A new chemist shop owner in Lucknow or Indore soon finds that every stockist price list speaks in two codes: PTR and PTS. Working out the real PTR PTS margin matters, because a few rupees per strip across hundreds of products decides whether the shop earns. This guide explains the chain from MRP down to the company's price, with the details that confuse new retailers most.
The chain from MRP to PTS
- MRP: printed price including GST; the patient pays this at most.
- PTR: price to retailer, what the chemist pays, before GST.
- PTS: price to stockist, what the stockist pays the company, before GST.
MRP without GST = MRP ÷ (1 + GST%) PTR (margin on cost) = MRP without GST ÷ (1 + retailer %) PTS (margin on cost) = PTR ÷ (1 + stockist %)
Markup vs margin: the 20% confusion
“20% retailer margin” can be applied in two ways, and price lists don't always say which:
| Method | PTR | Retailer earns | As % of selling price |
|---|---|---|---|
| On cost (markup) | 95.24 ÷ 1.20 = ₹79.37 | ₹15.87 | 16.7% |
| On selling price (margin) | 95.24 × 0.80 = ₹76.19 | ₹19.05 | 20.0% |
The difference is over ₹3 on a ₹100 product. Before comparing two companies' terms, convert both to the same method.
Which method is standard?
Both are common in Indian pharma. Many lists use the markup (on cost) convention; some state margin on the selling price. The price list or the company's trade terms should say which; ask the stockist when it doesn't.
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Schemes and free quantity
A “10 + 1” scheme means one free strip for every ten bought. The effective cost per strip falls by 1/11, about 9.1%, which raises the real margin. For example, a PTR of ₹79.37 with a 10 + 1 scheme gives an effective cost of 79.37 × 10 ÷ 11 = ₹72.15 per strip.
Price-controlled medicines
For formulations whose ceiling prices are fixed by the National Pharmaceutical Pricing Authority (NPPA) under the Drugs Price Control Order, trade margins are usually lower, commonly about 16% for retailers and 8% for stockists. Check the margin column for scheduled products separately.
A quick check routine
- Note the GST rate on the invoice (5% for most medicines).
- Remove GST from MRP.
- Apply the margin method stated on the price list.
- Adjust for schemes or free quantity.
- Compare the result with the PTR on the bill.
The PTR PTS calculator does all of this with either margin method, any GST rate and custom margins, and gives an Excel formula for whole price lists.
Frequently asked questions
What is the PTR PTS margin for chemists?
Typically about 20% for retailers and 10% for stockists on most medicines, lower for price-controlled ones.
How do I calculate PTR from MRP?
Remove GST (MRP ÷ 1.05 for 5% GST), then divide by 1.20 for a 20% margin on cost, or multiply by 0.80 for a 20% margin on selling price.
What is the difference between markup and margin?
Markup is calculated on cost; margin on the selling price. A 20% markup gives a 16.7% margin.
How does a 10 + 1 scheme change my cost?
It lowers the effective cost per unit by about 9.1%.
What are trade margins on price-controlled drugs?
Commonly about 16% for retailers and 8% for stockists.
Keep reading
- PTR PTS Calculator: the free tool this guide explains.
- All math & utility calculators
- Percentage Shortcuts: 10 Mental Maths Tricks for Exams and Shops
Sources: Indian pharma trade conventions (retailer about 20%, stockist about 10%; lower for price-controlled formulations); GST on most medicines: 5%.