The struggle for a profit

C Raveendran Nair and Amit Aravind run Jan Aushadhi stores in Thiruvananthapuram, just 4 km apart. The two have a similar experience to share — though the stores are well-intended, they make for poor business.

Nair, a retired Subedar from the Army, seems to have opened a new battle-front in the form of his outlet. He sells generic drugs at a fraction of the price charged by dispensers of branded ones. But being close to the Government Medical College does not help since patients get most of their medicines from the Karunya Pharmacy outlet run by the Kerala Government. Karunya has become a hit, dispensing branded drugs at discounted price.

There is also another problem. His pharmacist Sunil Kumar, explains: “As much as 80 per cent of the doctors do not prescribe generics, saying the latter don't have full potency, or contents are below par. Some customers have even returned their medicines.”

Aravind too finds himself in similar circumstances. Instead of setting up what would have been a successful medical practice, he plunged headlong into entrepreneurship. While he does make a ‘token profit,’ the business is surely not what he had hoped for. And he can't shut shop either, with his trusting, even though small clientèle, depending on him. Aravind has even chosen not to pursue his long-cherished dream to enter drug manufacturing.

Nair took a loan ₹3.90 lakh to set up the outlet. To pay the monthly interest costs and cover other overheads, he needs a turnover of at least ₹60,000 a month. But as of now, ₹60,000 is a distant target. “The simple maths is like this: If I have to make ₹1 lakh in income, I must do a business of ₹10 lakh, which becomes ₹30-40 lakh in terms of the prices the branded drugs command,” he explains.

Both, he and Aravind wish the Government pegsup the prices of generics to a third of the open market price. This is because simple-minded customers doubt the efficacy of an extremely low-priced drug. (a branded drug can be up to nine times more expensive than its generic cousin ).

Kumar, the pharmacist, is livid that few doctors write the generic names in capital letters, as mandated by the Government. “Just five per cent of the doctors write out the generic names, leaving pharmacists like me to search the net to find out the chemical names.”

There are other issues too. Kerala has just one distributor, in Ernakulam. Nair feels that the State should have at least three.

It's not that the outlets have been a complete failure. One ran into 70-year-old Sivasankara Pillai, a mason-turned-security guard with an ailing heart. He needs ₹4,000-worth medicine every month, and swears by the Jan Aushadhi program, which allows him to save ₹2,000 on diabetes, BP and cholesterol drugs.

Aravind, who claims to have started the first Jan Aushadhi outlet in Thiruvananthapuram, agrees with Nair that Jan Aushadhi is a ground-breaking idea. But the Centre's target of opening 3,000 outlets is a concern, especially given the highly competitive scenario in Kerala.

The State already has 287 Jan Aushadhi outlets.

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