UP drug traders in a tight squeeze

The future of over 150,000 drug retailers and bulk dealers in UP is hanging in the balance.

This is because an order has been issued by the UP High Court directing the UP government to cancel the drug licences given to medical stores in the state by chief medical officers between April 12, 1989, and March 16, 2001, because of "non-compliance with licensing norms".

According to UP health department officials, the High Court had recently passed an order after hearing a case of public interest litigation filed by environmentalist D K Joshi, and directed the UP health secretary to ensure that the drug licences issued during the period stated were cancelled and the authority of the licence-holders to sell medicines revoked.

According to health authorities, this decision may have a wide-spread effect on the medical trade in the state, where medical shops operating with licences issued during this period were a majority among the number of medical shops in the state.

Conservative estimates show this loss to be Rs 80-90 crore a week, as in Agra alone, out of the almost 2,000 medical shops operating currently, 1,147 medical licences had been issued during the period mentioned by the High Court in its order.

Health officials say in the Agra region, 4,105 drug licences were issued by chief medical officers of Agra, Aligarh, Firozabad and Mathura in the 1989-2001 period, of which, 1,147 licences were issued in Agra, 1,589 in Aligarh, 632 in Firozabad and 737 in Mathura.

And a major part of these drug licences consisted of those issued to retail chemist shops, which constituted the bulk of the medicine trade in the region, and cancelling these licences could pose serious problems for the health department.

Talking to Business Standard, the chief executive, Lexica Drugs & Formulations Pvt. Ltd, Digamber Singh, said the drug-marketing companies were not opposed to the court's decision but though this decision did not include stockists, it could certainly affect the drug trade in the state, where most of the trade was dependent on these retail shops.

He said in Agra, one of the largest drug retail markets in North India, the drug retail business grossed over Rs 100 crore a month and the reduction in the number of retail shops by more than half could definitely mean a reduction in business.