TN govt launches low-cost drugs

Experts say the concept's success hinges on various factors including the format of stores and the quantum of stocks they build

After introducing canteen, water and salt under the brand Amma, the Tamil Nadu government has launched Amma stores for selling essential drugs.

These state-run stores will offer branded medicine 10 per cent below the market price. Chief minister J Jayalalithaa today opened 10 such stores in seven districts at a cost of Rs 1 crore.

These are located in Nanganallur near Chennai, Kancheepuram, Cuddalore, Erode, Sivaganga, Salem, Madurai and Virudhunagar. In the long term, the state plans to set up 100 such pharmacies.

In the 2013-14 Budget, the state government has earmarked Rs 20 crore Price Stabilisation Fund for running these pharmacies.

The state will use the cooperative network to stock up the branded medicines bought in bulk from companies at a marginal discount. However, there is no clarity how the state would source the medicines.

The state government's initiative comes at a time when the Centre is trying to bring more drugs in the $15-billion Indian drugs market under the price control regime.

Experts say the concept's success hinges on various factors, including the format of stores and the quantum of stock it builds.

“If they do not have enough inventory, they could not succeed,” said a senior industry representative, who noted the Centre earlier tried to source generic medicines and sold it to common people without any margin, but failed.

A similar initiative was also tried by the West Bengal government, which again failed.

KK  Selvan, president of the Tamil Nadu Chemists and Druggists Association, which has around 22,000 retail pharmacy members across the state, hailed the move stating it would help the poor.

According to him, patients could purchase a drug combination selling at Rs 10 in the open market for at least Rs 6 in Amma pharmacies.

The association earlier was opposed to retail chains such as Apollo Pharmacy and Medplus offering 10 per cent discount to customers on the purchase of medicines. Officials from these organised pharmacies were not available for comment.

However, he expressed optimism the small medical retailers could survive the challenge posed by the sales of Amma pharmacies. He recalled in the past they were able to overcome the sales drop due to the organised sellers.