The executive committee meeting of the Tamil Nadu Chemists and Druggists Association (TNCDA) has decided to ask the Consortium of Indian Pharmaceutical Marketers and Manufacturers Association (CIPMMA), an organisation of pharmaceutical marketers supplying medicines to wholesalers across Tamil Nadu, to increase the profit margin given to the traders by each member marketing company to 10 and 20%.
Similarly, TNCDA will urge the manufacturing companies to hike the percentage of margin to 10 and 20 from the existing 8 and 16 %.
Sources from TNCDA informed Pharmabiz that except a few major domestic companies like Fourrts India, Apex Lab and Delvin Formulations, all the manufacturing companies in Tamil Nadu are giving only 8 and 16 per cent margin to the drug traders.
TNCDA members are the clients of the marketing companies association, CIPMMA, which have more than 2000 member marketers and they control the entire drug supply all over Tamil Nadu. But they are not ready to part with a good share of their profit with the traders.
If CIPMMA is not ready to give a regular margin of 10 and 20 per cent, the members of TNCDA, that come around 35,000 retailers and wholesalers, will sever their business ties with the marketers association. CIPMMA is controlling the medicine supply in the whole of Tamil Nadu through their six zonal committees. Initially, the organisation was concentrating in Trichy and the southern part of the state, but now it has a statewide presence in the state with head office in Chennai, sources from TNCDA said.
According to the chemists body, the stockists and retailers associating with TNCDA will support only those who are ready to part with 10 and 20 per cent margin. The EC meeting felt that except CIPMMA, all Indian and other multinational companies provide 10 and 20 % margin. Exception case is only for DPCO category drugs.
With this decision of the chemists and druggists association, the margin discount issue between the traders and marketers in Tamil Nadu is taking a new turn.
S Selvakumar, convener for Trade and Industry segment of the TNCDA, said CIPMMA had agreed in a meeting held last year to share 10 and 20% margin to the retailers. But, the 2,000-member consortium of marketers so far did not comply with their promise and the situation will force the trade body to take a new decision.
“CIPMMA chairman M Kannan and his association office-bearers asked for some time for review the margin percentage. We have given them one year time, but so far they are not showing any interest to part with a few more percentage of their profit to the retailers, most of whom are registered pharmacists. So, this is the ideal time for us to rethink about whether we should continue our business ties with the marketers association”, said Selvakumar.
He said after the roll out of Good and Services Tax, there are so many confusions prevailing in the market with regard to settlement of expired drugs and damaged products. The drugs and cosmetics act does not allow the traders to create tax invoices for date expired drugs. Since GST is in force now, the manufacturers are asking for GST invoices for settling the expiry claims with tax portion. This causes big loss to both wholesalers and retailers. Creation of tax invoice is a gray area in the post GST period, but the CIPMMA people are silent over this.
The meeting has come up on a decision further that they should take the issue of tax on expired drugs to the manufacturers and marketing companies (CIPMMA) through their national trade body, AIOCD. Regarding this, Selvakumar has written one letter to J S Shinde, general secretary of the All India Organisation of Chemists and Druggists.
While interacting with Pharmabiz, some pharma traders in Chennai said in anonymity that the crucial issues in the pharma trade industry in Tamil Nadu were happened only after KK Selvam, a drug dealer from Salem district, was elected as the general secretary of TNCDA.. Later, he has been elected to the national trade body as its Treasurer. The Tamil Nadu drug traders now want a new general secretary for the state chemists and druggists association which is struggling for want of a leader.