Said to be for the first time in India, a cooperative network of medical shops, which promises to drastically cut the retail prices of medicines, will take shape shortly in Kerala, one of the largest markets for medicines in the country.
The Kerala State Retail Medical Shops Cooperative Society, which plans to bring a large chunk of the roughly 14,000 existing retail shops under its network, will procure its supplies directly from the pharmaceutical companies in order to bypass the middlemen. “It is the huge commissions pocketed by the wholesale distributors and dealers that make medicines expensive for the end-user,” says Sanal C. Alappuzha, president of the society. “By purchasing large quantities of medicines directly from the pharma companies we can save on the middlemen’s commission and pass it on to the patients.”
Mr. Sanal estimates that the shops under the cooperative society would be able to sell medicines at 17 per cent to 60 per cent lower than the MRP (maximum retail price). The society’s head office will open at Kochi later this month and storage facilities will be set up in 12 districts in a couple of months.
It is estimated that Rs. 30,000 crore worth of medicines are sold annually in the country. Of this, Rs. 6000 crore is from Kerala alone, thus making the State arguably the largest pharmaceutical market.
Kerala is a booming market for medicines for lifestyle diseases (such as diabetes). In the past couple of years, the prices of medicines have gone up sharply and the State government has taken many steps to check the trend.
The cooperative society, which faces stiff opposition from the wholesale dealers as well as a sizeable section of All-Kerala Chemists and Druggists Association, is said to have the backing of the government.
A.N. Mohan, president of the AKCDA, told The Hindu that the new venture would bring in unhealthy competition into the drug trade. Moreover, he claimed, the Central Government’s drug price control policy, expected soon, would take care of ‘90 per cent’ of the current problems plaguing the pharmaceutical sector.
He contended that the drastic fall in the prices promised by the society was just tall claims as without traders’ margins the pharmaceutical trade could not survive.
Mr. Sanal, however, said wholesale distributors and dealers were making huge profits at the cost of the patients. He claimed that already more than 5,000 retail medical shops had signed up to be part of the society. He said the shops under the society would sell not just allopathic drugs, but homoeopathic, ayurvedic and veterinary drugs as well.