The Maharashtra State Chemists and Druggists Association (MSCDA) is understood to be violating some of the key provisions of the Monopolies and Restrictive Trade Practice Commission (MRTPC) by indulging in unfair trade practices, according to a group of revolting traders in the state.

The sources said that one such practice the MSCDA is indulged in is taking fees from pharma companies in the name of product information service (PIS). Without paying this charge to the Association, the pharmaceutical companies cannot launch their new products in the market. Retailers do not take the stock of the products unless the company produces a certificate from the Association. This in effect restricts the free access of the new medicines to the customers and thereby violates provisions of MRTP Act.

On an enquiry made by a trader in Nasik under Right to Information Act (RTI) 2005, the office of the commissioner of service tax, Mumbai, has clarified in 2007 that the Association had to pay more than Rs 59 lakh as service tax to the government on PIS under the category of 'Business Support Service' for the period from May 1, 2006 to March 15, 2007 and Rs 2 lakh for the period from March 16 to March 31, 2007. The sources said that the pharmaceutical companies are forced to pay PIS fee fearing non cooperation by the members of the Association.

The pharma traders rebelling against the activities of the MSCDA leadership, under the new banner the Maharashtra Pharmaceutical Chemists and Distributors Association (MPCDA), informed that the flock will soon call for severe action from the state government. The government of Kerala had recently taken action against the unfair trade practices of the All Kerala Chemists and Druggists Association (AKCDA). The Kerala government has came down heavily on the illegal trade practices of some of the AKCDA members and has ordered to blacklist the pharmaceutical companies who make payments for Product Information Certificate (PIC) fees to the association.

However, the MSCDA officials denied any illegality in providing PIS, as it is taxed under the service tax norms. "We are providing the PIS as an ancillary service for the pharma industry and are paying service tax to the Central government. If we are providing service which is illegal, it is the pharmaceutical companies who should complain. And they should file a case against us and let the court decide whether we are wrong. And if we are wrong, we will correct it," said J S Shinde, president, MSCDA told Pharmabiz.

Allegations are also made against the Association's control in appointment of stockists which is normally an arrangement with the company and the individual wholesalers. Currently the companies can appoint stockists only with the consent of MSCDA, which again is a violation of freedom of trade in the country, say the rebel traders.