Subhiksha is a big retailer in India with branches spread all over. It is supposed to be a big boon for consumers, with most items being sold at a rate lower than that available in neighborhood shops, something that will help the limited budgets of most lower and middle class families. Now let us consider the field of buying drugs from the neighborhood medical shop. Till now, all these drugs have been sold at the MRP mentioned on the drug (a little known fact is that the MRP is the maximum price at which the item can be sold – it can be sold for lower than the MRP); and then Subhiksha had the medical section where you could buy a drug or potion for lower than possible at the normal pharmacist. Given that the elderly are the ones most affected by drug prices, Subiksha would be the savior for many of our senior citizens. And then Subiksha has been complaining recently that their supplies of medicine has been getting choked because small retailers and even wholesalers are worried about the lower price of Subiksha:
MRTPC will probe if chemists, wholesalers and medicine distributors have been trying to pressurise drug firms against selling to big retailers. The wholesalers and distributors, who would lose if companies sold directly to retail chains, seem to be supporting chemists and have threatened to squeeze supplies to retailers. The retail chains which are yet to finalise tie-ups with manufacturers are sourcing drugs through distributors and are increasingly finding it tough to forge direct purchase agreements.
On his part, Subhiksha managing director R Subramanian said “Restricting supplies of medicines is illegal as they are essential commodities. We have been facing problems in many markets including Chandigarh, Pune, Mumbai, Bangalore and Ahmedabad. We have decided to take them to court, and have approached the high courts.” Subhiksha sells medicines at discounted rates from 624 outlets. As per law, wholesale distributors cannot deny to supply to retailers when they have stocks.
If such a restriction can be proved, then the MRTPC should take strict action. It’s brief is to take action against anybody doing a trade restriction or an unfair trade practice, and restricting medicine to a low cost supplier would be a crime.
