for drugs.

"States should come forward in the interest of consumers and exempt drugs from all local taxes like sales tax, octroi or at least implement VAT regime immediately instead of the scheduled April 1, 2005," Paswan said at the day-long meeting of State Finance and Health Ministers in New Delhi.

Pointing out that the consumer has to pay a price much higher than the retail price of the medicines with the chemists adding local taxes at their discretion, Paswan expressed dismay at the huge margins in drug sales.

The Minister said in the case of one particular drug, it was found that while the pack was sold by the retailer at Rs 26, he had bought it from the manufacturer at a pittance of Rs 0.80.

He favoured printing both the manufacturing cost and the retail price on the medicine strip along with the expiry date.

Spurious drugs are flooding the market and this is also a matter of grave concern and immediate action must be taken to control the menace, he added.

The State representatives welcomed the idea of controlling drug prices through a cut in the taxes but said the drug control authorities are badly understaffed and need to be strengthened.