PTR and PTS: pharma pricing explained
Working back from the MRP to what the retailer and the stockist actually pay.
Last checked 20 September 2026
PTR is the Price to Retailer — what a chemist pays for a pack, excluding GST. PTS is the Price to Stockist — what the stockist pays. Both are worked back from the MRP: strip out the GST, then take out the retailer’s margin to get PTR, then the stockist’s margin to get PTS.
The chain
| Who | Pays | Sells at |
|---|---|---|
| Stockist / distributor | PTS | PTR |
| Retailer / chemist | PTR | MRP |
| Patient | MRP | — |
The critical thing to hold on to: MRP includes GST. PTR and PTS do not. The invoice adds GST on top of PTR or PTS. Mixing that up is the single most common error in pharma pricing.
Working it out
- 1
Strip the GST out of the MRP.
MRP excluding GST = MRP ÷ (1 + GST rate)
- 2
Take out the retailer’s margin to get PTR.
On a selling-price basis: PTR = MRP ex-GST × (1 − margin). On a cost/markup basis: PTR = MRP ex-GST ÷ (1 + markup).
- 3
Take out the stockist’s margin to get PTS, the same way.
Agree which basis you mean
"20% margin" can mean 20% of what the retailer sells at, or 20% added on top of what they paid. The two give different prices. Settle it before you quote — the calculator below lets you pick either.
A worked example
MRP ₹ 120, GST 5%, retailer margin 20%, stockist margin 10%, both on a selling-price basis.
| Step | Working | Result |
|---|---|---|
| MRP excluding GST | 120 ÷ 1.05 | ₹ 114.29 |
| PTR | 114.29 × (1 − 0.20) | ₹ 91.43 |
| PTS | 91.43 × (1 − 0.10) | ₹ 82.29 |
| Retailer pays, with GST | 91.43 × 1.05 | ₹ 96.00 |
| Stockist pays, with GST | 82.29 × 1.05 | ₹ 86.40 |
| Retailer earns per pack | 114.29 − 91.43 | ₹ 22.86 |
| Stockist earns per pack | 91.43 − 82.29 | ₹ 9.14 |
Working backwards
The same steps run in reverse when a company gives you a PTS and you need the MRP that leaves everyone their margin: add the stockist margin back to get PTR, add the retailer margin to get MRP ex-GST, then add GST.
This is the calculation to do before agreeing to a scheme. A PTS that looks attractive can imply an MRP the market will not bear.
What else eats into the margin
- Free goods. A 10 + 1 scheme effectively lowers your cost per saleable unit — the real margin is better than the PTS suggests.
- Cash discount for prompt payment, usually a percentage off the invoice.
- Breakages and expiry. Stock you cannot sell comes straight off the margin you did earn.
- Credit period. Sixty days of credit to a retailer has a financing cost, whether or not anyone books it.
A stockist margin of 10% on paper is usually rather less by the time these are counted.
Price control
Scheduled formulations have ceiling prices fixed by the NPPA, and non-scheduled ones are subject to limits on annual price increases. Where an item is price-controlled, the MRP is not simply a commercial decision — check the current position for the products you handle.
Is GST charged on PTR or on MRP?
On the transaction value — what you actually charge, which is the PTR or PTS on your invoice. MRP is the ceiling price to the patient and already includes GST.
Can I sell above MRP?
No. MRP is the maximum retail price, inclusive of all taxes. Selling above it is an offence under legal metrology rules.
Why does the same molecule have wildly different margins?
Because margin is a commercial arrangement, not a rule. Branded generics and promoted lines often carry much wider trade margins than established brands.
Sources