PTR, PTS and MRP: how a pharma rate sheet is actually built
UNOS Biotech 2 min read
MRP is the maximum retail price printed on the pack. PTR (price to retailer) is what the chemist pays the stockist. PTS (price to stockist) is what the stockist pays the company or franchise associate. A franchise associate's margin is the difference between their net rate and PTS, before GST and freight.
Every PCD conversation eventually reaches a rate sheet with four columns: MRP, PTR, PTS and net rate. If you cannot read it quickly, you cannot compare two offers.
The three numbers
MRP — Maximum Retail Price. The price printed on the pack. It is the ceiling; a retailer may sell below it but not above.
PTR — Price To Retailer. What the chemist pays the stockist, before GST. The chemist's margin is the gap between PTR and MRP.
PTS — Price To Stockist. What the stockist pays you or the company, before GST. The stockist's margin is the gap between PTS and PTR.
Your own margin as a franchise associate is the gap between the net rate you pay the company and the PTS at which you sell.
A worked example
Take a tablet pack with an MRP of ₹100. A conventional structure might set PTR at ₹71.43 (giving the retailer roughly 20% on PTR after GST arithmetic) and PTS at ₹62.50 (giving the stockist around 10%). If your net rate from the company is ₹40, your gross margin on that pack is ₹22.50 before your own costs.
The exact percentages vary by segment. General range products typically run tighter than speciality or nutraceutical products, which is why most associates carry both.
Two things people get wrong
Comparing net rates without comparing MRPs. A lower net rate on a lower MRP is not a better deal. Compare margin per pack, and margin per pack against the MRP the market will actually accept.
Forgetting GST and freight. GST is charged on top, as applicable to the product category. Freight is usually extra at actuals from the supplier's dispatch city. Both come out of your margin, not the company's.
Products under price control
Some molecules are under the Drug Price Control Order (DPCO), where the ceiling price is set by the regulator rather than the company. Those lines carry thinner margins across the board. If a rate sheet marks a product "DPCO" instead of a price — as several do on ours — that is what it means.