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The annual general body meeting of the Tamil Nadu Pharmaceutical Distributors Association (TNPDA), held last week in Kochi, proved to be a critical session focused on the existential threats facing the sector.
A total of 175 pharmaceutical distributors from across Tamil Nadu attended the event in Kochi. It was the first time the TNPDA organized its annual general body meeting outside Tamil Nadu. The AGM was preceded by a pre-AGM meeting on the previous day, where Dr. Harish Kumar from Kochi conducted a motivation class for the attending members.
The main AGM was structured into three distinct sessions. In the first session, the members agreed on a key resolution, presented by organising secretary V.G. Somasundaram, demanding that major drug manufacturing companies stop supplying medicines at differential rates, lower rates to hospitals and higher rates to distributors. The resolution emphasized that manufacturers supplying directly to hospitals, often with large discounts, severely undermines the conventional distribution structure.
The association decided to formally write to the companies to stop this discriminatory practice. They issued a stern warning that if the manufacturers fail to comply, the association will escalate the matter to the National Pharmaceutical Pricing Authority (NPPA) and the Competition Commission of India.
The meeting's second formal resolution was presented by the trade body's president, C. Chidambaram, who raised a demand concerning product returns. The resolution highlighted that many manufacturing companies are not taking back returns from distributors even when the products are well before their expiry dates. The association resolved to formally demand the returns and warned that they would proceed to take legal action against defaulting manufacturers if the demand is not met.
A third resolution, again presented by V G Somasundaram, was directed at the NPPA. It demanded an immediate increase in the current profit margins for both wholesalers and retailers. Somasundaram argued that the low prevailing margins of 8 and 10 percent for wholesalers and 16 and 20 percent for retailers are no longer sufficient to cover the rising costs of business operations, including employee salaries, room rent, electricity charges and taxes.
Beyond the resolutions, a separate session was dedicated to the Pharma LLP project. A N Mohan, chairman of the Poonam Pharma LLP in Thrissur, delivered a lecture explaining the new business model as a survival strategy.
The organising secretary told Pharmabiz that the member-distributors were highly encouraged by Mohan's speech and are interested in adopting the LLP model, but they have no immediate plan and will only consider implementing it if future circumstances and market pressures require it. The afternoon session of the AGM concluded with discussions on the present crisis, covering pressing issues such as GST issues and strategies for the promotion of business.
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