KOCHI: Eyeing a share in the Rs 5,000-cr-strong pharmaceutical market in Kerala, which contributes close to 10 per cent of national sales, big retailer brands such as The Medicine Shoppe, Apollo Pharmacy and Manappuram Health Care are planning to enter the state in a big way.
Projecting better ambience and cheaper rates as their USPs, these groups have the capacity to be a gamechanger in the market, which is now controlled by the 15,000 strong traditional medical shops across the state. Apart from Sevana Medicals and Arogya Medicals (MG Medicals), which sell at discounted rates, pharma chains are not currently present in Kerala.
Industry experts point out that the profit margin in drug sales ranges from 10-40 per cent which is the major attraction for the new entrants. The Medicine Shoppe pharmacy chain, a venture of USA Cardinal Healthcare, is run by UAE based VPS Healthcare Private Limited, which got the franchise rights for UAE and India. It started its first outlet in March 2013 in Kochi. The company is looking to expand in Kozhikode, Kochi and Kollam.
Manappuram Health Care which has pharmacy outlets in Valappad in Thrissur and Kochi has plans plans to open outlets in other districts. Apollo Pharmacy is yet to finalise its Kerala plans. “At present Medicine Shoppe has two shops in Pune and is looking for properties in Bangalore, Hyderabad and Kerala for immediate expansion. Our current focus would be south India, western Maharashtra and north India. Kerala is a good market for drugs as it contributes to 12 per cent of the total sales in the country.
We provide exceptional customer care and give health-related information. Services like free eye testing, random sugar check, BP checkup are also planned,” said P Rajendran Naidu, Head- India Operations, The Medicine Shoppe. VPS Healthcare is headed by Dr Shamsheer, who is the sonin- law of Lulu Group Managing Director M A Yusufali. The total retail medicine market in India is worth Rs 45,000- Rs 50,000-Cr.
Sale of antibiotics, analgesics, nutraceuticals and tranquilisers account for 75 per cent of the Kerala market. Dr Sumitha Nandan Jayasankar, director, Manappuram Health Care, said that the group will start its new shops in Kerala in the immediate future. “We will provide drugs 10 per cent cheaper than the market rate.
For the people belonging to BPL category we will provide reduction again on MRP. In two years we will expand pan-India,” she said. Apollo Pharmacy officials declined to comment on the development. Till last year, All Kerala Chemists & Druggists Association (AKCDA) called the shots when it comes to introduction of new pharmaceutical products in the state. The association insisted on fixed trade margins, meaning no medical retailers were allowed to reduce the price.
Last year, the Competition Commission of India (CCI) slapped a penalty on AKCDA after it found that the association was resorting to unethical practices. This ruling paved the way for big brands to enter Kerala market.