Post GST, pharma sales dip by 30 per cent

Talking to DT Next, M Kalaiarasu, a leading wholesaler in the area said, “Drug sales have slumped by 30 per cent due to resistance by the public to paying GST.” Vellore district has 6 major wholesalers, 25 minor wholesalers and 500 retailers, who meet the needs of the district’s private hospitals and individuals through counter sales. Government hospitals and patients who frequent this facility do not face this issue, as government hospitals meet their needs from the district drug warehouses, while patients are provided medicines at subsidised rates.

However, it is a totally different issue with private hospitals. “Even a major hospital like the 2,700- bed CMC, which earlier used to place orders running into crores of rupees, now purchases drugs in batches,” he said. “Another issue is that unlike in a hotel where customers see the GST tagged to their bill only at the end of the meal, when purchasing drugs for minor ailments, customers first ask for the GST and if they feel it is high, refrain from purchasing them,” added KJ Devarajan a retailer.

This has led to retailers now buying medicines in limited quantities unless they are sure the stock will be sold out soon. “This could create an unnecessary shortage of drugs” Kalaiarasu added.

Wholesalers face another GST related issue. While prior to GST implementation, they purchased drugs at 5 per cent VAT, such stock can now be sold only if GST is paid. “As this has a slab which ranges from 12 per cent to 18 per cent and even 24 per cent for exotic drugs, we have been haggling with drug companies to help us out of this morass,” he said.

The issue is that some companies are willing to help out while others want to play a waiting game, which affects stocks nearing their expiry dates, sources said.