Most people aren't aware of the real cost and profit margins of medicines. The medicine strip you buy for 100, costs way less for medical store owners. The profit margins will surprise you. To know more, we spoke with Anish, a distributor. He explained the profits involved in selling medicines, and we're here to share that with you.
When we asked Anish about the profits medical store owners make, he mentioned those margins vary by company, type, and location, usually falling into four to five categories.
Margins on Pharmaceutical Drugs
First up, pharmaceutical drugs come with margins of 20% to 30%. Representatives recommend drugs to doctors, which often leads to margins of 20% to 35% on the sales.
Higher Benefits from Generic Drugs
Generic drugs typically offer more profit. Retailers push these for direct sales, reaping margins between 50% to 75%.
Earnings Through Doctors
Companies also offer doctors commissions to recommend certain medicines. These come with profit margins ranging from 30% to 35%, with a slightly lower material cost.
Source: aajtak
Is Quality Compromised?
Some medicines incorporate only 90% of material use, leading to lower costs and higher profit margins. While the material use of medicines ranges from 90% to 110%, the legal threshold ensures at least 90% material without lowering quality.
This is why some companies gain huge profits by minimizing materials, while others maintain high material standards, offering less margin but more trust.
Margin on Cough Medicines?
Anish shares that generic cough medicines cost 8 and sell to retailers for 20-30. Their MRP can hit 80-100, resulting in substantial profits.
