The drug traders in Kerala are planning an innovative business model to offer costly cancer and AIDS drugs and select generic drugs to the public, by eliminating middlemen in the drug supply chain.

Soon the Kerala State Chemists and Druggists Association (KSCDA), the only medical shop owners association in Kerala, will float a new company Pharma Combines Kerala Ltd., with an investment of Rs.25 crore in the first phase, registered as a society. The company will procure cancer and AIDS drugs, besides high value generic drugs, directly from the manufacturers in bulk quantities and will supply it to the member chemist shops with a nominal margin. In the case of imported oncology and cancer drugs, the company will import it directly from multinational pharmaceutical companies, sources told Pharmabiz.

They said annually about Rs.100 crore worth oncology and AIDS drugs are sold through the chemist shops in Kerala, which has a drug market of about Rs 1200 crore annually. However, the actual drug sales in the state, especially in the case of oncology drugs are much higher than this, as many large-scale companies are promoting their drugs directly through specialists like oncologists, and sales through hospital pharmacies.

Since the patients lack adequate information on the cheaper version generics available, most of them rely only on the prescription and direction of their doctors to buy medicines. The new venture will not only eliminate the margins enjoyed by this nexus, but also offers the public access to life saving medicines at a reduced price.

Pharma Combines Kerala Ltd will have a membership of around 300 to 500 member chemists, as shareholders to the project. The company will also advocate its members to practice Good Pharmacy Practices (GPP) to take on the onslaught of mushrooming pharmacy chain shops.