The pharmaceutical wholesalers in Kerala have warned that the government’s new initiative to procure drugs directly from the manufacturing companies will create a situation of shortage of drugs in the state, especially in rural areas.

According to both the warring distributor bodies, AKCDA and AICDF, the government can no longer make adequate supply of medicines for the entire state channelling through the 75 outlets it is planning to set up. They said they welcome the move of reducing prices, but avoiding wholesalers and retailers from the project will create problems.

In a meeting called by the Chief Minister in association with health department in last week, it was decided that government would directly purchase drugs from the companies and sell through the outlets of Neethi Medical Stores, Maveli Medical Stores and the pharmacies run by hospital advisory bodies after deducting 25 per cent commission given to wholesalers and retailers.

The government had not invited any member of the association for the meeting and strictly warned that if any association tried to thwart the government’s initiative to sell essential medicines on a discounted rate of 25 per cent, such associations will be handled strictly. The chief minister Oommen Chandy and the health minister Adoor Prakash have openly declared the government’s decision in the meeting.

But according to sources, some of the major companies attended the meeting raised concern over avoiding distributors and asked if the wholesalers threatened the companies for reaching agreement with the government, the chief minister assured them that he would give all support and if needed seek support from central government.

Speaking to Pharmabiz, the secretaries of AKCDA and AICDF, Antony Tharian and K Sivasankaran said the government cannot make a long standing distribution system superseding the 14000 retail outlets in the state. They said even now there are shortages of medicines in many villages. The retailers are getting a credit period of three months from the distributors and the companies supply medicines to a distributor on some contract which has been continuing for long. Then how can a private company from far off state trust fully a government on its returns, they asked.

Now Kerala has, despite some problems in the associations, business disciplines and trade ethics. If government continues with its new drug policy, it has to find solutions for the crisis in which the wholesalers’ community is going to plunge. The leaders added that government was taking advantage of the problems in the trade body. Further, if the companies supply their products to the government agencies on a price less than what is given to the companies, then the distributors will also demand products on the same rate, said Antony Tharian.

Following the decision of the government, wholesalers in northern Kerala are planning to form an association of their own viewing an imminent danger for their existence. Meanwhile, a group of retailers favouring the government has formed another association with a view to expel the wholesalers from AKCDA and expressed willingness to sell the drugs on rates fixed by the government.