Sandoz, Lupin in pact with AIOCDL

Written by Reghu Balakrishnan | Mumbai, Aug 27 | Updated: Aug 28 2008, 06:01am hrs
All Indian Origin Chemists and Distributors Ltd (AIOCDL), which has five lakh chemists as members, entered into alliances with generic major Sandoz and Mumbai-based Lupin Ltd to distribute their respective drugs last week.

AIOCDL is learnt to be in talks with Aventis and Novartis to enter into similar agreements. As reported by FE earlier, AIOCDL had entered into an alliance with Mumbai-based Maneesh Pharma. AIOCDLs signing a series of exclusive distribution tie-ups with drug manufacturers has intensified the battle among pharmacy retail chains in the country.

As per the deals, a few of the leading drugs of each firm will be sold exclusively through newly appointed distributors of AIOCDL. In the deal with Maneesh Pharma, drugs manufactured by the company will be channeled through AIOCDL warehouses to each chemist.

The deal with Sandoz for distributing about 14 drugs including leading anti-TB brands was signed last week between J S Shinde, general secretary, AIOCDL and Rajiv Alex, head, global TB and API business, Sandoz Pvt Ltd. Lupin Ltd signed on AIOCDL for distributing about 15 drugs exclusively. AIOCDL is learnt to have appointed 25 distributors across the country to collect and supply the drugs to chemists. Nagpur will be the head of all distributions. Lupin officials could not be reached for comment while Rajiv Alex of Sandoz refused to comment.

However, Anil Navandar, joint secretary, western zone, AIOCDL confirmed the deal saying, There are more companies in talks with AIOCDL to enter into alliances for drug distribution. He refused to divulge the details of the deals.

A source close to the development told FE, The advantage for AIOCDL is the higher margins they can earn by cutting down number of distributors. However, chemists under AIOCDL can substitute these respective drugs for doctors prescribed drugs due to higher margins offered to them. Though the drugs have the labels of well known MNCs, patients and doctors will not object the substitution.

According to experts, the move of supplying to exclusive distributors of AIOCDL will likely hit other retailers such as Medicine Shoppe, Subhiksha, Medplus and Apollo. If the distribution for leading drugs relies entirely on AIOCDL distributors, other pharmacy chains may face a shortage of the respective drugs.

However, the officials of pharmacy chains do not see any possible difficulties with the AIOCDL move. MC Kini, CEO, LifeKen, a Bangalore-based retail pharmacy chain, told FE, As of now, we dont think of any adverse impact due to such alliances. Currently, only 3-4 companies have tied up with AIOCDL and the drugs distributed through them also remain few. Also, any of the major companies are yet to enter such kind of alliances.

AIOCDL is Indias largest drug retailing company, formed by the All India Organisation of Chemists and Druggists (AIOCD).