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The Kerala Drugs Control Department will soon initiate a state-wide drive to remove deceptive discount boards displayed outside various medical shops offering arbitrary price cuts ranging from 20 to 90 per cent on medicines.
To execute the legal directive, drugs controller Dr K Sujith Kumar has issued a two-page circular to all Assistant Drugs Controller (ADC) offices and regional Drug Inspectors. Enforcement officers have been directed to strictly ensure that retail pharmacy outlets do not entice vulnerable patients through unverified or misleading discount claims displayed on hoardings, digital screens, and banners.
This administrative action directly follows a landmark verdict delivered by the Kerala High Court, resolving a decade-long tug-of-war between traditional standalone pharmacies and new-generation discount chain outlets in the state. Traditional chemist networks, spearheaded by the All Kerala Chemists and Druggists Association (AKCDA), including initiatives from its regional units like Palakkad, have persistently raised concerns against predatory display boards set up by fast-expanding discount chains.
In their formal petitions and representations before the government and the High Court, AKCDA maintained that displaying aggressive discount boards violates the core principles of the Pharmacy Practice Regulations, the Pharmacy Act, and national drug pricing guidelines issued by the NPPA. The association contended that standard retail chemists operate through ethical supply channels directly from manufacturers and distributors, making across-the-board rebates of 20 to 90 per cent commercially impossible without compromising quality.
Responding to regulatory concerns and court directives, the drugs control department stepped in to curb misleading promotional practices by framing stringent licensing conditions. The dispute escalated following a circular issued by the drugs controller on September 4, 2024, which mandated that all applicants seeking new retail drug licenses or renewals submit a mandatory sworn affidavit. Under this requirement, pharmacy operators were required to give a specific undertaking in their application files promising that they would not exhibit discount boards outside their retail premises.
Aggrieved by the department's move, a group of discount pharmacy owners and retail dealers challenged the circular before the High Court. The petitioners argued that neither the Drugs and Cosmetics Act, 1940, nor the Drugs Rules, 1945, restricts selling medicines below the Maximum Retail Price (MRP) or disclosing legitimate discounts to consumers. They contended that advertising discounted rates was a transparent commercial practice that directly benefited the public by lowering healthcare expenses, and alleged that the drugs controller had exceeded statutory powers by imposing an indirect ban on price concessions.
Dismissing the petitions filed by the discount retailers, the High Court of Kerala upheld the statutory authority of the drugs controller to impose reasonable licensing conditions aimed at curbing misleading promotional advertisements. Meanwhile, the drugs control department clarified that it is not against pharmacies giving genuine price discounts to patients, but displaying boards stating exaggerated or vague discounts should not be used as a promotional tool. The Court clarified that while trade regulations do not prevent pharmacies from selling medicines below MRP or offering genuine price cuts, retail operators cannot claim a constitutional right to display vague, exaggerated, or untruthful discount claims to lure customers. The judgment validated the licensing condition requiring applicants to explicitly undertake- "We undertake that we shall not display any discount boards containing misleading or vague claims regarding the price of drugs."
Following the court verdict, the fresh circular issued by Dr. Sujith Kumar makes the submission of this standardized undertaking compulsory across Kerala. New applicants must file the declaration in the prescribed Form A, while all existing licensees have been given a strict three-month deadline to submit the undertaking in Form B.
Welcoming the department’s enforcement action, AKCDA president A N Mohan and general secretary Antony Tharian stated that the association has issued formal notices to all its district committees directing their members to report non-compliant outlets to drug inspectors in writing and called on regulatory authorities to thoroughly verify the source, quality, and authenticity of heavily discounted drugs.
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