After a month long boycott of Plethico Pharma’s range of products in the states of Kerala and Bengal, the pharmaceutical wholesalers and retailers have withdrawn the protest.
The decision to discontinue the boycott was taken after traders in both the states conducted a series of meetings with the Mumbai based Shreya Life Sciences (with which Plethico Pharma forms a subsidiary) officials and the executive committee of the All India Organisation of Chemists and Druggists (AIOCD). The boycott was primarily in protest to the company offering margins to the traders excluding the 16 per cent excise duty.
When contacted by Pharmabiz.com, a Kerala-based trader said that the withdrawal was only temporary and another round of meeting with the executive committee of the AIOCD in February will decide the fate of the matter.
“Shreya officials have agreed that whatever the executive committee of the AIOCD decides in February, they will abide by it. This should mean that the company is open to include the excise duty also in the margins if the executive committee decides so,” said the trader.
Plethico Pharma has been offering traders’ margin inclusive of excise duty for a long time. However, after its takeover by Shreya Life Sciences in January 2003, excise duty was withdrawn from the commission.
The meeting would also pave way for preparing mutually agreeable guidelines to the industry and the trading community that will form a benchmark for deciding the margins to the traders.
“There is confusion within the trading community with the current practice of deciding margins. A benchmark is definitely required, which will clearly decide the merit of the drug to be selected for higher or lower margins,” he said. After excise inclusion, a company incurs only a 1.6 per cent difference on sales, which it makes up anyhow. However, due to ever increasing trade-operating costs, it is the traders who have to face the brunt, he added.
Price-controlled drugs attract a margin of 8 and 16 per cent for wholesalers and retailers respectively, whereas decontrolled products attract a margin of 10 and 20 per cent.