The pharmaceutical trade in south India is likely to boycott all the products of Pfizer Ltd from September 1. The traders from south are taking this step in protest against an agreement on trade margins between the All India Organization of Chemists and Druggists (AIOCD) with the Pfizer management on margins for the products of the erstwhile Parke -Davis, which was merged with Pfizer.
Phamabiz learnt that an office bearers meeting of the trade associations from the states of Tamilnadu, Kerala, Karnataka, Andhra Pradesh and Pondicherry, held at Guruvayoor in Kerala a few days ago, has taken a unanimous decision in this regard. These state bodies have also appealed to the AIOCD national body to revoke its decision.
According to informed sources, AIOCD national executive is learnt to have signed an agreement with the Pfizer management to fix trade margins inclusive of excise duty for all the de-controlled drugs of Parke Davis, during June, this year. Further, the executive also had decided to implement trade margin inclusive of excise duty for de-controlled drugs in the case of all the merged companies.
Trade sources in south India fear the move will create a wrong precedence in fixing trade margins, and the traders may lose more than one per cent margin in the process, as almost all the states in South India has excise duty of around 16 per cent.
A M Mohan, convener, South Zone of the traders in South India and N Anandan, general secretary of the Tamilnadu Chemists and Druggists Association declined to comment on the decision against the AIOCD national executive. However, they did not deny the move to boycott Pfizer products.
"We agree there is difference of opinion on this matter with our national body. It is natural to happen in the case of an organization having national presence and numerous members. Kindly do not interpret this as a challenge against our national body. We are only trying to correct a decision of our association, which is against our interests. We hope our national body will take it seriously and revoke it," said Mohan.
It may be noted that Pharmabiz had reported AIOCD took a decision during January this year to ask pharma companies to include the excise duty (ED) in the maximum retail price (MRP) while fixing trade margins for wholesalers and retailers. The issue was widely discussed among the trade circles when the traders in Kerala and West Bengal boycotted the products of Plethico Pharma for non-inclusion of excise duty in margins after the takeover of Plethico by Shreya. The traders' demands were met and the boycott was called off later.
Sources said at least five major mergers took place in the last few years, and AIOCD agreed for allowing trade margins inclusive of excise duty, when the respective companies approached the association. The southern traders feel the association has not taken into account the interests of a larger section of traders while entering into an agreement on this.
It may be noted that at present at least 75 per cent of the companies in the country offer commissions to traders exclusive of excise duty.
Reacting to the development, J S Shinde, general secretary of AIOCD said that the apex body would initiate severe action against the dissenting association members and state level organizations if they go ahead with the proposed strike without the consent of the national body. According to him, AIOCD is the national body of drug trading in India. If the state level associations decide to initiate strike against companies at their own will without our consent, then we will definitely take action against them.
"As far as the issue is concerned, AIOCD is still negotiating with the OPPI-IDMA as the companies demand to settle the issue at the association level. In the case of merged companies, our policy is no loss for the traders, and to maintain status quo in the case of trade margins," Shinde told Pharmabiz in Chennai.