The Manipal Group of Companies, the latest entrant into India’s fast-growing drugs retail business, will sell medicines at prices less than half the current market rates as part of a strategy to gain momentum in a market increasingly getting crowded by organized retailers. The group has a presence in health care and education.
The Rs1,300 crore group, which announced on Tuesday plans for its “Cure & Care”—branded chain to retail pharmaceuticals, said it would buy medicines including over-the-counter (OTC) and prescription drugs such as common antibiotics from contract manufacturers and sell them under its own brand.
Although this is common practice among retailers in the West such as Walgreens, CVS and Rit-Aid, this will the first time an Indian pharmacy chain will be doing this.
The drugs will be sourced from US Food and Drug Administration-certified units in India. “In Karnataka alone, there are three such units and we aim to enter into an agreement as soon as we have a chain of at least 10 stores to stock these own-label drugs,” said Ranjan Pai, chief executive of the Manipal Education and Medical Group. The Cure & Care chain will grow to 50 outlets in four years, starting with one each in Ahmedabad and Bangalore in July.
The pharmacy trade in the country generates an estimated business of Rs32,000 crore, apart from about Rs18,000 crore accounted for by hospital pharmacies. Companies such as Fortis Healthworld, Reliance Retail, Reliance Health Venture (part of the Anil Ambani group) and multi-format retailers including Pantaloon and Subhiksha are among the major contenders for a share of this growing business dominated by about half a million pharmacists until now.
Analysts said the Manipal retail effort was too small in scale to make an appreciable difference in the drugs retail market. “To significantly impact the drug pricing structure, the Manipal group will need to have a larger network, significantly more than the 50 outlets that they are planning for in the next four years,” said Raman Manglorkar, head of the retail practice at consultant AT Kearney.
The outlets will offer medical services including consultation for diabetes, hypertension, cardiac and gynaecological care, as also cosmetology, paediatric care and vaccination services. Alternative medicine may also be offered at the outlets. Insurance policies in partnership with ICICI Lombard will also be on sale at the stores, said Pai.