Due to lack of proper monitoring by the regulatory officials, the wholesalers of pharmaceutical products operating in various parts of Tamil Nadu are circumventing the Drugs Price Control Order (DPCO) resulting in big loss to the retailers, sources in the industry alleged.
There are very few prosecution cases being filed against the wholesalers and most often they escape from punishments, sources further alleged.
But, the director of drugs control administration, M Abdul Khader, said 350 cases of violations have been initiated against traders including wholesalers upto 3.12.2014. However, he did not give the exact number of prosecutions filed against the wholesale traders.
According to DPCO norms, a retailer is entitled to get 16 per cent margin from the sale of a product. But it is alleged that the wholesalers in Tamil Nadu, especially those located in major centres like Chennai, Madurai, Trichy, Tanjore, Coimbatore and Salem are not following the DPCO norms. They are selling immense quantity of drugs according to their whims and fancies.
Moreover, certain incidents of opposite nature of this sort are also identified. For example, some painkiller ointment at a rate of Rs.80 MRP is sold to the retailers for Rs.20. The National Pharmaceutical Pricing Authority (NPPA) is not aware of this kind of drugs sales in Chennai, says an industry source.
M Rajendran, the former director of the regulatory department, said there is one group of wholesalers centered at Parrys, the heart of the city, and they are always untouched by the drugs control officials. The wholesalers are operating as an alliance of branded drugs traders.
He alleged that this kind of shirking the margins from the percentage fixed by the authority is occurred due to the apathy of the state level enforcement authorities. According to him, there are 7000 wholesalers operating across the state and they are grouped under various trade organisations.
“A retailer will sell the painkiller ointment, Diclofenac for Rs.80. Here, the VAT is not properly paid to the government. Though the retailers are entitled to get 16 per cent of the MRP, they are often exploited by the wholesaler. The appropriate margin is not always paid to the retailers. The DC department is going on filing prosecutions against the retailers only, not taking any action against the wholesalers, or even the manufacturers”, said the former drugs control director.
DPCO does not prescribe any margin for the wholesalers, but it has prescribed 16 per cent margin for retailers. Certain greedy wholesalers swallow the retailers’ margin and enjoy the benefits. It is not looked by the DCA as violation under DPCO, he added by saying that when he was the Director, surprise raids were conducted at the premises of the wholesalers and prosecutions were initiated. But now, no such surprise inspections are carried out anywhere in Tamil Nadu.
In Tamil Nadu, there are about 7000 wholesalers and about 42000 retailers were licenced to conduct drugs sales.