No new traditional retail shop opened in TN during the last five years due to mushrooming of chain pharmacies

No new traditional retail shop opened in TN during the last five years due to mushrooming of chain pharmacies

Posted on October 15, 2024 Updated on October 13, 2024

Concerned over the pathetic condition of the traditional medicine retailers in Tamil Nadu, the veteran pharma trader and former president of the Tamil Nadu Chemists and Druggists Association (TN CDA), Mannargudi Ramachandran, has commented that no new registered pharmacist in the state is coming forward to open individual pharmacy shops because of mushrooming of corporate chain pharmacies, pharma co-operative societies and government-sponsored generic stores.

In the last four years’ period, the state witnessed a closure of about 500 traditional medical shops because of loss in business. However, the number of chain pharmacies and pharma co-operative societies has gone up putting the conventional traders in trouble, he observes.

In a telephonic interview with Pharmabiz in the aftermath of the state conference of the state chemists and druggists’ association, he said in the last five years’ period there was no increase in the number of new medical shops by individual pharmacists. But, the number of chain pharmacies, discount pharmacies, doctors’ clinics, pharmacies of co-operative societies and Jan Aushadhi Stores has increased in large scale.

Pointing to the competition in the market, Ramachandran said the traditional retail chemists are struggling to run their businesses. They face threat from corporate pharmacies, government-sponsored generic stores, chain pharmacies, doctors’ clinics, medical shops run by co-operative societies etc. As per government norms, the traditional retail shops in Tamil Nadu cannot sell generic medicines and even the wholesalers of the TN CDA do not supply generic medicines to the traditional retailers. They supply generics to the government shops. From the sale of branded medicines, the traditional retailers get only 16% commission. Out of this, they have to pay the rent, electricity charges, salaries to employees etc. One after another, co-operative society’s pharmacies are emerging. He said there are 700 medical shops run by co-operative societies in Tamil Nadu.

“The government is going to launch one chain pharmacy for generic medicines, Mudhalvar Marundhagam, very shortly. There are Amma Marunthagam, Pasumai Pharmacy, Apollo Pharmacy, Medplus and a lot of others. All these come under co-operative societies and sell medicines at discount rates. Besides, there are central government sponsored Jan Aushadhi Stores. These chain groups sell generic medicines, and branded ones on discounts. In the middle of these big sharks, the traditional retailers are struggling hard and they cannot do their business. Because of loss and no business, about 400 to 500 medical shops were closed down in Tamil Nadu in the last four years”, he told Pharmabiz.

He pointed out that, unlike other products, the drug traders cannot sell medicine at a higher rate. Majority of the branded medicines are coming under price control and their MRPs are fixed. The latest phenomenon in the trade sector is that the sales are decreasing and the expenses are increasing. Most of the medical shops are run in rented rooms. There are additional expenses like electricity charges, transportation charges, tax payments, salaries to employees etc. All these become a big burden for the chemist to run the business. In addition to this, there is additional expense due to the banning of drugs by the government. Although the traders can return the banned drugs to the manufacturers, it is also done at the expense of the traders.

He said the marketing companies purchase medicines directly from manufacturers and supply them to the doctors’ clinics. This is the latest threat faced by the traditional pharma traders. He alleged that a lot of doctors run pharmacies attached to their clinics and sell medicines to the patients though there are retail medicine shops operating in the vicinity.

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