Taking the order of the Competition Commission of India (CCI) against All India Organization of Chemists & Druggists (AIOCD) in February this year as a tool for resisting the opposition of trade associations, the drugs control department of Kerala has started stringent actions to break the monopoly of AKCDA, the affiliate of the national trade body in Kerala.
In February this year the CCI had issued a direction to the national trade body against its alleged unfair trade practices. CCI wanted the organization to stop and desist from indulging in practices that are anti-competitive in violation of Section 3 of the Competition Act. Besides, the Commission imposed a penalty of Rs.47,40,613 on the trade body for engaging in unfair trade practices.
Last week the drug control department initiated actions including raid against two wholesalers in Malappuram district for boycotting the products of Ajantha Pharmaceuticals of Mumbai, for the company had given new stockistship to a dealer in the district. The All Kerala Chemists & Druggists Association (AKCDA) was fighting tooth and nail against companies who violate the conditions put forth by it in granting new stockistship. AKCDA conducted agitations and boycott of companies in several parts of the state for the same reasons even when there were court orders against such move.
G Ashok Kumar, assistant drugs controller at Kozhikodu said recommendation for cancellation of licences of two wholesalers, one at Manjeri and another one at Perinthalmanna, has been forwarded to the head office at Thiruvananthapuram. He said the boycott was carried out by the members of AKCDA who were making attempts to thwart supply of medicines by companies and ultimately planning to create shortage of essential drugs. He added that recommendation for penal action against companies who were yielding to the threat of AKCDA would also be recommended.
Worried over the move of the regulatory agency, former general secretary of AKCDA, Antony Tharian, who still controls the organization, said manufacturing companies are not complying the norms of the trade body in Kerala. “We were controlling the whole distribution of medicines in Kerala and with much effort we implemented a plan which is now being shattered. Now no company is obeying our orders and they directly supply their products to anyone who wants. Such a situation cannot be tolerated. Kerala was the only state in India where the whole distribution was controlled by the trade body. Now, the whole distribution system is broken”, he said.
Managing director of Delvin Formulations, Chennai, J Jayaseelan who has distribution in Kerala, said the government is taking a good and people friendly action. Now anyone can buy any medicine from any company. If the action of the government continues there will be good environment for sale of all kinds of medicines, that is what people want.
AKCDA was insisting that a company could give distributorship to a maximum of eight dealers in a district and the applications should be received by the company through the association. The application for stockistship should be accompanied by the No-objection Certificate issued by AKCDA. Further, the dealer who wants to be a stockist should have a monthly revenue of minimum Rs.one lakh and he should take membership with the organization. The association had also made a demand that one company could grant distributorship to a dealer in a revenue district only within a period of two years.
Now companies all over India have started ignoring the conditions of AKCDA and supply medicines to all the traders whether they are members of AKCDA or not. Recently Sun Pharma of Ahmadabad supplied medicines to new dealers in Malappuram and Kollam districts. Ajantha Pharma supplied their products in Kozhikodu and Malappuram districts, Fourrts Lab Chennai supplied to an agent in Alappuzha and Serum Institute Mumbai distributed all their products to a stockist in Palakkadu, said Antony Tharian, who was defeated in the recently held unit election of AKCDA.