It’s not just politics that makes for strange bedfellows. Adversity would just as well—a fact that players in India’s pharmaceutical industry have had no choice but to come to terms with. The events of the last couple of years have culminated, in April 2021, in the quiet acquisition of two companies—market research firm AIOCD Pharmasofttech AWACS Pvt Ltd and business-to-business healthcare tech platform Pharmarack Technologies.
On the surface, the deal is an unlikely one. The entity that acquired these two companies, DigiHealth Technologies, isn’t just a company that offers tech and marketing solutions for pharmacy chains. It’s a consortium of Indian drug makers that includes majors such as Sun Pharmaceutical Industries Ltd, Cadila Healthcare Ltd, Lupin Ltd and Torrent Pharmaceuticals Ltd among others.
In addition, AWACS is a joint venture between pharma distribution company All India Origin of Chemists and Druggists Ltd (AIOCD Ltd), and Mumbai-based market research agency Trikaal Mediinfotech. In short, it’s a union of pharma retailers, distributors, and pretty much everyone else that could possibly be a part of the drug distribution system in India.
These two entities—pharma companies and retailers and distributors—have traditionally been opposite sides of the story. The former wants a slice of the distribution pie, and better profits, while the latter wants better margins.
In fact, the All India Organization of Chemists and Druggists (AIOCD; not to be confused with AIOCD Ltd)—an organisation of distributors—has threatened threatened ET Retailers, Pharma companies fail to agree Read more to boycott drug makers that do not offer a combined total of 30% margins (10% for distributors and 20% for retailers) despite the government’s orders to cap the prices of drugs. AIOCD’s members currently comprise around 11,000 distributors who supply to about 300,000 retailers.
In 2014, the CCI CCI Competition Commission of India The CCI is a statutory body that's responsible for enforcing The Competition Act, 2002 and promoting competition throughout India. It also has a mandate to prevent activities that have an 'appreciable adverse effect' on competition in India even fined fined Bangalore Mirror Chemists' body fined Rs 50 crore Read more the AIOCD Rs 50 crore ($6.6 million) for dictating terms to pharma companies on pricing and distribution. Over the last four years, AIOCD has filed several court cases against against The Ken How e-pharmacies escaped death, survived & turned the tables on their opponents Read more e-pharmacies that offer discounts on medicines and threatened threatened The Print Angry chemists threaten to boycott Cipla products if it ventures into e-pharmacy business Read more to boycott drug makers like Cipla who were interested in working with them.