Medicines - Price Mark-up. The Systematic Loot

I am a patient of diabetes & hypertension , having undergone angioplasty about two & half years back. My monthly bill for medicines is around Rs. 2000.00. While living on pension I am always on the look-out to save on the cost of medicines. Previously my local chemist used to give me discount of 5-7% as a special favor. Then came online pharmacies which are offering discounts from 10-20% on prescription medicines. So I started purchasing medicines online since last six months. Sometime past my attention was drawn towards a new site CashKaro, which offers fabulous cash backs, if one visits the site of retailer / online pharmacy through the link provided on the site of CashKaro. I tried & placed order for medicines through the link provided on the site of CashKaro & look,I got the following discounts & cash back.

Discount……..20%
Cash back on invoice value…..20%

So effectively I got discount of 36% on the medicines I purchased. It was quite a good relief for a man with limited means.

The story does not end here. Recently while walking through market in other part of the city, I noticed a shop dealing in generic medicines. Out of curiosity I entered the shop and inquired about the price of medicine Okacet-L (A Cipla product), which I had purchased from the local chemist a few days back. To my surprise this generic medicine shop charged Rs.10.00 for the strip of 10 tablets, whereas the  local chemist had charged Rs.48.00 , the MRP printed on the strip of 10 tablets.

The above raised serious doubts in my mind about the price mark up policies of  the pharma companies, as neither the online pharmacies nor the generic medicine shop might be selling medicines on loss & it prompted me to surf the internet about the price mark up policies of pharma companies & whether there is any regulation in place. With my limited resources I could gather as follows.

I could not find any regulations on the price mark up of the generic medicines. However Govt.Of India has launched an initiative for providing generic medicines at reasonable prices through govt. owned pharma companies, namely Jan Aushadhi. The medicines in this programme are generally priced at 10% of the comparable medicines available at  the usual chemist shops. The outlets of Jan Aushadhi medicines are very limited.

From the above it can be safely deduced that in case of generic medicines the price mark up ( MRP) by the pharma companies is usually about 500-700% to the ex-factory price. Thus a grand loot by the middle man ( stockists , wholesalers & retailer chemists)  of the general public is going on & poor people in villages ,small towns and even in big cities are being to pay the highly inflated prices through their nose.

I fail to understand the benefits the pharma companies drive by this high price mark up. On the other hand, by this high price mark up of generic medicines, the pharma companies are doing disservice to the nation. I request the pharma companies to voluntarily adopt reasonable price mark up policies to end the grand loot of the common poor people, least the govt. may impose stiff regulations in this regard.

United Forum of Bank Unions - True facet

United Forum of Bank Unions - True facet

This has the reference to UFBU Circular  Dated 15.04.2016 .In the circular UFBU has detailed the progress in respect of issues of the bank retirees.  I do not have faith in UFBU for watching the interests of the retired employees. The history of actions of UFBU speaks otherwise.

- In the 7th bipartite agreement, UFBU agreed for calculation of pension on pre ­revised pay (pay as per 6th bipartite) for employees retiring after 01.04.1998, thus effectively reducing their pension by 15%. The issue of updation of pensions of past retirees also remained unaddressed.  ­

SEVENTH BIPARTITE SETTLEMENT : (Agreement dated 27.03.2000)

# 16. PENSION  In relation to an employee who retires or dies while in service on or after the 1st day of April, 1998 ‘Pay’ for the purpose of Pension shall be the aggregate of the pay drawn by the member of award staff in terms of the sixth Bipartite Settlement dated 14th, February, 1995 and the dearness allowance thereon calculated upto index number 1616 points in All India Average Consumer Price Index for Industrial Workers in the series 1960=100. This shall be subject to the necessary amendments to be made to the relevant provisions of Bank (Employees) Pension Regulations, 1995".

- In the 8th bipartite agreement (effective from 01.11.2002) , the anomaly created in  the 7th bipartite, of calculating pension on pre-­revised pay, was removed. 100% neutralization of DA was allowed for serving employees w.e.f. 01.05.2005, whereas nothing was said in the agreement about the retirees on this issue of DA. The issue of updation of pensions of past retirees also continued to remain unaddressed. Even the budget of 3­-4% of cost for retired employees, proposed by IBA, was appropriated for the benefit of the serving employees in the bipartite, ignoring the interests of  the retired employees. The budget proposed by the IBA could have been utilized for updation of pension for the past retirees.  ­

-  In the 9th bipartite dated 27.04.2010, a retrograde agreement for retirees, fresh anomaly in respect of denying 100% neutralization of DA for pre Nov,2002 retirees was created retrospectively from 01.05.2005.

NINTH  BIPARTITE SETTLEMENT :(Agreement dated 27.04.2010 )

# 3. Further to Clause 7(2) of the Bipartite Settlement dated 2nd June 2005, it is agreed between the parties as under:

(i) On and from 1.5.2005, in the case of employees who retired during the period 1.4.1998 to 31.10.2002, dearness relief shall be payable for every rise or be recoverable for every fall, as the case may be, of every 4 points over 1684 points in the quarterly average of the All India Average Consumer Price Index for Industrial Workers in the series 1960=100. Such increase or decrease in dearness relief for every said four points shall be calculated in the manner given below:

Scale of Basic Pension per month	The rate of Dearness Relief payable as a percentage of Basic Pension
(i) Upto Rs. 3550	0.24 percent
(ii) Rs.3551 to Rs.5650	0.24 percent of Rs.3550 plus 0.20 percent of the basic pension  in excess of Rs.3550
(iii) Rs.5651 to Rs.6010	0.24 percent of Rs.3550 plus 0.20 percent of the difference between Rs.3550 and Rs.5650 plus 0.12 percent of basic pension in excess of Rs. 5650.
(iv) Above Rs.6010	0.24 percent of Rs. 3550 plus 0.20 percent of the difference between Rs.3550 and Rs.5650 plus 0.12 percent  difference between Rs.5650 and Rs.6010 plus 0.06 percent of basic pension in excess of Rs.6010

 -  In the 10th bipartite agreement (effective from 01.11.2012), UFBU agreed for major portion of  increase in wages in the form of Special Allowance & further agreed that special allowance will not form part of pay for calculation of pension, thus effectively reducing the pension of retirees, retiring after 01.11.2012. It is a repeat of action, in different words, as having agreed in the 7th bipartite for agreeing for calculation of pension on pre-­revised pay. Again the issues of 100% neutralization of DA for pre Nov.2002 retirees & updation of  pension remained unaddressed. 

I fail to understand as to why UFBU is typically against the interests of retired employees.The Hon'able Supreme Court Of India had time and again, in various judgments, had termed pension as deferred wages. A bank employee works for average 35 to 40 years in the bank and in average enjoys the pension for 15-20 years. The UFBU, being the representative of  employees interests, should have worked for the decent & respectable pension for the employees, instead of agreeing for effectively clipping of pension in every bipartite after the  implementation of pension in banking industry in 1995.  

The UFBU, the so called champions of bank employees, had historically worked against the  interests of bank employees , in furtherance to ensure their own existence. During 6th bipartite talks, IBA/Govt. proposed pay parity with govt employees. UFBU out-rightly rejected  the proposal, as the same would have reduced the existence of the unions. Had the  UFBU agreed for the pay parity, the present wages of the bank employees would have been  much higher. At present wages of bank employees are app. 60% of the wages of similarly placed govt. employees.( on the assumption of pay parity adopted by Pillai Committee for fixing of pay structure of bank officers in 1979).

Historically pay commissions had always given better awards than negotiated settlements. Nearly, all the pay commissions, starting from Shastri Award (1953) & Desai Award (1962) for bank employees & Central Pay Commissions for govt. employees, have given awards for pay increase between 20% to 40%, whereas in none of the bipartite settlements for bank employees, the pay increase had been more than 16%.

In bipartite settlements, the profitability of the banks continues to be the restricting factor. With obligations of social financing for PSB's, the profitability of PSB'S will continue to be under stress and will always adversely affect the bipartite settlements.

Pay commissions are independent of the management (Bank/Govt.) and the deciding factors for the pay commission are mainly the employment scenario of the country and comparable wages in the other comparable sectors / organisations, with equitable & reasonable standard of living for the employees.

Here it is worth mentioning that the pension of govt. employees gets automatically revised along-with implementation of pay commission report for serving employees. Further the pension of govt. employees gets increased 20% at reaching the age of 80 years and further increase of 20% is allowed every 5 years thereafter.

Thus the present model of bipartite settlements of wages of bank employees has completely failed its objective.

Disclaimer: The sole purpose of this blog is to create awareness on the subject and must not be used as a guide for taking or recommending any action or decision. A reader must do his own research and seek professional advice if he intends to take any action or decision in the matters covered in this blog.

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