AHMEDABAD: Next week onwards, there are high chances of a medicine shortage in the market, according to estimates by Gujarat State Federation of Chemists and Druggists Association (GFSCDA). Chemists and druggists have been mulling over reducing their inventories for some time due to anxiety about reduction in margins, as there is lack of clarity about input tax credit. Stockists and even retailers therefore want to avoid double taxation and want to embrace GST with a fresh start, thus keeping their inventories to the bare minimum level. "After June 15, chemists will keep their inventories to the bare minimum and that may cause a temporary shortage of medicines and drugs in the market. The effect will be visible around June 20 and will remain until there is enough clarity," said Jashvant Patel, president, GSFCDA. What is even more alarming is the sharp reduction in the average inventory days of top 100 pharma companies, from 40 days to 27 days, according to data by All India Organization of Chemists and Druggists (AIOCD)-AWACS, the market research wing of AIOCD. Estimates suggest that the first week of June saw a significant decline of 13 days in the drug inventory at the stockist level. This has raised fears of possible drug shortage soon after GST implementation. "An average of 27 days' inventory is more than adequate to service the market and there is not even a remote likelihood of a shortage of medicines at the retail level," assured Ameesh Masurekar, director, AIOCD AWACS. However, countering this, GSFCDA officials claim that the inventory days are further likely to go down to 13-15 days in the coming week. Since retailers are cutting down their inventories, the overall inventory maintained by wholesalers too has reduced. Even the primary sales of manufacturers are likely to get affected. Speaking about this, Viranchi Shah, president, Indian Drug Manufacturers Association (IDMA) - Gujarat chapter, said, "There may be a short-term impact and therefore, we've asked manufacturers to close their monthly targets for June by 25th of the month, so that there is enough time for it to reach the supply chain and thus reduce ambiguity." AIOCD experts claim that due to a reduction in inventory from 40 days to 27 days at stockist level, a lot of in-transit stock would have reduced and this would have negatively impacted the primary sales of most companies in the month of May.
(Courtesy: http://timesofindia.indiatimes.com/city/ahmedabad/medicine-shortage-likely-after-june-20/articleshow/59118146.cms)