"All pharmaceutical companies face revenue loss due to the expiry of drugs but the worst hit are the small and medium ones due to their limited infrastructure to minimise losses," S Jaishankar, Chairman of Confederation of Indian Pharmaceutical Industry, told PTI.

Though the bigger players in the industry manage to contain the losses to an extent, the smaller ones are not able to manage it due to inadequate monitoring system and the time constraint to track the movement of drugs and divert it to better markets, he said.

"This is costing the industry at an average of Rs 500 crore annually," Jaishankar added.

According to S V Veerramani, chairman of Small and Medium Enterprises Committee of Indian Drug Manufacturers' Association, around 7,000 small and medium enterprises, which account for 80 per cent of the total number of manufacturers and contribute 40 per cent to the total drug output, are the worst-affected.

"As retailers and stockists return the expired drugs and get replacements, it is the producer who bears the brunt," he said.

"Of the seven per cent margin we earn from the sale of products, three per cent is lost on expired drugs," Verramani, who is also the managing director of  Fourrts (India) Laboratories Pvt Ltd, Chennai, said. "This is a huge amount as far as smaller companies are concerned and it is a national wastage as well."

Usually a medicine has a shelf life of one and a half to two years. It takes three to six months for even a fast-moving drug to reach the chemist's medicine chest through the stockist, wholesaler and the retailer.

"The medicine has six months in hand for a good sale. During the remaining six months customer becomes choosy and prefers not to buy the product saying it was nearing expiry," he said.

Even many hospitals refuse to keep medicines which do not have a shelf life of at least six months, Jaishankar said.

The situation is worse in the case of slow-moving drugs, Veerramani added. As the retailers do not suffer losses, many of them fail to inform about the stocks at least six months ahead of the expiry. "It is not possible for the manufacturer to go from one shop to another, taking stock of his product," said Veerramani.

According to practice, the expired drugs go to the stockist from the retailer and are handed over to the manufacturer who destroys it. To minimise this wastage of drugs, Jaishankar recommends greater alertness on the part of the retailer and the marketing people. Computerisation and efficient monitoring by the retailer could help mitigate losses.

The end customer also needs to be aware of the fact that the drug is valid for use till the expiry date, said Veerramani.

"The product expiring after 18th month of its production, could be safely used till the exact expiry date. By not discarding products nearing expiry, customers also can salvage the drugs", he said.