Demonetisation has had another side effect - patients are stocking up medicines for the next two to three months. This is especially so for ailments where life-long mediations are required such as for diabetes or hypertension - called chronic therapy areas in medical lingo.
As a result, some of the pharmacies have seen sales pick up. "There have been days when sales have doubled than the usual in some of our stores," says Dr Madhukar Gangadi, founder of the MedPlus chain of pharmacies. It has 1,400 stores mainly across nine states and he says, going by the current trends, overall, he says, the sales during November could be up by 10 to 15 per cent compared to previous month. "But then, it would also mean sales in the following months could see some decline. So, the net impact may not be negligible." Whenever taking the old notes, the pharmacy chains like MedPlus are typically seeking customer ID such as the PAN card details in cases where the bill amounts are higher than say Rs 5,000.
The share of nature of medicines sold (chronic or acute - which is for ailments like cold, cough, pain or infection) could vary from one pharmacy to the other. In case of MedPlus, chronic therapy drugs constitute about 60 per cent of their total drugs. Typically, some have as much as 50 per cent of their total sales coming from chronic therapy drugs.
The way the current system works is: a patient typically purchases from pharmacies in cash and pharmacies pay to distributors' majority in cash (estimates vary but could range between 40 to 70 per cent). However, distributors typically pay companies by cheque.
But then, sales have tended to decline in some cases. There have been lower sales in the acute sales (for ailments like cough, cold, pain, infection etc) and these overall, some analysts point out, may see 5-10 per cent lower sales for November 2016. Again, within this, smaller pharmacies or those do not have a current account in bank, and were reluctant to accept old notes, have taken a bigger hit as sales tend to have moved to those that accept older notes and these typically tend to be pharmacies with current account.
However, considering sales across all therapy areas, the net impact seems negligible, according to those tracking the pharma sales. "The overall impact (acute and chronic therapy sales) of demonetisation on the secondary sales (sales from stockists to retailers) in the first week since the announcement has been neutral," says Hari Natarajan, Associate Director, Business Intelligence, AIOCD AWACS, which tracks pharma retail sales in India. He says this based on a sample study done by the AIOCD AWACS across some 350 leading stockists across the country.
In case of healthcare, where ever optional surgeries are required, these have tended to get postponed. This is specially so in cases where there is usually very little or no insurance support like in the case of cosmetic surgeries. "There are some people who are postponing their procedures but I do not see any cancellations. These are usually for cosmetic surgeries like facial sculpting or liposuction," says Dr Ajaya Kashyap, director, cosmetic ad plastic surgery at Fortis Memorial Research Institute at Gurgaon. He says there is an impact but it is more in the nature of a postponement rather than cancellation. In all, about 15 to 20 per cent of all the procedures would have got postponed. Most other healthcare procedures do not seem to have seen any major impact and most hospitals seem to have created alternate forms of payments for patients such as use of credit card, debit card, online payments or options to pay through internet banking.
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