Kerala is heading for a serious drug shortage situation soon, as the wholesale drug traders in the state are continuing their strike following the failure of talks between the authorities and the traders, held on Wednesday.

The traders' demand is to collect tax at first point of sale based on MRP of the drugs instead of multiple taxation at different levels, if State Government is implementing VAT from April 1, 2005. The wholesale drug dealers stopped drug purchases since February 16, as reported earlier.

The All Kerala Chemists and Druggists Association (AKCDA) sources informed Pharmabiz that though the traders held discussions with the State Government officials, the traders were yet to get any confirmation in writing to implement collection of tax at first point of sale based on MRP of the drugs. The officials aver the decision has to come from the state finance minister level, though they are willing to accept the demand of the traders. Hence, AKCDA would continue the strike notwithstanding the state health minister's warning on severe action against the strikers, said sources.

Meanwhile, the state health minister K K Ramachandran said the government would take stringent action against the wholesale drug dealers if they fail to ensure adequate stocks of medicines in the retail shops. Assistant Drug Controllers have been directed to check the availability of medicines in retail shops. The government would arrest and prosecute the traders for not ensuring adequate availability of essential medicines, as drugs fall under the Essential Commodities Act. The government would also suspend the licenses of drug traders if they fail to oblige the provisions in the Drugs and Cosmetic Act, warned the minister.

Drug control officials in Kerala said the state has started to feel shortage of medicines, especially in the Malabar region. Currently, shortage is being felt in certain asthmatic drugs and insulin at small retail shops in rural areas. Though not severe at present, shortage would be felt in urban areas within a few days if the situation continues. Many of the traders had stocked adequate stocks for about one month or more before the strike, and hence major chemist outlets in the cities and towns are not feeling the shortage at present, elaborated the drug officials.

Kerala has about 1500 dealers, and about 250 of them account for 95 per cent of the drug trade in the state, valued about Rs 800 crore. Unlike most other states, drug traders in Kerala are united under one banner, the AKCDA, except for about 200 retail outlets including Government run medical shops.