All India Origin Chemists and Distributors Ltd (AIOCDL), a company in which over 90% of the country’s pharmacy owners and drug wholesalers are shareholders, has sewn up deals with 12 pharmaceutical companies to handle their distribution, warehousing and logistics functions according to sources in the company.
“We are currently negotiating with others,” they added. The company wants to enter into a similar arrangement with the 80 top pharmaceutical companies in India. Between them, these companies account for 90% of the total sales of medicines worth Rs42,000 crore every year.
As has previously been reported, AIOCDL was an initiative by an association of pharmacy owners and drug wholesalers to pre-empt the entry of organised retail into their business. It chose to do this by getting into organised retail itself.
All members, around 500,000 of them, became shareholders in the company that was created from the association. The company represents them in transactions with drug firms. Now, it is offering to take care of key supply chain functions for the latter.
While the sources refused to divulge the names of the companies with which AIOCDL has struck deals, several companies that Mint spoke to on the subject refused to comment on the development.
On condition of anonymity, however, several of them welcomed such an arrangement.
Dealing with AIOCDL means they now have to deal with just one entity for the entire drug trade. Better still, they can expect to reduce costs by allowing AIOCDL to take care of their logistics and warehousing needs.
While AIOCDL itself will handle these functions, it is in the process of creating 36 region-specific subsidiaries that can take care of the front-end. The first of these, Maharashtra State Chemists and Druggists Ltd, will start operations by April, according to this subsidiary’s treasurer, Vijayant Jagushte.
AIOCDL is also talking to consumer goods companies such as Hindustan Lever Limited and Procter & Gamble to source their products. “Sales of over the counter and consumer products already account for about 15-20% of our member shops’ total revenue,” said Jagushte.