CHENNAI: This financial reality of the government’s medical welfare scheme could be a bitter pill to swallow.
Nearly 14 months after their launch, a majority of the 1,000 Muthalvar Marunthagam (Chief Minister Pharmacies) operated by the Cooperation department are incurring financial losses. While only about 10% of the outlets are earning marginal profits, the remaining 90% are struggling to generate enough revenue to cover their monthly operating expenses.
Despite offering generic medicines at discounts of 20% to 80% and other medicines at prices 15% to 20% below prevailing market rates, the pharmacies have failed to attract a steady customer base. This trend is evident not only in Chennai but also in district headquarters and other parts of the state. Stakeholders have called for a revamp of the scheme, suggesting that the pharmacies be integrated with mini-clinics or hospitals so they can serve more patients and improve their financial sustainability.
Officials from the Cooperation department said that the union government’s Jan Aushadhi pharmacies became profitable only after seven years of operation. “It takes time for people to recognise the benefits of such pharmacies. We are also relocating outlets based on public patronage, and the scheme is currently being implemented across the state,” an official said.
A section of stakeholders told TNIE that the Chief Minister (CM) Pharmacies were launched with the objective of reducing medical expenses for poor and middle-class families, rather than operating as a self-sustaining business model.
However, they pointed out that the pharmacies continue to face challenges due to supply chain disruptions, severe shortages of high-demand medicines, and poor footfall due to lack of guaranteed customer inflow.
“When a patient walks away empty-handed because a common antibiotic or blood pressure tablet is unavailable – even once – they are unlikely to return. The affordability of the medicines becomes irrelevant if they are not available,” said a pharmacist.
A regular customer from Anna Nagar shared his experience: “A few months ago, I purchased diabetes medication for my mother from a CM Pharmacy for two weeks. Since she responded well to the tablets, I returned the following month to buy the same medicine, but the pharmacist told me it was out of stock. I was then forced to switch back to the more expensive branded medicine.”
SR Venkatesan, a former Joint Registrar of the Cooperation department who took voluntary retirement, suggested that the state government could consider establishing mini-clinics attached to CM Pharmacies and other cooperative-run medical outlets. “Such an initiative would benefit both the public and the cooperative institutions,” he said.
A cooperation department official said, “We have instructed pharmacies to place online orders for out-of-stock medicines so they can be procured and delivered to consumers. Any major changes to the functioning of CM Pharmacies will depend on government policy decisions.”
H Krishnanunni, Managing Director of the Tamil Nadu Medical Services Corporation (TNMSC), the nodal agency responsible for the centralised procurement of medicines, stated that the corporation supplies drugs based on the requirements communicated by the Cooperation department.
“According to our records, there has been no shortage of medicines supplied to the pharmacies. Any requests received for medicines are being fulfilled through our warehouses,” he said.
Of the 1,000 CM pharmacies in the state, 500 are operated by the cooperation department, while the remaining 500 are run by entrepreneurs who received a subsidy of Rs 3 lakh from the state. In addition, the department also operates 132 Amma Marundhagams and 248 cooperative medical shops, taking the total number of government-supported pharmacies to 1,380.
Fact file
Around 1,000 CM Pharmacies were launched last year
They offer 20%-80% discounts on generic medicines
Other medicines are available at discounts of 15%-20%
Only 10% of the outlets are operating at a marginal profit
Shortage of high-demand medicines, and low customer footfall major concerns
