KOCHI: Retail medical shops in the state have joined hands to form a cooperative society to sell medicines at a discount of 10-40 per cent to customers in a move to protect their turf fearing imminent entry of big players into the business.
The Kerala State Retail Medical Shops Cooperative Society (Kremcos), formed last week, has already set up warehouses for drugs and chemicals in six major districts _ Thiruvananthapuram, Ernakulam, Kollam, Kozhikode, Kannur and Kottayam. It will soon open its warehouse in Malappuram district, said Kremcos president C M K Kurup.
Kremcos has also signed up 2,000 retail medical stores and plans are on to bring a majority of the 15,000 medical stores in the state under its umbrella over a period of time. ‘’This is our last-ditch effort to survive,” Kurup said. The society has started selling medicines at a discount of over 10 per cent in some parts of Kochi which will be extended to other regions in the coming days.
Industry officials reckoned that at least 5,000 retail medical shops have shut down business in the state in the last five years due to stiff competition from big players who can afford to provide medicines at a discount by buying drugs and chemicals in bulk.
Over Rs 3,000 crore worth medicines are sold in the state in a year compared to all-India sales figure of Rs 80,000 crore per year. Out of the Rs 3,000-crore annual business, 60 per cent of the sales are through hospitals’ outlets and the remaining 40 per cent through medical stores.
Sevena Medicals, a local retail chain, ever since its launch with a discount of over 10 per cent, has started to eat into the business of nearby medical stores and it is feared that entry of bigger players would sound the death knell for existing medical stores.
“There has been a substantial decrease in business for medical stores after the entry of Sevena Medicals,” said Ravi, a medical shop owner in Kochi.
Players which provide medicines at a discount, make life difficult for local players. Officials said they anticipate the entry of big corporate houses into the Kerala medical retail chain business. An official associated with Kremcos said there are attempts by All Kerala Chemists and Druggists Association (AKCDA) to thwart the move by local stores to procure the medicines in bulk directly from the pharmaceutical companies as it would hurt their margins.
“There are instances of AKCDA warning pharma companies of boycotting their products if they sell medicines directly to our cooperative society,’’ said the official.