The pharmaceutical trade in India is passing through a decisive phase. Every challenge facing Indian pharmaceutical industry has its direct impact on the trade sector. The impact of GATT, TRIPS, EMR, mergers & acquisitions, co-marketing etc are all to reflect in the day to day functioning of drugs trade. As the Apex organization representing 5.5 lakh retail and wholesale chemists of India, All India Organisation of Chemists and Druggists (AIOCD) has always been successful in identifying the problems of the drug trade fraternity. We at AIOCD are determined to take up the challenges and prepare and guide our members in the right direction.
Pharmaceutical companies are losing their brand equity today. Most of the companies are introducing similar products, leading to fragmentation of market share for branded generics. The situation has grown in such a way that it has started to trouble both the doctor as well as the trade. The plethora of brands for a single drug is a growing problem for chemists all over the country. If there are 25 companies coming out with different brands of one single drug, the chemist is compelled to stock all 25 brands for the sake of remaining in the highly competitive business of drug trade. In the process, a retailer often stocks 90 strips of each drug by investing at least 10 times more than their international counterparts, who deal with patented medicines. Our margins are fixed, but our investments are ever increasing.
There is a lot of talk on the need for fully air-conditioned retail set up. The proponents of such reformation never think that India is a country where majority of the areas are under severe power crisis. International standards are to be adhered. There are several medicines, which should be stored under 25-degree temperature. Some should be kept under 16 degrees. But if there is no electricity for 12-15 hours in a day how can you expect a chemist to maintain all storage standards? In addition to all this, we are yet to have proper cold chain facilities. Medicines are being transported under normal room temperatures.
Chemists are also equally cautious about bringing in necessary changes within all retail outlets. Due to problems like this, vaccine manufacturers are not selling their products through the normal trade channels. Absence of single dose vials in many of the cases is also preventing the chemist from getting vaccine business. If you look at a purely business point of view, there is 16 - 20 % margin in vaccine sales which we are losing due to the inability of the government to ensure adequate power supply. Should the chemist alone shoulder the blame?
The absence of Bill is one of the most common complaints raised against retail chemists. No body, not even the government tries to understand that the real problem here lies with the customer. No licensed chemist will turn away a customer if he insists on a bill. Often the patients are in a hurry and leave the counter without even waiting for the bill. However, for every purchase, the retailer has to maintain a bill, which he prepares, whether or not the customer accepts it or not. There has to be an end to the blame the trader takes, there should be a beginning to greater customer education.
Doctors expect more from chemists. They always complain that the chemists are giving medicines without prescription. But are these doctors professional? They don't just confine their role to prescribing medicines. They often dispense medicines. There are also instances of medicine purchase using the chits given by medicines. When the doctor's original prescription remains on the patient's chart, the patient reaches the medical shop with a small note given by the nurse. It is known to everyone that these medicines are being purchased against prescription. But can we prove it? If the inspector visits the shop, he would certainly find it a fit case for challan. In cities there are plenty of instances where the diabetic or heart patients who needs their routine medicine, purchases it during the first week of every month and stocks it for the rest of the month. The chemist would personally know these customers. He will also be certain that they have their prescriptions back home. What should the chemist do under such circumstance? Should he stick to technicalities and lose his business?
Pharma trade is not like other trades. It's a noble profession. There has to be a government policy not to allow too many medical shops near hospitals. In fact the government is doing just the opposite by allowing any number of shops. This result is cut throat competition, cost cutting.
Competition among generic manufacturers is also turning ugly. They are giving 200% to 300% margin. We never asked for that much money. These are all instances, which leads to erosion of public faith in Indian chemist. AIOCD is against the companies offering freebies to traders. For high value products there are schemes like 10 + 2. This means the companies are giving 20% extra commission to the chemists. Let them take back all such schemes and reduce the rates of the drugs. Government should closely watch such practices of the companies.
Pharmacist is mandatory requirement. But so we have that many pharmacists to be placed in every shop? Can every retail chemist afford to employ diploma holders alone as salesmen?
Among all our campaigns and demands, our request for an MRP inclusive of all taxes is perhaps the oldest. It is over eight years now since we began campaigning for this change. Nothing has happened yet. If the tax is 8% in Delhi, it might be 9.9% in Rajasthan. Suppose a patient purchases the drug from two states, he feels that the Rajasthan person is overcharging. Some may doubt the quality of the drug, if it is cheaper than what they purchased before from some other state.
Spurious drug issue is another major area of concern. There are many experts in the government as well as in the industry who finds trade responsible for the presence of "spurious drugs". AIOCD feels that the entire issue should be seen in a different angle. We should understand that there are different types of "spurious drugs" in the market. While the most dangerous among them, the original nakli, where there is no ingredient as claimed on the pack, is manufactured and sold by criminal elements, there are several other categories of "spurious drugs" the sale of which has been wrongly attributed to the licensed drug trade. Our concern here is about drugs that are duplicated / counterfeited - though they have the exact ingredients and are as effective as the original drugs.
Why is such "spurious" drug business so attractive to the "anti-socials"? It's the profits involved in the drug sales, nothing else. The pharmaceutical companies should realize that when they are producing a drug at the cost of 20 paise per tablet, and pricing it Rs 20, they are inviting such imitators into this business. Let the companies reduce the prices of all such drugs. The imitators would automatically disappear. Now let us see how the trade channel turns porous for such imitators to pump in their drugs into the supply chain. Here again, the fault is with the companies. They never care to have a control over the supply chain. They are often concerned only with their quarterly sales figure and in order to jack up their share values, they often dump the drugs on to the C&F agent who in turn have to supply it to the stockists, distributors, sub-dealers, wholesalers, and finally the retailer. This supply chain is very porous due to the carelessness of the companies. If they can tighten their grip over the supply chain, and can track the movement of drugs, spurious drug issue can be solved easily. Trade is willing to cooperate with the industry.
I don't agree with the spurious drug figures put out by the industry. Most often people try to evade taxes by smuggling drugs from one state to another. But they are not spurious drugs. It's only an economic offence. Since they want to save on the tax difference, they will not have any supporting bills. Such drugs are often called as spurious. Further, there is also no rationale in simply penalizing the retailer for supplying "spurious drug". What if some drug has entered into the shop due to his oversight? What the government should do is to look into the past track record of the retailer. If the law is strengthened it will be misused against chemists. Trade is against spurious drugs. But no genuine retailer should suffer due to a fault that is not of his.
The drug trade, at least in the metros, is to witness tremendous changes in the coming days. With retail drug chains like Medicine Shoppe establishing themselves in the cities, retail chemists would certainly have to invest more on infrastructure. However, we don't find any threat from such big shops. Our only request to the government and the pharmaceutical companies would be to set a level playing field for all of us. There should not be any special rates for drug retail chains. There are companies who have special rates for big hospitals who do direct purchase. Such special rates should not be given to big retail networks. It should be a level playing field. However we are not against any changes if it assures quality medicine for the customers. AIOCD believes that Indian chemist derives his strength from the personal relationship he maintains with his customers.
AIOCD is not like a trade association. We are doing social work. Our role is to coordinate between consumers and trade, government and trade, and also the industry and trade. We work towards educating our members.
-- The author is President Retailers & Distributors Chemists Association of Delhi & Immediate past Organising Secretary, AIOCD