ADAG to rewrite drug distribution rules

The Anil Dhirubhai Ambani Group, or ADAG, is set to re-write the rules of drug distribution in India. Ambani's healthcare venture plans to cut out the middlemen in the sale of medicines, reports CNBC-TV18.

Anil Ambani has set his sights on the lucrative business of drug distribution in India. In what could be the first serious attempt to break the conventional rules of pharmaceutical distribution, ADAG aims to strike partnerships with large distributors and cut across intermediaries like C&F agents.

ADAG already has large warehousing facilities in more than 90 towns and can handle logistics at par with international standards. Large stockists like Jalaram Distributors admit that talks with Reliance are currently underway. This stockist firm's Dilip Mehta admits to having held "several rounds of talks" with ADAG, and says there is progress though nothing is finalised as yet.

Currently, drug companies appoint state-wise C&F agents, which later distribute drugs to stockists and retailers. However, Reliance is not alone in the distribution game. Hong Kong-based Zuellig Pharma has also started operations to provide an organised distribution structure for pharmaceutical companies.

Reliance hopes to break the conventional model of drug distribution, which is expected to result in better inventory and supply chain management - something that could be at par with global standards.