1. GST rollout: Slowdown in stocking reported by the pharmaceutical sector, possibility of drug shortages nil

GST rollout: Slowdown in stocking reported by the pharmaceutical sector, possibility of drug shortages nil

GST Rollout: The One Nation One Tax, GST was launched on June 30 on the stroke of midnight by the Narendra Modi-led NDA government in the Parliament.

By: | New Delhi | Published: July 1, 2017 5:09 PM
GST, GST rollout, One Nation One Tax, GST launch, goods and service tax, Narendra Modi, nda government, All Indian Origin Chemists & Distributors, AIOCD, pharmaceutical sector, gst news GST Rollout: While the Goods and Service Tax is now in action, sectors across the nation have their own concerns over the effects of the new tax regime. (photo: Reuters)

GST Rollout: The One Nation One Tax, GST was launched on June 30 on the stroke of midnight by the Narendra Modi-led NDA government in the Parliament. While the Goods and Service Tax is now in action, sectors across the nation have their own concerns over the effects of the new tax regime. As far as the pharmaceutical sector is concerned, the slowdown in the stocking of inventory is already visible. All Indian Origin Chemists & Distributors (AIOCD) explained the situation by saying, “The updated status of inventory days as of June 28… is a dip of 5 days in the last one week. This means primary sales from company to the distributor is negligible. Overall inventory days (including in-transit stock) at month-end are generally 40 days, which has dipped to 17 days. This means a 23-day sales loss over May and June in primary sales (assuming no billing in the last two days — June 29, 30). Due to this inventory lowering, primary sales would have dipped by approximately 50 per cent or more for most pharma companies for the month of June.”

Further while clarifying the concerns of the consumers over drug shortage, AIOCD said, “Apart from 17 days of stockist inventory, there are two weeks of retail inventory – so possibility of drug shortages are nil and all brands of medicine are available in adequate quantities for consumption, as quoted in an Indian Express report.”

Dhaval Shah, co-founder of online pharmacy PharmEasy while talking about druggists de-stocking their goods on account of loss in margins on their existing inventories said, “The manufacturing companies have said that products purchased before GST might not be taken back after the GST rollout. Hence, a few vendors are apprehensive of a loss due to inventory and have de-stocked. Vendors like us who are confident of sales have nothing to worry about… We have rather stocked up inventory in the last two-three weeks.” He added, “We generally keep 30 days of inventory across the country. We have bought it up to 40 days to ensure that customers do not feel the brunt. We anticipate that a few products might be missing from the market, we do not want our end-users to suffer. So we have stocked up.”

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