pharmaceutical marketing strategy of pharmaceutical industry

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PROJECT REPORT ON “MARKETING STRATEGY OF PHARMACEUTICAL UNDER THE GUIDANCE OF: SUBMITTED BY: MR. SUNIT MADAN HIMANSHU MOHNIA (Business Development Manager) REG. NO.: 200620703 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL), PUNE ACADEMIC YEAR: 2006 1

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Page 1: Pharmaceutical Marketing Strategy of Pharmaceutical Industry

PROJECT REPORT

ON

“MARKETING STRATEGY OF PHARMACEUTICAL

UNDER THE GUIDANCE OF: SUBMITTED BY:MR. SUNIT MADAN HIMANSHU MOHNIA(Business Development Manager) REG. NO.: 200620703

SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL), PUNE

ACADEMIC YEAR: 2006

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ACKNOWLEDGEMENT

The present work is an effort to throw some light on “Marketing Strategy of

Pharmaceutical Industry”. The work would not have been possible to come to the

present shape without the able guidance, supervision and help to me by number of

people.

With deep sense of gratitude I acknowledge the encouragement and guidance received

by my organizational guide Mr. Sunit Madan (Business Development Manager)

I convey my heartfelt affection to all those people who helped and supported me

during the course of completion of my Project Report.

HIMANSHU MOHNIA

Reg. No.: 200620703

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NO OBJECTION CERTIFICATE

This is to certify that Mr. Himanshu Mohnia is permitted to use relevant

data/information of this organization for his project in fulfillment of the Post Graduate

Diploma in Business Administration Specialization – Marketing Management Batch:

(2006)

We wish him all the success.

Signature of the competent authority

of the Institute / Organization

Mr. Sunit Madan(Business Development Manager)

Place: New Delhi

Date:

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DECLARATION BY THE LEARNER

This is to declare that I have carried out this project work myself in part fulfillment of

the Requirement for the Post Graduate Diploma in Business Administration

Specialization – Marketing Management Batch: (2006) Program of SCDL.

The work is original, has not been copied from anywhere else and has not been

submitted to any other University/Institute for an award of any degree/diploma.

Date: Signature:

Place: New Delhi Name: Himanshu Mohnia

REG NO. 200620703

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CERTIFICATE OF SUPERVISOR (GUIDE)

Certified that the work incorporated in this Project Report “Marketing Strategy of

Pharmaceutical Industry” submitted by Mr. Himanshu Mohnia is his original

work and completed under my supervision. Material obtained from other sources has

been duly acknowledged in the Project Report.

Date: Signature of Guide:

Place: Mr. Sunit Madan(BUSINESS DEVELOPMENT MANAGER)Zydus Neurosciences, Cadila Healthcare Ltd.

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EXECUTIVE SUMMARY

The Indian pharmaceutical industry is highly fragmented -- there are now more than

20,000 domestic manufacturers of end-use pharmaceuticals, particularly because of

the industry's low capital requirement and the lack of product patents. Only about 300

of these are in the organized sector. This structure causes intense competition,

especially in the bulk drug markets, with profitability falling as demand expands.

The import of finished pharmaceuticals is almost negligible, and confined to very

specific types like anti-cancer drugs. In 1994, the import of drugs, pharmaceuticals

and intermediates was estimated at $450 million, and included the following:

antibiotics, penicillin and its salts, erythromycin and its preparations, vitamins and

provitamins, vaccines (polio, human and veterinary), preparations containing insulin,

caustic and other hormones, and tetracycline and its preparations. For value purposes,

drugs in India are generally classified into two categories -- bulk drugs and

formulations. Due to India's low overhead costs, bulk drugs comprise the largest

sector in the country's pharmaceutical market. India’s bulk drug sector also makes up

about 6% of the international bulk drug market. Drug intermediates are used as raw

materials for the production of bulk drugs, which are either sold directly or retained

by companies for the production of formulations. Formulations can be subdivided into

generic drugs and branded or "ethical" drugs, the latter of which are made under

process patent and sold under a separate brand name. Expected short-term growth for

the two types of drugs has been 20% for bulk drugs and 15% for formulations.

Pharmaceutical Industry is one of the most intense knowledge driven industry, which

is continuously in a state of dynamic transition. Indian pharmaceutical industry is

climbing up the value chain from bringing a pure reverse engineering industry focus

on domestic market. The industry is moving towards basic research driven expert

oriented global presence and providing wide range of value added quality product and

services. The pharmacy formulation market varies radically from the consumer

market in many ways. The rules governing the pharmacy market are different except a

few over-the-counter (OTC) drugs. Pharma companies are not allowed to publicly

market their products. Marketing has to be restricted to promotional campaigns,

advertisement only in medicinal magazines, journals etc., through medical

representatives.

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TABLE OF CONTENT

Chapters Page Nos.

1. Introduction 01-05

2. Objectives and Scope 06-07

3. Limitations 08-09

4. Theoretical Perspective 10-59

5. Methodology and Procedure of work 60-62

6. Analysis of Data 63-85

7. Findings, Inferences and Recommendations 86-90

8. Conclusion 91-93

9. Summary of the Project Report 94-95

10. Annexure 96-109

i. Questionnaire 97

ii. Proposal 102

iii. References 107

iv. Lit of figure 108

v. Lit of Table 109

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8

CHAPTER -1INTRODUCTION

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INTRODUCTION

PHARMACEUTICAL MARKETING IN INDIA: A

MACROSCOPIC VIEW

Drug & pharmaceutical industry plays a vital role in the health care of the any

country. Rapid growth of this industry requires further attention because even after 50

years of independence, India, with around 15 percent of the World population,

accounts for less than 2 percent of the drug production in the world. Annual per capita

consumption of medicine in India is less than 2% of that in Japan. Health care

expense in India is a dismal 0.8 percent of GDP compared with 12.4 percent in U.S.A.

6.5% in Japan and 6.2 percent in the U.K, despite higher incidence of disease and

malnutrition. The poverty and disease in India on one hand calls for higher standard

of healthcare and pharmaceuticals production and on the other, stultifies the growth of

industry due to poor affordability of an average Indian. Drug & Pharmaceutical

industry has therefore, encountered a tough situation which most industry have always

found difficult, to provide abundant quantity of quality products at low prices.

The Indian Pharmaceutical industry, valued at $46.2 billion has been witnessing

attractive growth rate of 15% to 20% consistently over the past decade. This growth

was build by India's large population, increasing allocation of income to healthcare

spending and exports. Exports which currently accounts for 20% of the production

value has grown by a compound annual growth rate of 34% in the past few years due

to competitive price advantages from India's low labor and other input cost

The Indian market for pharmaceutical products stands at an enormous $58.8 billion.

The big 10 companies account for over 30% of that, take away 45 marketer and

average sales don't even come any where near the $2.5 million marks, that's how

fragmented its is some 50,000 brands from over 20,00 companies growing fast

enough to embarrass rainy day mushrooms and enough diseases to savage Indian

population all several times over and turn Dr. Dolittle into Dr. Don't care.

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GOVERNMENT POLICIES

In a country lacking the assurance of free health care for all (not to talk of an effective

health insurance system), it is the poor patient's family who must pay the bill. This

was the justification for the policy. But it killed any incentive to invest in R& D

(Research and Development), which makes global drug manufacturers what they are:

leader of mankind's war on disease. India's per capital consumption of drugs is said to

be just $3. In the US its over $100 and in Japan, over $400. India has about 20% of

the world's disease burden (with just 16% of its population). Western spending is high

because in a system where the government pays the bills, the patients get themselves

prescribed all sorts of pills for ailments that aren't terribly serious. But why is Indian

spending so low? Only 35% of the population has access to modern (read allopathic)

medicines. India has alternative system of medicines, Ayurveds, e.g. are not quacks,

neither are homeopaths who make their own medicines.

India also exports sizable quantities of drugs & pharmaceuticals. More companies are

now venturing into traditional health care systems beside modern medicine. With the

launching of new drugs policy, all bulk drug formulation and intermediaries except

five bulk drugs have been de-licensed. Many drugs that were hither to under price

control have been taken out of such control. Actually the list of controlled drugs has

been halved and is limited to 73 items.

Higher rate of return has been allowed for those drugs that are still under price

control. Companies with 51 percent foreign equity have been brought on par with

wholly Indian companies, automatic clearance would be given for 51 percent foreign

equity automatic approval would be given for foreign technology agreement as well.

Earlier such companies had restriction on the product they could manufacture or

import. A National Drug Authority is to be set up to monitor quality control and

rational use of medicine. A national pharmaceutical pricing authority is also to be set

up to fix prices in respect of drug, which would continue to be under price control

(Ramaswamy & Meerakumari 1988).

Recent budget proposal has announced a 10 percent drop in the peak customs duty,

which will benefit formulators and transnational pharmaceutical companies with high

raw material import contents, but falling traffic barriers also threaten the future of the

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bulk drug players. However, the 8 percent increase will not have a negative impact on

formulators as the increase will enable a full set off under MODVAT (Modified

Value Added Tax). Similarly, the 10 percent reduction in the tax on income from

royalty and technical fees paid to foreign companies may not affect domestic

companies at all. But high spenders on R & D like RanbaxyTM, CiplaTM and

WockhardtTM will gain. This along with the rising of investment limits in overseas

joint ventures and offices under the Export Earners Foreign Currency Account, will

provide a strong dose of incentive for India's pharmaceutical companies to go global.

(Sakaria 1988)

The Indian pharmaceutical sector is likely to witness major changes as a result of

liberalization and pressure from GATT (General Agreement on Trade and Tariff) and

WTO (World Trade Organization). Price control are gradually being dismantled with

less than 50% of the drugs coming under purview of DPCO. This number is likely to

decrease further. In addition, as a signatory to WTO by 2010, India will be require to

follow the same product patent laws governing the west. MNCs (Multinational

Companies) in the past, have been constrained in launching new products because of

strict patents enforcement law governing their home countries. Product patent will

provide greater freedom to introduce new an advance international portfolio products.

Indian pharmaceutical companies on the other hands are likely to suffer as a result of

patent protection. It will become increasingly difficult for them to introduce new

product without investing in basic research. Intensive research requires large

investment that can be only recover by spreading costs over a greater volume, there

by reducing average costs. However, because of high industry fragmentation and a

lack of research, few domestic company are able to reap the benefit of scale.

To end the dominance of foreign drug companies, the Indian government enacted a

series of policies designed to foster self-sufficiency in the production of basic drugs.

Because these measures lowered barriers to entry, thousands of medium and small

Indian pharmaceutical companies entered the market challenging the MNCs for

control. These actions laid the foundation for today’s highly competitive domestic

industry that is capable of offering some of the lowest drug prices in the world. These

policies ended India’s dependence on expensive foreign drugs, fostered the

development of a competitive pharmaceutical industry, and guaranteed the Indian

public access to inexpensive drugs. Nonetheless, the Indian pharmaceutical industry

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also became one of the country’s most heavily regulated. The industry currently faces

restrictions on imports, high tariff rates, ration requirements, and equity ceilings for

foreign participation.

Against this backdrop, the companies most likely to succeed will be large companies

with a wide product portfolio, those that have the ability to undertake research and

develop a strong product pipeline and those that gain or sustain export competitive

environment, it will be critical for companies to build sustainable competitive

advantage. In addition to the strategies discussed earlier, companies have

opportunities to gain an edge over their competitors, by actively managing their

product portfolio, by executing a sound globalization strategy or by becoming an

integrated healthcare company.

The Indian pharmaceutical industry is highly regulated, essentially on three aspects:

Patents

Price

Product quality

The various legislations that govern the Indian Pharmaceutical Industry are:

The Indian Patents Act 1970 (and the amendments thereafter)

Drug Price Control Order (soon to be replaced by Pharmaceutical Policy

2002)

The Drugs and Cosmetics Act 1940

The legal framework for the industry should be such so as to increase the strengths of

the industry, mitigate the weaknesses, void off the threats and cash in on the

opportunities.

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13

CHAPTER – 2OBJECTIVES AND

SCOPE

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OBJECTIVES AND SCOPE

The present study of the pharmaceutical industry of India revolves around the

following basic objectives:

To understand how pharmaceutical company launch their product

To know what promotional strategies are used by pharmaceutical companies to

sell their products in the market

To understand what is the role played by sales representatives in this regard

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15

CHAPTER – 3LIMITATIONS

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LIMITATIONS

The process employed to select the sample was simple random sampling. Simple

random sampling refers to that sampling technique in which each and every unit of

the population has an equal and same opportunity of being on the sample. In simple

random sampling, which item gets selected is just a matter of chance. Random

sampling technique is generally employed to extract the fruitful results. This includes

the overall design, the sampling procedure, the data collection methods, the field

methods and the analysis procedures

The pharmaceutical industry is one of the major, most successful also rapidly growing

industries worldwide. It contributes significantly to the economies of many countries

all around the world, both as a major employer and as an export earner.

Marketing and sales of pharmaceutical products is very different from other products

such as say groceries, cosmetics, food items, vehicles, etc. One, pharmaceutical

products (apart from over the counter OTC drugs) can only be obtained from a

chemist on a doctor’s prescription. Thus here the customer is the doctor, who is well

versed in pharmacology. Two, medicines and drugs can only be prescribed by a

doctor only when it is deemed necessary for the patient’s recovery from illness; that

is, it is ethically wrong for a doctor to needlessly prescribe medicines. Under these

medical and ethical constraints, how does the pharmaceutical company promote its

products? This is the purpose and objective of the study.

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17

CHAPTER – 4THEORETICAL PERSPECTIVE

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THEORETICAL PERSPECTIVE

Historical Prospective

The production of bulk drug was virtually non existent in India at the time of

independence in 1947. It increased from a meager $715 million in 1962 to $2.4 billion

in 1980 and further about $8.4 billion in 1990. Production of formulation is increased

from $90 million in 1947 to $14.4 billion in 1980 to $36.3 billion in 1990. The

demand for pharmaceuticals increased due to increase in population, increase in

affordability of a section of population and government emphasis on health program.

The industry grew despite claims of price & production control. By the year 2000 the

demand for pharmaceuticals is expected to reach up to $6.72 billion per annum. There

has been 1000% growth in the number of drug manufacturers in India since 1970.

That was the year when the Indian Patent Acts and Drug Price Control Order (DPCO)

came into force (The Eastern pharmacist 1988). While the first accorded intellectual

property protection to manufacturing processes (not product formulas), the second

began regulating prices to ensure that drug manufacturer who were being allowed to

copy foreign drugs would make them cheaply available to the common man.

Indian Drug and Pharmaceutical (D & P) industry presents a picture of fast

development. Today, India manufactures most of its requirement of bulk drugs and

formulation. In fact, more than 30,000 different pharmaceutical formulation worth

$210 million are manufactured and sold in India. There are 45 major pharmaceutical

firms, each with a sizable investment and sales turnover. Investment ranges between

$1.47 million to $4.2 million the sales ranges between $2.10 million to $54.6 million

per annum. Growth in this industry was to the tune of 23.4 per cent in 1997-98. This

was phenomenal in comparison with the other industries most of which have run into

losses or very nominal profits leading to a slowing down of the growth.

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Table: 4.1: India’s Pharmaceutical Industry

India’s pharmaceutical industry is one of the fastest growing segments of the Indian

economy with an average annual growth rate of 14 percent during 2005-2008.

Overall, the Indian market for pharmaceuticals is projected to grow at an average

annual rate of between 15 and 20 percent during 2005 - 2010. The surge in production

has been driven by legislative reforms, the growth in contract manufacturing and

outsourcing, value added foreign acquisitions and joint ventures, India’s mastery of

reverse engineering of patented drug molecules, and India’s efforts to comply with its

World Trade Organization (WTO) Trade Related Intellectual Property Agreement

(TRIPs) obligations. When India joined the WTO in 1995, its pharmaceutical exports

were valued at less than $600 million. By 2009, its exports had grown to $3.7 billion

and accounted for more than 61 percent of industry turnover. Currently, Indian

pharmaceutical companies produce between 20 and 22 percent of the world’s generic

drugs (in value terms) and offer 60,000 finished medicines and nearly 400 bulk drugs

used in formulations.

The pharmaceutical industry in India is going through a major shift in its business

model in the last few years in order to get ready for a product patent regime from

2009 onwards. This shift in the model has become necessary due to the earlier process

patent regime put in place since 1972 by the Government of India. This was done

deliberately to promote and encourage the domestic health care industry in producing

cheap and affordable drugs. As prior to this the Indian pharmaceutical sector was

completely dominated by multinational companies (MNCs). These firms imported

most of the bulk drugs (the active pharmaceutical ingredients) from their parent

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companies abroad and sold the formulations (the end products in the form of tablets

and capsules, syrups etc.) at prices unaffordable for a majority of the Indian

population. This led to a revision of Government of India’s (GOI) policy towards this

industry in 1972 allowing Indian firms to reverse engineer the patented drugs and

produce them using a different process that was not under patent. The entry of MNC’s

was also discouraged by restricting foreign equity to 40%. The licensing policy was

also biased towards indigenous firms and firms with lesser foreign equity. All these

measures by GOI laid foundations to a strong manufacturing base for bulk drugs and

formulations and accelerated the growth in the Indian Pharmaceutical Industry (IPI),

which today consists of more than 20,000 players. As a result the Indian

pharmaceutical industry today not only meets the domestic requirement but has

started exporting bulk drugs as well as formulations to the international market.

LEADING INDIAN PHARMACEUTICAL MANUFACTURERS

India’s leading pharmaceutical companies are striving to compete not only in the

domestic Indian market, but also in the global market for both generic drugs and

original products. Sales for India’s largest 200 pharmaceutical companies grew from

$7.9 billion in 2007 to $8.6 billion in 2008, or by 9 percent. By 2008, 9 of the top 10

Indian 21 drug makers were Indian-owned firms accounting for more than 44 percent

of total industry sales. India’s top five pharmaceutical companies, in terms of sales,

are Ranbaxy Laboratories, Dr. Reddy’s Laboratories, Aurobindo Pharmaceutical,

GSK-India, and Cipla. These companies manufacture a wide range of generic drugs

(branded and non-branded), intermediates, and active pharmaceutical ingredients

(APIs).

In terms of total sales, Ranbaxy Laboratories is India’s largest pharmaceutical

company and one of the world’s top ten generic drug makers. In 2009, exports

accounted for nearly 80 percent of Ranbaxy’s sales and the United States is

Ranbaxy’s largest market. Ranbaxy accounts for 23 percent of India’s pharmaceutical

industry revenues. Ranbaxy is a vertically integrated company with a presence across

the pharmaceutical value chain, offering a range of unbranded and branded generics,

active pharmaceutical ingredients, and biotechnology products. Ranbaxy markets its

products in more than 100 countries, a sales presence in 23 of the world’s top 25

pharmaceutical markets, and has manufacturing facilities in 8 countries. Cipla, India’s

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second-largest pharmaceutical company, is best know for its anti- AIDs drugs, and

Dr. Reddy’s Laboratories, India’s third-largest pharmaceutical company, also rely

heavily on exports as its revenues.

Table: 4.2: India’s top 10 pharmaceutical company sales ($million)

MNC PRESENCE IN INDIA :

Many of the world’s leading pharmaceutical companies have subsidiaries or other

operations in India. Multinational companies like GlaxoSmithKline (GSK) Baxter,

Aventis, Pfizer, Novartis, Wyeth, and Merck have been active in India’s

pharmaceutical market mainly through subsidiaries. The re-introduction of product

patents precipitated the return of a large number of other MNCs, some of whom left

during the process patent era. MNC pharmaceutical companies have also been

attracted by tax holidays, the deduction of capital R&D expenditures, and other

financial incentives offered by the Indian government. Industry sources indicate that

the most significant challenges facing MNCs are the uncertainly over pharmaceutical

price controls and data exclusivity.

There are approximately 34 foreign drug companies engaged in the Indian

pharmaceutical market and among them are 15 of the world’s 20 largest

pharmaceutical companies. According to FICCI, although MNCs have not launched

new products they have invested in new production facilities and R&D centers and

many are engaged in contract manufacturing, clinical trials, and other forms of

outsourcing. In 2008-09, MNCs invested more than $172 million in India’s

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pharmaceutical industry and FDI has grown by a compound annual growth rate

(CAGR) of 62 percent during 2002-06. However, many industry experts believe that

the return of the world’s leading pharmaceutical companies will gradually erode

India’s cost advantages. According to the Organization of Pharmaceutical Producers

of India, multinational drug companies currently command 24 percent of the domestic

Indian market, through their share could rise to 40 percent by 2010.

MARKETING FUNCTIONS

“Promotion” means any activity undertaken, organised or sponsored by a member

company which is directed at healthcare professionals to promote the prescription,

recommendation, supply, administration or consumption of its pharmaceutical

product(s) through all media, including the internet. A marketing program in order to

be successful must have a right mixture of marketing mix, not to mention market

research, a quality product, extensive distribution network acceptability, strong dose

of promotion coupled with a right price. A unique feature of the pharmaceutical

market is that it is one of the most fragmented markets in the country. The maximum

market is held by small companies, the largest pharmaceuticals company holding only

6 percent of the market share. This leads to unique marketing mixes.

The Indian pharmaceutical market is small, both by Western standards and in terms of

per capita consumption. Although India is the world’s leading producer of generic

drugs, its annual per capita consumption of pharmaceuticals is among the lowest in

the world at approximately $4.50 per person, as compared with $820 in the United

States and $13 in China in 2006. The value of India’s pharmaceutical industry nearly

doubled from $3.2 billion in 2000 to more than $6.2 billion in 2009, or by an average

of 12 percent annually (table 10). According to the Associated Chambers of

Commerce and Industry of India (Assocham), the Indian pharmaceutical market grew

at an average annual rate of 13.6 percent during 2006-2010 to reach $9.5 billion in

sales by 2010. This 51 growth is expected to be driven by: access to low cost, high

volume generic drugs; mergers and acquisitions: industry consolidation; and India’s

growing importance as a pharmaceutical contract manufacturing and services

location. Approximately 80 percent of domestic industry production consists of

formulations, with the remainder consisting of bulk drugs.

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Considering the healthcare of the Indian Public, the Govt. of India encouraged the

domestic pharmaceutical companies in India. When the international norms

recognized the product patent, the government of India enacted the Indian Patent Act

in 1970 (process patent), with the objectives of allowing the domestic companies to

grow. The Indian Patent Act recognized the “Process” to manufacture a product and

not the end “Product”. Indian companies took advantage of the Patent Act and

succeeded in producing molecules, which were under Patent Production else where, at

a cost that was lower than the original research cost. By taking the cost advantages,

the Indian Pharmaceutical companies fixed their prices lower than the prices fixed by

the Multi National Companies manufacturing the drugs. Apart from the Indian Patent

Act 1970, DPCO, FERA and increased imports tariffs also helped the growth of the

domestic pharmaceutical companies. With a view to the above effect, the

Multinational Companies’ market share, decreased from 100% in the year 1947 to

80% and 33% in the years 1970 and 1991 respectively with corresponding increase in

domestic company’s market share.

LARGE MARKET SHARE FOR GENERIC DRUGS

As there was no efficient patent protection between 1970 and 2005, many Indian drug

producers copied expensive original preparations by foreign firms and produced these

generics by means of alternative production procedures. This proved more cost-

efficient than the expensive development of original preparations as no funds were

required for research, which contained the financial risks. This spending block may

come to as much as EUR 600 m for only one drug. This kind of money could

previously only be raised by large corporations in the industrial countries. The

competitiveness of generics producers is based on cost-efficient production. In this

field, Indian companies are currently in top position. At one-fifth, India’s share in the

global market for generic drugs is considerably higher than its share in the overall

pharmaceuticals market (approx. 2%). At the same time, India’s pharmaceutical

companies gained know-how in the manufacture of generic drugs. Hence the name

“pharmacy of the poor” which is frequently applied to India. This is of significance

not least for the domestic market as disposable income is as little as EUR 1,900 per

year for roughly 140 million of the total of 192 million Indian households1, which

means the majority of Indians cannot afford expensive western preparations.

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Fig. 4.1: Market Share of Corporate

Fig. 4.2: Market Share of MNCs & Local Companies

Between 1996 and 2006, nominal sales of pharmaceuticals on the Indian subcontinent

were up 9% per annum and thus expanded much faster than the global pharmaceutical

market as a whole (+7% p.a.). Indian companies strongly expanded their capacities,

making the country by and large self-sufficient. Nonetheless, with total sector sales of

roughly EUR 10 bn, India commands a less than 2% share in the world’s

pharmaceutical market (1966: 1.5%). This puts the country in twelfth place

internationally, even behind Korea, Spain and Ireland and before Brazil, Belgium and

Mexico. Among the Asian countries, India’s pharmaceuticals industry ranks fourth at

8%, but has lost market share to China, as sales growth there was nearly twice as high

and sales volumes nearly four times higher than in India.

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Globalization has not caused traditional medicine to be abandoned but with higher

education, rising income and a change in lifestyle, western medical treatment is

gaining in importance. At present the population especially in rural areas still sees

western medicine as a stop-gap cure which is unlikely, though, to provide a lasting

solution to health problems. Today, about 70% of the population on the Indian

subcontinent depends entirely or at least in part on traditional Indian medicine which

is cheaper and more easily available than western drugs.

Indian companies have recognized the opportunity presented by western pharma

in search of lower costs and higher profits, and are exploiting the low cost base

and pool of highly skilled labour in their market to develop a thriving outsourcing

industry, positioning India as a key provider of contract research and

manufacturing services.

India is increasing its R&D and biotechnology focus and taking advantage of the

low R&D productivity of developed markets to gain partnerships with western

players. These alliances enable the companies to gain expertise in discovery and

development as well as maximizing revenues if and when products reach the

market.

Pharmas and biotechs in the US, Europe and Japan have realized the increasing

role of India at a global level. Many players are outsourcing non-core activities of

the research and manufacturing process. Outsourcing is a popular option, while

off-shoring via direct investment, joint venture or acquisition is also proving

successful.

Function of Sales

In India front and marketing (doctor convincing and sales) is where the action is. The

point of differentiation has been the relationship with doctors (through medical

representatives) But doctor aren't always enthused. Says Savita Mikhi, who runs a

private clinic in Delhi, "many companies believe wrongly that a nattily clad medical

representative or literature printed on glossy paper makes for impressive

communication.

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Advertising

The various dimensions of pharmaceutical marketing are Demographic (age, sex,

family, etc), Generic (as per generic equivalent present in them), Therapeutic group,

Competitive (depending upon number of competitors present), and fifth dimension is

the time. In pharmaceutical markets, major segments considered are:

a) Consumer or Prescription markets:

These consist of individuals who go to practicing doctors.

b) Institutional markets:

These contain large hospitals, Public and Private sectors along with government’s

hospital including medical colleges.

c) Industrial markets:

These consist of bulk drugs and their formulations.

d) Over the counter (OTC) markets:

Drugs, which are non-prescription medicines and can be sold directly to end-users.

Based on product category, the pharma industry can be divided into:

a. Bulk Drugs: (The active ingredient for making formulations.)

b. Formulations: (The final form, in which the drugs are sold i.e. Syrups,

c. Injections, Tablets and Capsules)

In general, business in pharmaceutical market is conducted in two major ways, that is,

either by institutional selling or through trade business.

Pharmaceutical marketers in the USA, having just been allowed to advertise drugs on

Television, have taken the big risks. They are advertising like crazy and even have the

websites to keep patients fully informed of diseases dosages side effects and so on. In

India too, earlier this year MAA. Bozell set up Lewis Grace. Bozell, is a subsidiary

responsible for pharmaceutical advertising. Now, Ogilvy & Marther and Redeffusion

are reportedly considering similar moves. To begin with, they will try to bring their

skills to the ordinary business of making audiovisual, prints or multimedia sales

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pitches to the doctors. This could improve the communication of OTC products,

which have been turning more love and care oriented. Johnson & Johnson's touch

therapy commercial is good example of the use of emotion. Advertising agencies will

have to educate themselves well, because the main reason that in house publicity

departments manage to torpedo the suggestion of agency help is the fact that no body

wants their wonder pills to be handled by bubble gum jingle makers. Says the

marketing manager of a small, but fast growing Indian company, "Advertising

agencies may be good for selling the image of the company as whole but at the level

of each brand, what can they do? They don't know anything."

Pharmaceutical marketing experts are aware that well timed advertising directed to

doctors tends to boost sales of the brand that spent the marketing dollars. In the case

of marketing directly to health professionals, the question is whether promotion is (as

most drug companies claim) primarily information on how the drug works or is

intended to persuade doctors to prescribe the drug more frequently.

Although there has been a lot of research on the persuasive versus informative role of

drug promotion, there is little consensus and certainly more investigation is needed in

the context of developing countries. Nevertheless, a WHO commissioned literature

review of existing evidence in this regard reveals that while doctors’ opinions on the

usefulness of the information from drug companies vary, most believe that such

information is biased.

The analysis revealed:

Generic names of drugs are not revealed in more than 10% of advertisements.

Only 22.7% disclosed any adverse effects.

Just 25.1% provided any precautionary information.

Only 51.7% cited any references.

The Thai and Indian examples contradict established norms of ethical practice in this

area. The WHO Criteria clearly states that advertisements in all forms to physicians

and health related professionals should be fully consistent with the approved scientific

data sheet for the drug concerned or other source of information with similar content.

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Moreover, advertisements that make a promotional claim should at least contain

summary scientific information.

While these examples of advertisements focus on specific countries and companies,

this should not be interpreted as evidence of a higher prevalence of information

quality problems compared to other countries or companies. It is clear however that

the poor quality of information provided to doctors in developing countries cannot be

dismissed as infrequent and isolated cases, but rather can be viewed as a systemic

breach of responsibility and ethical norms by market leaders.

Research shows that there is a strong correlation between irrational prescribing

behaviour and the use of commercial sources of information. The impact of flawed

and incomplete information is ultimately passed on to the world’s poorest and most

vulnerable consumers. Evidence suggests that doctors in developing countries, like

their counterparts in other countries, rely heavily on drug companies for drug

information, particularly for new drugs. However, while doctors in countries like the

US, UK and Australia have access to independent sources of drug information, this is

not the case in many developing countries. This is a major challenge in terms of

providing doctors with reliable information that can then be passed on to consumers.

Marketing Research Function

Marketer, in order gain information, conducts market research, which in Indian

pharmaceutical industry can be as simple as chatting with doctors, retailers and

hospital administration or as complex as surveying a nationally representative sample

of specialists or corporate hospitals and identifying the emerging health care needs.

The pharmaceutical major are fond of syndicated data. Many companies routinely buy

ORG (Operation Research Group) panel study and C-MARKTM studies for different

brands and keep them in computer memory for easy retrieval and analysis. For them,

it just feels good to know that data can be accessed when needed. But when it comes

to developing strategies for their brands, these companies do not operate on the basis

of this data. On the contrary, CadilaTM Health care (ZydusTM) group, takes the data

very seriously. It has meetings with all of the brand managers every month to study

the implications and develop strategic actions along with top management teams. This

company is using information actively, whereas many other companies use the

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information either as an academic appendage during a presentation of low immediate

relevance or as a defense shield during a performance review.

Marketing research data only provides a base for action in the market place, the action

which has to be implemented through various mix's of promotion. It is important to

understand that the promotional mix for any brand or organization is dependent upon

the mix of advertising, personal selling and public relation. Over use of personal

selling in pharmaceuticals via medical representatives and limitations on advertising

pharmaceutical products due to FDA (Federal Drug Administration) restrictions,

presents an opportunity to explore the role of and exploit the Public Relations

function in the pharmaceutical industry.

Pharmaceutical marketing is quite different than marketing of any other goods. Within

pharmaceutical products, marketing of prescription products is a way different from

that of over-the- counter (OTC) drugs and actual behaviour of prescribed drug market

may vary based upon various parameters. In case of prescribed drug market, typical

sales process is as follows:

Fig. 4.3: Drug requiring prescription

In this case, the patient – customer - do not have much or any say in purchase of the

product, perhaps other than spending the money. The decision makers are the

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physicians or doctors treating the patient. They will prescribe drug of a particular

brand if they are:

- Aware of the product.

- Convinced about the utility and usage of the product.

- Reasonably certain that the prescribed drug can be made available by the drug

retailer in required amount of time.

After following the above logic, the doctor prescribes the drug, but the drug retailer

plays a major role in effecting actual sale and he may:

- Not have the prescribed product in the ready stock.

- Not consider that the prescribed product has sufficient demand to stock the

product.

- Suggest or just substitute product of the competitor company having similar

composition, most of the times without even knowledge of the prescribing

doctor.

All this will perhaps happen just because there is less brand awareness as a

consequence of less promotional efforts by the product company.

USE OF PUBLIC RELATION

Very few pharmaceutical marketers in India use public relations as a marketing tool.

Many of them think Public Relation entails sending out a few press releases, holding a

few conferences and conducting some event when company launches a new molecule

or product. In reality, Public Relation usually ends up making a point at a very

personal level. Its impact in the industry is seen at several levels affecting doctors and

brands. Some years ago, CiplaTM was forced to make use of Public Relation tools

when its major communication medium--medical representatives turned--un-

cooperative. The company conducted meetings for not more than 10 customers at a

time and ensured that thousands of such meetings took place at different locations in

the country. This helped ciplaTM in building one-to-one relationship with its

customers. Prudent use of Public Relation has also helped the organization in creating

a positive platform for direct response communication.

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DRUG DISTRIBUTION

Many a times drugs promoted through professional service representatives do not

appear on the shelves of the retailing chemist. This can be attributed to ineffective

distribution system. Although distribution is recognized in India as an important

function, many pharmaceutical marketers accord it a mere supportive role; so the

distribution system has remained traditional with little or no innovations.

Superstockists/stockists, distributors and C& FA's (Carrying & Forwarding Agent)

have traditionally been very loyal to pharmaceutical marketers. As a result, strategic

changes in distribution arrangement were rarely recommended or carried out.

Problems, if any, were always sorted out amicably and changes, when at all, were

concerned only with adding or deleting stockists in the distribution chain. Over time

when AIOCD (All India Organization of Chemist & Druggist) mobilized retailers in

every state, pharmaceutical companies found their freedom to appoint stockist

restricted by retailer pressure.

There have been other changes too. One may view the distribution set up as a

concentric pattern with patients at the center with each ring representing a link in the

chain. It must be noted that some rings prefer by passing the next one. Some

companies, for instance, deal directly with stockists, whereas some high end products

that require highly sensitive servicing are distributed directly to doctors. Some

innovative ideas have been coming from such companies like HoechstTM,

SarabhaiTM, Sandoz (NovaratisTM) and now Nicholas ParimalTM.

In 1988 Sandoz decided to make changes in its method of giving discount to C &

F (Carrying and Forwarding Agents) through a simple innovation. Instead of paying

direct percentage on sales to agents it started paying on basis of case lots. Each case

lot weighed approximately 12-15 kg and on each case lot, it paid $ .19 - $ .32 to

C&FA. As result, SandozTM reduced the cost of operations by 1.2 percent of its total

turn over, an enormous figure when calculated in rupee terms. It is often true that

effective distribution along with right pricing differentiates a success from a failure in

market place. In India, most companies market a vast portfolio of products (that

others are also selling) and pricing decisions are delegated. In a market with many

brands meeting the same need, even the rare marketer who begins by formulating a

program based on inputs from the doctors and patients often ends up glossing over

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question of profit while setting the price. In the old days production volume were

often kept fixed (either by the company or the licensing authority). In this state costs

were easy to measure and simple cost plus pricing used to work. Also marketers had

to live under the rules of Drug Price Control Order (DPCO), the government price

fixing instrument for essential drugs.

Since liberalization began in 1991 the DPCO has been loosing its grip and the prices

of many formulations, allowing market forces to play the regulator. Other aspects of

liberalization have made companies hungry for growth. In such a dynamic state of

existence where growth is both desirable and achievable, pricing is less simple. Lack

of strategic thinking leads to chaotic pricing. Every body agrees that intelligent

pricing can be used as a critical edge for any product. Yet in the pharmaceutical

industry, trends suggest that enough thought is not being given to such serious

decisions. A single player marketing thoughtless decision can have repercussions on

the entire market. Many marketing managers don't understand the impact of their own

decision on the market. As a result, they think of themselves as either price takers or

makers. There is rarely a marketer who wants to upset the apple cart--strategically--by

becoming a price breaker. This can be suitably illustrated with the example of

GlaxoTM: GlaxorTM, When it launched CeterzineTM an anti-allergic, played price

maker. It set a price it thought fit, then came a crowd of followers, and they were

price takers. So there was a market where GlaxoTM, UCBTM and UnichemTM were

all selling at $ .06 per tablet. Then came SOLTM. It decided to reset the scale and

change the markets dynamics So it played price breaker, selling its CeterzineTM

brand at $.023 per tablet. In 18 months it was selling higher volume then GlaxoTM

i.e., the price maker brand. GlaxoTM did not react and continued with the same price.

Today Lupin and Core are selling below SOL's price. So the price breaker managed to

start a price war, but GlaxoTM has won back the brand leadership.

DRUG PROMOTION METHOD

“The commercial needs of countless, fiercely competing pharmaceutical companies

has led them to depend on the tried and tested 3Cs: convince if possible, confuse if

necessary, and corrupt if nothing else works.”

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Health professionals in developing countries work in overstretched and under

resourced sectors on low pay and in difficult conditions. In such conditions the

promotions from the drug companies are inviting. Disparities in health spending

between the world’s richest countries and the world’s poorest countries are such that a

relatively cheap promotion in a developing country will generate much more interest

there than it would in a developed country.

The aim of drug promotion is to persuade people to buy more drugs and/or to pay

higher prices. This is done by increasing the perceived value of the drug via one or

more of several approaches including:

Increasing the perceived frequency and/or severity of the indications.

Widening the indications to include more people.

Increasing the perceived likelihood and magnitude of benefits.

Decreasing the perceived likelihood and magnitude of harms.

Increasing the use of the drug for longer durations.

The World Health Organization defines drug promotion as including: “all

informational and persuasive activities by manufacturers and distributors, the effect of

which is to induce the prescription, supply, purchase and/or use of medicinal drugs.”

The main aim of promotion is not to inform but to persuade. Consumer goods

advertisements rarely convey much information about the features of the product.

Instead the emphasis of much advertising is on associating consumption of the

product with positive feeling.

Regardless of where they are operating, most drug companies try to identify where

people are on the following behaviour change stages and then deploy sophisticated

marketing techniques to motivate them to move one or more stages towards repeat

use:

Each move requires motivation and decision making so drug companies study how to

understand human motivations and decision-making. Public relations techniques

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bypass people’s defences by giving the impression that the message is coming from a

trustworthy source.

Table 4.3: Doctor-directed promotion methods

ISSUES RELATING TO PROMOTION:

The ethical promotion of prescription medicines is vital to the pharmaceutical

industry's mission of helping patients by discovering, developing and marketing new

medicines. Ethical promotion helps to ensure that healthcare professionals have

access to information they need, that patients have access to the medicines they need

and that medicines are prescribed and used in a manner that provides the maximum

healthcare benefit to patients.

It is understood that national laws and regulations usually dictate the format and

content of the product information communicated on labelling, packaging, leaflets,

data sheets and in all promotional material. Promotion should not be inconsistent with

locally approved product information. Promotional information should be clear,

legible, accurate, balanced, fair, objective and sufficiently complete to enable the

recipient to form his or her own opinion of the therapeutic value of the pharmaceutical

product concerned. Promotional information should be based on an up-to-date

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evaluation of all relevant evidence and reflect that evidence clearly. It should not

mislead by distortion, exaggeration, undue emphasis, omission or in any other way.

Every effort should be made to avoid ambiguity. Absolute or all-embracing claims

should be used with caution and only with adequate qualification and substantiation.

Descriptions such as 'safe' and 'no side effects' should generally be avoided and

should always be adequately qualified.

Promotion should be capable of substantiation either by reference to the approved

labeling or by scientific evidence. Such evidence should be made available on request

to healthcare professionals. Companies should deal objectively with requests for

information made in good faith and should provide data which are appropriate to the

source of the inquiry.

All printed promotional materials must be legible and include:

the name of the product (normally the brand name);

the active ingredients, using approved names where they exist;

the name and address of the pharmaceutical company or its agent responsible for

marketing the product;

date of production of the advertisement; and “abbreviated prescribing

information” which should include an approved indication or indications for use

together with the dosage and method of use, and a succinct statement of the

contraindications, precautions and side effects.

The same requirements shall apply to electronic promotional materials as applied to

printed materials. Specifically, in the case of pharmaceutical product related websites:

The identity of the pharmaceutical company and of the intended audience should

be readily apparent;

The content should be appropriate for the intended audience;

The presentation (content, links, etc.) Should be appropriate and apparent to the

intended audience; and

India-specific information should comply with drugs & magic remedies act.

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ETHICS IN PHARMACEUTICAL PRODUCTS PROMOTION

Recently the Organization of Pharmaceutical Producers of India (OPPI), which is a

premier organization of pharmaceutical manufacturers in India, has revised its model

code on standards of promotion activity to medical practitioners. This model code

aims to restrict pharmaceutical companies from providing ‘freebies’ to medical

practitioners so as to reduce influence on prescribing drugs of a particular company.

This is based on the International Federation of Pharmaceutical Manufacturers

Associations (IFPMA) code which is considered as a model code. Section 2.2 of

General Principles of OPPI code states that ‘No financial benefit or benefit-in-kind

(including grants, scholarships, subsidies, support, consulting contracts or educational

or practice-related items) may be provided or offered to a healthcare professional in

exchange for prescribing, recommending, purchasing, supplying or administering

products or for a commitment to continue to do so’. This clearly states the refined

position of OPPI code which is based on a noble intention of having a rationale for

prescribing a product of a particular company by the medical professional without any

influence so as to benefit the patient. It gives more freedom to medical professionals

to choose the treatment option for patients on a case by case basis if they are not

influenced by pharmaceutical companies. But it is a well-known fact that there are

many companies trying to influence the prescribing habit of doctors with their kind

gesture towards the practitioner, which ultimately tempts other companies also to lure

the medical practitioners by providing freebies, apart from scientific information

including literature, brochure and other scientific inputs. The condition of the Indian

pharma industry is also pathetic with more than 20,000 manufacturing units that sell

more than 70,000 brands.

It is virtually impossible for any medical practitioner or even a common man to

remember the whopping number of brand names. Every company or manufacturer

wants to survive in this cut-throat competition and thus direct their efforts towards

these unhealthy practices. Though the OPPI code has tried to amend some of these

unethical practices in tune with IFPMA code, which is welcomed by trade

associations, some lacunae exist. What about companies that are not members of

OPPI? What if companies continue to promote their product in an unscientific way? Is

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there any mechanism by which unscientific promotion by companies is restricted?

Besides, the companies that are not members of OPPI may not follow the code and

can circumvent the provisions, still continue to influence the medical practitioners.

The Drugs and Magic Remedies (Objectionable Advertisements) Act in India states

only the conditions for which a drug cannot be directly advertised. At present there

are no provisions to monitor how companies, that are not members of OPPI, adhere to

standard practices. While the new code by OPPI may not be music to the ears of

medical practitioners since many of them would be devoid of the favours accorded to

them by certain pharmaceutical companies. At the same time it is required that the

prescription generated at the hands of the practitioner takes care of the patient’s

clinical condition and, more importantly, the economic status of the patient. Let the

medical practitioner be an unbiased or an impartial judge of what is required and for

which patient. What is needed is a concrete, directed and focused effort by all players

of the pharmaceutical industry and other stakeholders as well, in order to regulate the

promotional activities of pharmaceutical companies to medical practitioners. As OPPI

has modelled its code on the IFPMA code, all trade associations of pharmaceutical

industry, government, NGOs and common men should join hands together to curtail

the practice of influencing medical practitioners. Governments can frame and enact

laws and legislations that would take care of marketing practices and create a

monitoring authority that would monitor the promotional activities of pharmaceutical

companies in India.

PROBLEMS AND PROSPECTS OF SALES PROMOTION IN

PHARMACEUTICAL INDUSTRY

Marketing communications strategy will set out exactly how to promote an

organization, initiative, product or service across a whole range of different media –

from advertising campaigns to search engine optimization. It should set clear

objectives so that you can measure success and crucially, it should provide the best

solution within the available budget.  It is part of the marketing mix, which includes

all the means by which a company communicates directly with present & potential

customers. It is the process of presenting an integrated set of stimuli to a target with

the intent of evoking a desired set of responses within the target market & setting a

channel to receive, interpret & act upon messages & identifying new communication

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opportunities. Marketing communication is a systematic relationship between a

business and its market. There are twelve different communication tools available to

the marketer: personal selling, advertising, sales promotion, direct marketing, public

relation, sponsorship, exhibitions, merchandising, the internet, word of mouth and

corporate identity. These communication tools constitute the marketing

communication mix. Each element of these communication mix should integrate with

other tools of communication mix so that a unified message is consistently reinforced.

Sales promotion comprises various marketing techniques  which are often used

tactically to provide added value to an offering with the aim of accelerating sales and

gathering market  in that particular segment. In pharmaceutical marketing

communication the main objective is to make an impression and more important is to

make an impression long lasting. In the current rat race several national and

multinational pharma companies have gained remarkably for their exceptional

communication  strategies for sales promotion.While many pharmaceutical companies

have successfully deployed a plethora of strategies to target the various customer

types, recent business and customer trends are creating new challenges and

opportunities for increasing profitability. In the pharmaceutical and healthcare

industries, a complex web of decision-makers determines the nature of the transaction

(prescription) for which direct customer (doctor) of pharma industry is responsible .

Essentially, the end-user (patient) consumes a product and pays the cost .

The pharmaceutical industry is the world's largest industry due to worldwide revenues

of approximately US$2.8 trillion. Pharma industry has seen major changes in the

recent years that place new demands on payers, providers and manufacturers.

Customers now demand the same choice and convenience from pharma industry that

they find in other segment. Indian Pharmaceutical Industry is poised for high

consistent growth over the next few years, driven by a multitude of factors. Top

Indian Companies like Ranbaxy, Dr.Reddy's , CIPLA and Dabur have already

established their presence. Indian companies have only recently entered the area. The

Indian pharmaceutical industry came into existence in 1901, when Bengal Chemical

& Pharmaceutical Company started its maiden operation in Calcutta. The next few

decades saw the pharmaceutical industry moving through several phases, largely in

accordance with government policies. Commencing with repackaging and preparation

of formulations from imported bulk drugs, the Indian industry has moved on to

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become a net foreign exchange earner, and has been able to underline its presence in

the global pharmaceutical arena as one of the top 35 drug producers worldwide.

Currently, there are more than 2,400 registered pharmaceutical producers in India.

There are 24,000 licensed pharmaceutical companies. Of the 465 bulk drugs used in

India, approximately 425 are manufactured here. India has more drug-manufacturing

facilities that have been approved by the U.S. Food and Drug Administration than any

country other than the US. Indian generics companies supply 84% of the AIDS drugs

that Doctors without Borders uses to treat 60,000 patients in more than 30 countries.

There can be several challenges for pharma marketing with global channels opening

up from all directions it has become an art of its own kind. Some of the important

aspects can be as the followings

Increased competition and unethical practices adopted by some of the pharma

companies.

Low level understanding of customer knowledge (Doctors, Retailers,

Wholesalers).

Dissimilar customer perception.

Quality of medical representatives.

Recruitment process of medical representatives.

High training and re-training costs of sales personnel.

Busy doctors giving less time for sales calls.

Poor territory knowledge in terms of business value at  the level of medical   

representatives.

Valuing of prescription from each doctor in the list of each sales person.

Unknown value of revenue from each retailer in the territory.

l). Sales forecasting from field sales level to actual level.

Absence of analysis on the amount of time invested on profitable and not-so-

profitable customers and lack of time-share planning towards developing customer

base for future and un-tapped markets.

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The pharmaceutical distribution channel is indirect with usually three channel

members i.e. depot/C&F, stockiest and chemist. Pharmaceutical companies appoint

one company depot or C&F agent usually in each state and authorized stockist(s) in

each district across the country. Company depot/C&F sends stocks to authorized

stockists according to the requirement. Retail chemists buy medicines on daily or

weekly basis from authorized stockiest as per demand. Patients visit chemists for

buying medicines either prescribed by a doctor or advertised in the media. Here

patient is end customer and doctor is direct customer for any pharmaceutical

company. But for the doctor, customer (patient) is more important so he wants an

effective supply chain management from prescribed company. And for

pharmaceutical companies their customer that is doctor is more important that's why

they emphasize more on supply chain management. Ultimately end customer is

benefited out of this.

For marketing different pharmaceutical products companies require more and more

skilled field force to develop good rapport with their direct customer (doctor).

Moreover field force should have good product knowledge and USP of their products

over other so as to convince doctors and PULL the demand for their products i.e. from

Doctor to Retailer to Stockist to CFA to company. In this system, doctors are the core

customers and the major thrust is given to build and retain these customer because

they are pulling the demand for products hence companies  also give main emphasis

in building and retaining these customers. All efforts are being put for generating

secondary sales i.e. from stockist to retailer. Now-a-days the companies are a 

Ensuring of auto demand with limited availability and maximum liquidation of the

products is the main characteristic of this approach. For retaining and developing

customers, the companies normally provide gifts like sponsorship for various

conferences like RSSDI, FOGSI, APICON, UPCON etc. For example Dabur having

PASS (Professional Academic and Scientific Services) activities for promoting its

chronic therapy range. The relationship between clinicians and representatives has

always been good and pharmaceutical companies have provided, and still provide, the

major economical support for customers' continuous medical education. Something

needs to be done to find a solution to this problem that takes into account the needs of

both pharmaceutical companies and their representatives on one side and physicians

on the other, for a better professional interaction. Some times they were also mixed

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with CSR activity sponsorship like free health camps, diabetic camps etc. Of late the

pharma companies also ventured into the rural areas and along with doctors they are

also approaching the RMP doctors to bridge the gap between the product and their

ultimate customers – the patients.

Over the last couple of years, pharma marketing professionals are slowly changing

their strategies. This drift is driven by market forces. Patients' understandings of the

disease and disease management have also seen a positive shift. Today, a doctor is

subject to a lot of questioning and reasoning by the patients both about the disease and

disease management. Hence, we see some of the products in the ''direct-to-consumer''

mode of sale wherever the regulatory requirements permit. For Indian companies

marketing differentiation coupled with aggressive selling is the key. Even today more

than 50 per cent of Indian pharma market is rural and the ''GATT Effect'' will not be

immediate in rural India. To know the doctor's mind and also to occupy a place there

with a brand; the brand manager must be in the market with the doctors and

understand the specific needs of the doctors and design promotion.  Aggressive sales

push at the doctor and retailer level and consistent repeat visits can drive a brand

ahead. An old saying is that ''Doctors have a very strong memory and hence forget

what they do not want to remember.'' The challenge to a marketing man today is to

ensure that his brand falls in the category of ''Want to remember'' with as many

doctors as possible. This is an extremely difficult task, needing a lot of innovative

approach. This is precisely the real task of a sales personnel in pharmaceutical

marketing .Slowly and steadily the industry is growing to beat all the possible hurdles

away. Hopefully success is not far away.

PROMOTIONAL STRATEGIES OF PHARMA COMPANIES IN

INDIA

The key determinants of success of any Pharmaceutical industry, besides the cost and

availability of capital are brand building. In the pharmaceutical business in India,

most companies work on monthly, bimonthly or quarterly promotional cycles; and

promotional resources are carefully allocated to ensure that the company achieves

maximum sales. Most organisations bring out ‘strategy guides, which provide details

on inputs, information on competition, approaches to detailing and sometimes a chart

on incentives.

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Strategies are much more than plans to achieve goals. They differ from operating

procedures because they are drawn from changing market situations and are thus live

and dynamic. The term ‘market’ refers to all actual and potential buyers of a product

or service, who possess purchasing power, authority and willingness to purchase. The

global pharmaceutical market is currently estimated to be over US$ 400 bn and is

projected to grow at about 5 per cent per annum over the next few years. Due to the

rapid growth of the pharmaceutical industry, marketing has also become an important

determinant of the survival and growth of various pharmaceutical companies, amidst

the increasing competition faced by them.

The marketing strategies that are employed by pharmaceutical firms can be broadly

classified into two types as follows:

Promotional strategies

Defense strategies

Promotional strategies

Co-marketing: While co-marketing is a new concept all over the world, it started in a

nascent form even before the 1970s in India. Co-marketing strategy enables

organisations to focus more on market reach, penetration and brand share. The

ultimate objective of such approaches is to develop brand image and brand equity.

Unichem promoted saffola oil (of Bombay Oil Mills) to cardiologists as a part of their

promotional strategy. Later on, as the advantages become apparent, companies like

Johnson & Johnson and Wipro used this strategy to promote their baby care products

to doctors.

Brand image marketing: Pharmaceutical companies identify and build their strength

by calibrated strategy to ensure that doctors and customers see them in favourable

light. Research reveals that there is a direct relationship between a brand’s awareness

level, its image and its market share. Thus companies now a days are adapting this

strategy of improving the brand image, which in turn improves their sales and

profitability.

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Seven steps to a better brand image: Most of the pharmaceutical companies are

concentrating on this strategy to nurture the image of the company and in turn market

their products successfully.

The type of image, a company wants to brandish, can be furnished with the following

seven steps.

Play host: In this, a small group of doctors is invited and briefed whenever a new

brand is introduced. Earlier, unique has used this strategy to a good effect for

Metrogyl remains a market leader even in the wake of new molecule.

Respect doctors’ schedules and get to the point straightway. Also make the

presentation brief and memorable.

Be factual: Factual and realistic information is effective. Case studies, clinical

trials, promotional trials, cure rate of drugs and side effects all need to be collected

and documented properly to create a favourable perception.

Maintain respect: A conversation followed by a thank you note is usually

adequate. Medical representatives and managers need to be trained accordingly to

create a favourable impression.

Be brief and subtle: Initially to create perceptions and awareness about a

company, information should be given in encapsulated form so that the customer

is not burdened with more information.

Identify your uniqueness: The overall strategy may include an advertising or a

public relations agency handling everything.

Develop field staff to maintain quality standards

Involvement marketing

It started in a very small way in India, by way of brand promotion — Abdec Drops,

‘Healthy Baby’ contests, Ferradol’s Milkshakes (provided at hospital gatherings) and

Parke Davis giving away monograms to final year MBBS students at ‘specific

disease’ symposia in medical college in the 1960s. Lupin, Kopran and Cadila started

launching almost every product with the involvement of the target groups. From

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1980s, involvement of the general medical fraternity in the product development has

become almost a standard industry practice.

Wockhardt advertised its tonic (Winofit) and anti-obesity drug (Flabolin) without the

brand name in a local press and told patients to ask their general practitioners and

family physicians what the anti-obesity drug was all about.

Lupin involved chest specialists in the working of the company. From 1990 onwards,

companies like Torrent, Glaxo and Cipla started targeting individual through direct

marketing.

Extra-value strategy: Some of the brightest marketers keep rises low but necessarily

the lowest and find ways to offer value-extras that the lowest price competitors can’t

match. Dr Reddy’s Laboratories started this trend and today every company is extra

cautious about pricing any new product.

Medico-marketing: The purpose of medico-marketing is to promote corporate

products and services with the help of medical representatives and by other direct

response marketing methods. The Continuous Medical Education (CME) model has

been successfully used in medico-marketing.

Successful medico-marketing requires careful planning and organisation of

management.

Examples of medico-marketing strategy used to promote pharmaceutical products are:

Win Medicare celebrated a medico-marketing event for its new product Hepa-Merz, a

hepatoencephalopathy-related product. The medical concept was fully developed with

creative communication as a key platform. An innovative hypothesis, “liberation of

ammonia” to treat hepatoencephalopathy, was discussed among the gathering of

specialists at different regional centres. All of them were convinced of its efficacy.

The Upjohris’ medical-marketing consultants programme for the launch of new

products was exceptionally successful. The company took A-class medical

practitioners as marketing consultants in a few specific geographic areas and worked

through them for a period of two years, including the supervision of pre-launch and

post-launch tracking.

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The right med i a mix strategy

The right media mix, utilised by the company, can promote its products considerably.

The various promotional media used are:

Medical magazines and Journals (Physician’s Digest, Lancet, Headache, Drug

Today, CIMS, MIMS, IDR etc)

Conferences, Seminars and Symposia

Promotional trials

Newspaper advertising

Free-standing supplements

Conference videos

Video messages

Marketing strategy based on innovative distribution: In 2005, the marketing

strategy of the pharmaceutical company Sandoz included change in method of giving

discounts to carrying & forwarding agents (C&FAs) through a simple innovation.

Instead of paying direct percentage on sales to C&FAs, it started paying on the basis

of case lots. Each case lot weighed approximately 12-15 kg and on each case lot, Rs

8-10 was paid to the C&FA.

Table 4.4: Major alliances between Indian & International companies:

S.No Indian Company International Partner Objective Place of Operation

1 Cipla Novopharm Marketing International

2 Dr. Reddys’ Biomed Marketing International

3 Lupin Labs Fujisawa, Merck, Marketing & International

  Global Corp. Manufacturing  

4 Ranbaxy Elililly, Aventis, Marketing, Supply International

  Glaxo of Both bulk drugs & in India

5SmithKline

BeechamKnoll, Glaxo Marketing India

6 Panacea Biotec Chiron Marketing India

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As a result, the company not only improved the sales of its products, but also

managed to reduce the cost of operations by 1.2 per cent of its total turnover.

Public relations consultancies (PRCs)- an important part of marketing strategies: Most

of the pharmaceutical companies in India and abroad are nowadays hiring the services

of PRCs as part of their marketing strategies. Public relations cover a broad spectrum

of activities — from internal communication to external publicity and also financial

reporting. The major task of PRCs is to build a one-to-one, positive, effective,

motivating and self-assuring relationship with the consumer through mass or

individual media. It encompasses brochures, industry booklets, mailings, catalogues,

corporate communication devices and websites. All of these have their importance as

marketing tools.

Example: The services of PRCs had been utilised by Cipla as apart of its marketing

strategies for the launch of new products, when its major communication medium i.e.

medical representatives turned uncooperative. The company conducted meetings for

not more than 10 customers at a time and ensured that thousands such meetings took

place at different locations in the country. This helped Cipla in building one-to-one

relationship with its customers.

Contract Sales Organisations (CSOs)- A strategic Marketing Tool: Pharmaceutical

companies are using the services of CSOs as strategic weapon for increasing the

geographical coverage of their products, as well as to have competitive edge at key

moments.

Advantages of CSOs are:

Minimised fixed overheads

Managed resources at the launch of new product

Increased sales force whenever need arises. For eg. when a brand is under threat

from the competitor

Provide creative, short-term brand resources

Help in providing market development initiatives

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Allow companies to economically reach physicians they would not ordinarily be

able to call on, providing additional sales coverage tailored to a specific need

Entering into alliances, acquisitions, mergers & joint ventures with MNCs to market

and sell their products: The reach of marketing and distribution network is an

important determinant of success in the pharmaceutical industry. Hence, as an

important marketing strategy, companies are strengthening their marketing and

distribution network and thus improving their reach and efficacy.

A way to do this is to enter into alliances and joint ventures with other companies.

Nicholas Piramal is the prime example of a company that has entered into a number

of alliances with MNCs to market its product.

Clinico-promotional study

A clinico-promotional study is usually done by pharmaceutical companies which need

to take decisions concerning their own products and how they are to be sold. The only

way to properly execute an economic clinico-promotional study is thorough

understanding of a drug’s properties, the disease for which it has been approved, and

the marketing issues involved.

Every marketer needs the help of results from an economic clinico-promotional study

when he has to substantiate the claims of his brands, and demonstrate how the product

is differentiated in a crowded pharmaceutical market.

Eg. A company conducted clinico-promotional study for Syu, a nutritional protein

product, among adolescents at different orphanages and established the weight and

height benefits to a highly convincing degree. This became a platform for its

promotion.

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Direct-to-Consumer (DTC) marketing strategy

This is recent approach which has been used by various pharmaceutical companies

mainly abroad (USA and UK). USA has pioneered DTC advertising. The reason DTC

has become an area of interest over the last few years, is that it is a way of influencing

people who actually use the medicine.

DTC essentially means a campaign or communication programme intended for and

targeted to consumers. In relation to pharmaceutical products, the consumers may be

patient or family members, caregivers or the general public. Initially, doctors were

worried about the patients failing to understand the drug related information and

impairment of doctor /patient relationship, but DTC did not lead to any such

apprehensions and is now a mainstay of product promotion in the US.

Internet has totally rejuvenated direct marketing and DTC as a promotional medium.

Resources like Euro RSCG’ s Media Turf’s online tracking can help track individual

doctors online, which is immensely useful for pharma companies to deliver targeted

communication to them.

Defense Strategies

Besides promotional strategies, a number of defense strategies have also been used by

various pharmaceutical companies to market, promote & extend the life cycle of their

products.

These are:

New Indications or Uses of the Product: In US, a new indication can extend a

product’s protected life as the market exclusivity period is extended by three years for

each new indication. Often, companies more important indications during the launch

of the product & less important indications are introduced when product is at decline

stage in its life cycle. Eg. Lovenox, a product for curing thrombosis was launched

with one indication in orthopedic surgery by Aventis. Currently, it has eight

indications. By revealing more & more indications of the same drug, the company has

more than doubled its original peak sales for this drug.

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Reformulation

A similar strategy to gaining new indications is to produce a new formulation on an

existing marketed drug. This line extension will often be associated with a more

convenient dosing form or a longer lasting formulation. This strategy is most

commonly used where old technology is an immediate-release formulation requiring

multiple daily doses is replaced by a ’new technology’ once daily formulation of the

drug.

Pfizer defended its hypertensive drug - Procardia for a number of years with this

strategy.

Switching strategy

This strategy relies on moving patients from an older drug (whose patent is about to

run out) on to the newer version (which has patent protection). The theory is that by

the times generics of the original drug hit the market after its patent has expired,

patients have already been switched to newer drug and are unlikely to switch back to

the older, now generic drug. Pfizer successfully used this strategy to switch patients

on to Procardia XR from its original drug Procardia near the time, when Procardia’s

patent was about to expire.

Paying generic companies off

A dubious strategy of paying generic makers to delay them from entering the market

has also been used. E.g., Hoechst Marion Roussel (now part of Aventis) paid Andrx

US$ 10 million per quarter not to launch its generic version of Cardizem.

As a consequence of the mounting evidence of counterfeiting in Asia, companies in

India and abroad are hiring services of institutes such as ’Pharmaceutical Security

Institute’.

Counterfeit medicine is a product that is deliberately mislabeled with respect to

identity and/or source. Such medicines can affect the company’s image. Therefore,

companies are hiring the services of various agencies to check this grey marketing.

It can thus be concluded that the key determinants of success of any Pharmaceutical

industry, besides the cost and availability of capital are brand building (or brand

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Strength) and marketing strategies adopted by them as these have a profound impact

on growth and market share of all pharmaceutical companies.

GLOBAL TRENDS IN PHARMA PROMOTIONS & MARKETING

Fig. 4.4: Pharma’s Current Model

As the Verispan promotional audit data show, pharmaceutical companies spend a

disproportionate amount of their promotional budgets on face-to-face detailing. The

$11.2 billion does not even include the cost of samples! In contrast, the amount spent

on ePromotion is minuscule.

For every 100 sales rep visits to physician offices, only 56 actually see the physician

and of these 27 merely drop off samples without talking to the physician. Schecter

claims that when reps actually get to talk to physicians, the call only lasts 4.6 minutes

on average.

Fig. 4.5: Reduction in U.S. Primary care promotional spending

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Given these statistics, Schechter said Merck is on course to significantly reduce its

promotional spend by 2010 and estimates it will cut its field force spending by 9% in

2007 (see figure at left; which shows that the field force bar is lower in 2007 than in

2005.). According to PharmExec.com, however, "Merck spokeswoman Amy Rose

wasn't having any of it [talk about a 9% reduction in detailing]." "This is not a head-

count reduction," said Rose. "Our new model calls for an increased use of technology

[and metrics], and it is much more customer-focused."

If the recent iPhone craze proves anything, customer focus means including more

technology-based channels in the marketing mix. While pharma is focused on face-to-

face selling, physicians – like other consumers – are changing their media habits as

illustrated in this Google chart.

Fig. 4.6: Media consumption habits have changed

Consumers are spending more and more time online and less and less time reading,

listening to the radio, or watching TV. Media spending by all advertisers – not just

pharma – needs to shift to new channels that consumers are using and, according to

Google, this shift is overdue.

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Fig. 4.7: Consumers are spending

Engaging Customers on Their Terms

Schecter and other pharma business leaders are shifting and fully intend to leverage

innovation and technology. This shift will add a new dimension to pharmaceutical

advertising:

Engagement .

Reach and Frequency are the traditional factors used to measure marketing

effectiveness and ROI. Reach is how many "eyeballs" see your promotional message

and frequency is how often they see it. Technology adds another dimension to the

analysis: Engagement, which also encompasses depth. Certainly, pharmaceutical

products demand communications that offer engagement and depth much more so that

packaged goods for example. Several advertising associations are working to develop

a new metric to measure engagement.

This sounds exactly what Merck's Schechter had in mind when he talked about

embracing new ways to engage physicians. The most effective way of engaging

physicians and consumers using innovative technology is through Web 2.0 social

networking tools. The pharmaceutical industry so far has a poor track record when it

comes to using these tools effectively. And, like any powerful tool, when used

improperly, Web 2.0 tools can be "risky."

Back in 2006, Pharma Marketing News hosted a reader survey to predict future trends

in the pharmaceutical marketing mix. The survey asked readers for their opinions

regarding the impact and risk of several physician marketing channels. They were

also asked how they saw the mix shifting in the next few years.

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When evaluating impact, respondents were asked to think of reach, credibility, and

content richness as important factors -- the greater these attributes, the greater will be

the impact. Risk factors, on the other hand, include potential to cause customer

dissatisfaction or push back, increased regulation, negative publicity, etc. If marketers

should avoid the channel, then risk would be high.

The results of the survey can be plotted in graphical form:

Fig. 4.8: Physician Marketing Channels

Let's focus on traditional face-to-face promotion (rep) and eDetailing or epromotion.

While face-to-face promotion has a very high impact potential it is also risky and is

becoming even more risky, according to survey respondents. [Risky because of

increasing physician push back, denying reps access to physicians, and state laws

attempting to limit access to physicians by sales reps. This is what the downward red

arrow is showing. In fact, the tip of the arrow is where this channel may be at today!

eDetailing or ePromotion also has high impact. At the time this survey was run,

eDetailing was thought to be as “risky” as face-to-face selling, but now it has the

potential at least of being LESS risky and MORE impactful than traditional sales reps.

Hopefully, Merck's rejiggering of its marketing mix towards new technology will

become the standard by which other pharmaceutical companies evaluate their own

marketing plans. Or maybe, Merck has a unique product mix for which technology is

better suited to promote. In that case, we may not see other pharma companies follow

Merck.

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EVIDENCE OF ETHICAL FAILURES

Doctors are the main targets for the promotional activities of drug companies in

developing countries. With the power to prescribe and a high status in society their

opinion of a drug very often determines its sales success. It is therefore not surprising

that the majority of marketing spend by industry leaders goes towards direct-to-doctor

(DTD) promotion.

These marketing practices are common to most contexts whether in developing

countries or developed. However some issues are of particular concern to developing

countries where health budgets are smaller and resources have to stretch much further.

For instance in developing countries the lack of government funding for professional

development activities for health professionals can make drug company sponsored

meetings more valuable. Lack of resources for surgeries and even personal medical

resources can also make offers from drug companies more inviting. The sheer volume

of promotion as well as the types of cases we have come across in our research raises

serious concerns about whether drug companies are able to regulate their promotion

activities effectively, while ensuring high standards of consumer protection.

Gifts

Among the promotional tactics employed by pharmaceutical companies is the practice

of giving gifts to doctors. In developing countries, these range from small items such

as gifts, pens and notebooks to expensive foreign holidays, televisions, air

conditioners and even jewellery. However what stands out in the developing country

context is the practice of giving lavish personal gifts that have no pretence at medical

value. A Kashmiri newspaper reported a doctor as saying “Medical representatives of

pharmaceutical companies whose products may or may not be efficacious without any

qualms offer cash, refrigerators, colour televisions, laptops, PCs, mobile phones,

ovens, phone bills, cars, tuition fee of their children, and lots more.”

Similarly, one Indian doctor noted, ‘“The newer multinational and major players in

the market have started to hire marketing professionals and take their brand promotion

very seriously and many try to build a personal rapport with the doctor by

remembering special occasions like their birthdays and anniversaries and besides the

regular festivals. The companies have started to spend more and more in keeping the

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doctors and their employees happy rather than their customers. 'Gifting' of air

conditioners, washing machines, microwaves, cameras, televisions, and expensive

crystals is a normal accepted norm nowadays. So are frequent pampering in form of

CMEs [Continuing Medical Education meetings] and lectures in star hotels followed

by lavish dinners and cocktails.”

Such practices not only contravene the national industry code on ethical promotion,

but also are often nontransparent. These gifts may be hidden in official company

reports of spending under budget lines for seminars and events. As a result,

establishing an accurate picture of the actual costs associated with gifts to doctors can

be difficult for health watchdogs and consumer groups who are concerned about the

influence of drug companies on health professionals.

BUT DOES THIS GIFT GIVING MATTER?

A sales representative in India reported: “Since there is no documentation of these

gifts, the doctors can switch over from one product to another when perks of one

company exceed that of another. The doctors neglect other aspects of the drug like its

efficacy, suitability for the patient, the cost etc. With so many multinational

companies competing in India, the money spent over these activities is increasing day

by day.”

Our research brought to the fore three key areas where the interaction between

pharmaceutical companies and health professionals suggests an unhealthy

relationship, with significant conflicts of interest.

First, health professionals’ belief about gifts shows recognition of the fact that gifts do

have an impact on prescribing behaviour. This can promote irrational drug use by

consumers that is not based on reliable data on real needs, safety, efficacy and price of

the drug, but rather on the marketing tactics of individual companies. Second,

examples of the way in which the gift relationship between companies and doctors is

cultivated reveals a disregard for ethical practice. Finally, examples of how

prescribing behaviour is affected by gifts suggest that such practices negatively affect

consumer health and safety and may increase unnecessary spending on healthcare.

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HEALTH PROFESSIONALS’ BELIEFS ABOUT GIFTS

As a marketing strategy, in cultivating a gift relationship with doctors, drug

companies are in effect creating a relationship of reciprocity where, upon receiving a

gift, doctors may feel obligated to respond. Whether they are conscious of it or not is

not relevant. Existing literature suggests that doctors hold a range of views about

gifts. In general doctors readily accept gifts that are smaller and socially more

acceptable. There is a sense of ‘unique invulnerability’, that only ‘other’ doctors are

influenced by gifts. This theory of unique vulnerability suggests that doctors are more

willing to say that other doctors are influenced more than they are themselves, but this

hypothesis warrants additional research.

Fig. 4.9: Hypothesis warrants additional research

Key findings showed a high level of interaction between the pharmaceutical industry

and the medical profession. Although the latter recognize the influence of these

interactions on prescriptions and the elevation of the cost of the final product, they

find it appropriate to receive benefits.

86% receive medical samples frequently.

39% receive desk gifts.

19% receive invitations to congresses.

12% receive free lunches.

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Half of the doctors believe that receiving benefits from the pharmaceutical industry

has an influence on medical prescription, but only 27% accept this as influential in

their own prescriptions.

Doctors may be unaware of the fact that drug companies influence their prescribing

behaviour. Although many have suggested that doctors should distance themselves

from drug companies, it is easier said than done.

Sales representatives

According to their career profile, pharmaceutical sales representatives spend most of

their business time on the road, talking with pharmacists, hospital personnel,

physicians, patient advocacy groups, and even retirement homes, increasing the

visibility of their company’s products and the volume of their sales.

One to one visits from sales representatives are proven to be the most effective way to

promote drugs to doctors because they can identify the behaviour change stage and

the main motivators and decision-making styles of the person they are selling to and

adapt their approach accordingly. The main influencing techniques used by drug sales

representatives try to focus on doctors’ tendencies to trust experts, trust their peers

and trust likable (friendly and/or attractive) people, to be consistent with their

commitments and to act on reciprocal obligations when given gifts. Visits from sales

representatives are often coordinated with other methods such as providing gifts, free

samples or running advertising campaigns.

A study published in June 2007, revealed that medical sales representatives noted that

there were often inconsistencies between what they had been told to tell the doctor

during promotional visits and what was detailed in the literature. Also, doctors noted

that they received literature only if they repeatedly requested it. These social

responsibility failures pose significant threats in the context of a country like India,

which is a poorly regulated environment and is further complicated by a significant

uneducated consumer base and a highly privatised health system. Personal comments

by sales representatives and health professionals alike from many parts of the

developing world are suggestive of an ethically questionable relationship fostered by

drug companies.

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Brand education

It is clear that companies face a conflict of interest in providing an accurate picture of

negative impacts of their product. This presents a problem for doctors everywhere, but

particularly in developing countries, who rely heavily on the drug information

provided by the company and in many cases cannot access independently verified

data. However, doctors can also be complicit in the problem when they choose to

endorse a company’s marketing campaign or assume the role of a seemingly

“independent” key opinion leader to shape a positive perception of the drug among

health professionals. In some cases the pharmaceutical industry manages to coopt

academia and unduly influence what health researchers reveal about their findings, as

the non-profit organisation Doctors for Research Integrity asserts. One significant

result is that medical journal articles on new drugs may be ghost written and

influenced by drug companies’ public relations (PR) firm.

Despite obvious failures in their promotions vetting and compliance systems for

company codes, the industry continues to insist on a model of pure self-regulation.

What is needed is a rigorous system of oversight and continuous consultation among

key stakeholders including consumer advocates, the drug industry, government

agencies, and health professionals.

CAN SELF-REGULATION WORK?

"All advertising is inherently unethical. That's how you sell things" said a New York

attorney. Selling drugs is like selling any other commodity. Pharmaceutical

companies choose to spend more on medical drug promotion rather than on research

and development because drug promotion is what earns them money. There have been

numerous studies which have incontrovertibly stated that drug promotion influences

prescribing practices, a fact that is not acceptable to many doctors. If drug promotion

were not so successful, would the companies spend billions marketing their ware?

The World Health Organization (WHO), in an attempt to support and encourage the

improvement of health care through the rational use of drugs and to curb unethical

marketing practices, came out with a landmark "Ethical criteria for medicinal drug

promotion" in 1988 and has recommended their implementation to its member

countries. This document defines drug promotion as "all the information and

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persuasive activities by manufacturers and distributors in order to induce the

prescription, supply, purchase and/or use of medicinal drugs". It also suggests what

can be considered appropriate hospitality and gifts. There is evidence that drug

utilization problems are increasingly encountered in many developing countries due to

the unethical marketing practices of the pharmaceutical industry. Unfortunately the

guidelines drawn up by the WHO, are flouted in practice with impunity since there

are no effective legislative measures to support them.

The International Federation of Pharmaceutical Manufacturer's Association which had

first suggested a self regulatory code of pharmaceutical marketing practices in 1981,

adopted the revised version in 1994. There seems to be obvious double standards in

adoption of the code. While in the developed countries, these firms often publish

reasonably ethical advertisements which are published in medical journals, the very

same companies promote the same drug for different indications in developing

countries. The information is also insufficient, sometimes contains unproven scientific

claims and is published by many medical journals from these countries. In an attempt

to get a grip on the situation the International Committee of Medical Journal Editors

suggested that editors must take full responsibility for what appears in their journals.

Many journals appointed committees to examine advertising material before

publication. Yet this was beyond journals in many developing countries who were

eager to grab the money that advertising (ethical or unethical) brought in.

Even though it has been proven time and time again that drug advertising in India is

unethical, nothing much is being done to curb it. The annual conferences of the

various national bodies of medical specialities are a glaring example of how deep the

rot has spread. Today no medical conference is organised without getting financial

support from the pharmaceutical industry. In return for the lavish financial assistance,

companies are allowed to select speakers, choose the topics for discussion, advertise

their brand image and so on, a situation akin to the indoctrination done in terrorist

camps. If this situation is allowed to continue we shall have a nation full of doctors

who rely on the drug companies to dictate what they should prescribe.

Unfortunately, though India had a head-start in this direction with the constitution of

the Drug Enquiry Committee in 1930 under the chairmanship of Sir R.N. Chopra

which scrutinized the pamphlets of drugs which made spurious claims, we have not

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made a dent in this direction. The Drugs and Magic Remedies Act which came into

force in 1955 and was amended in 1961, 1967 and in 1992 have not been enforced

due to the apathy and general disinterest of the health care fraternity and the industry

refuses to be cowed down by legislative enforcements. Hamdard Dawakhana was

asked to recall 40 drugs. But they chose to file a writ in Supreme Court in 1959 on the

grounds that their right to free speech and right to carry on trade and business were

violated. The Supreme Court however, dismissed the petition. The drug industry fast

learnt to take advantage of the loopholes in the law and continued with unethical

marketing practices. The problem became so serious that S. Narayen, Commissioner,

FDA Maharashtra, in the foreword to a book on the Drugs and Magic Remedies act

by S.W.Deshpande in 1994, admitted that 'economic liberalization seems to give the

impression that manufacturers have the right to sell and the market place is what must

decide the rules of the game. In the dizzy of activity, various ploys are used to sell the

product. Some of these not only mislead the consumer but can also be harmful'.

The internet is perhaps one of the greatest boons to the medical establishment.

Doctors are able to check the validity of information given to them by drug companies

and therefore it is now being reported that drug companies are hesitant to tell outright

lies as before. But the industry relies on the fact that doctors are busy people who

would not find the time to counter check information they have received. The ever

innovative marketing executives have come up with yet another brilliant ace in the

form of direct-to-consumer (DTC) advertising. This is the advertising of branded

drugs through popular media. In India we are already exposed to television

advertisements for inhalers in bronchial asthma, insulin for diabetes mellitus. This is a

scaled down, modified version of DTC advertising. If DTC is approved, then drug

companies will dictate what doctors prescribe through their patients.

A small silver lining is perhaps the efforts of a few medical colleges where

undergraduate students and interns are taught to critically analyze drug promotional

material and are sensitized to the "tricks of the trade" of the pharmaceutical

companies. The "one on one" interview with the medical representative is perhaps the

most powerful tool of drug promotion which is followed worldwide. Interns are now

being taught to "take control" of these interviews and use them to get reliable

information. Videos have been made with the assistance of the WHO and are being

used to train interns on some aspects of dealing with medical representatives. It is too

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early to judge what impact these interventions will have, but it must be kept in mind

that tiny drops of water make a mighty ocean.

These efforts, though isolated and small at present, will nevertheless reach a critical

mass which shall be self propagating one day. It is hoped that in future we shall have

a new generation of doctors who demand that all drug promotion be ethical. Unless

this demand comes from the medical establishment who refuse to take lavish gifts, eat

lunches and dinners sponsored by drug companies, and attend CME programmes paid

for by the companies we can never expect drug companies to self regulate.

Consumers trust doctors to act in the best interests of their patients. However, most

consumers are largely unaware of the influence of the pharmaceutical industry’s

marketing on the very health professionals they rely on. Between 1995 and 2005, the

percentage of total spending on sales and marketing was by far the biggest corporate

expense for the pharmaceutical industry. The excesses of drug marketing are well

recognized by industry insiders. A survey conducted by PricewaterhouseCoopers

showed 94% of industry stakeholders said that pharmaceutical companies spent too

much money on advertising.

Weak regulatory capacity…

Even in India, a fast emerging economy with a pharmaceutical industry of its own and

a relatively strong civil society, there is inadequate oversight of the drug industry.

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According to a 2003 memorandum of the All India Drug Control Officers

Confederation, in order to be effective, the number of drug inspectors needed to more

than quadruple from 700 to 3000.

Results in risks to consumer safety

Campaigners for the rational use of drugs say that regulatory authorities in India are

slow to protect consumers from drugs that have been banned, withdrawn, or marketed

under restrictions in North America, Europe, and many other Asian countries. For

example, Rofecoxib, the internationally recalled antiarthritis drug sold by Merck &

Co. as Vioxx, Ceoxx and Ceeoxx, was among some of the controversial drugs

available in the domestic market in 2009.The drug was officially banned in India, in

October 2004, a month after the official Merck recall. Dr C.J. Shishoo, a trustee at the

Consumer Education and Research Centre, a CI member and consumer action group

based in Ahmedabad, observes that at least half a dozen drugs with dubious safety

profiles are still being marketed in India as there were no adverse reports available

with the regulator.

This is supported by a senior official from the central drug regulatory department in

India who was reported as saying, “Currently our mechanism is grossly inadequate to

tackle the issues related to pharmacovigilance as there are no public interaction

systems wherein the doctors or patients can share their experiences with the regulator

directly. Since the department is also facing severe people crunch, it is not able to

dedicate special cells or people with the task of collecting patient responses. Hence,

whenever there is a recall of a drug abroad, we do not have any relevant data to take

follow-up actions. This makes the department always dependent on the drug alerts of

the US Food and Drug Administration or European regulators to initiate an action

here.”

Despite the obvious role aggressive marketing played in magnifying the harmful

impact of drugs like VIOXX12, many governments assert that they favour a co

regulatory approach (i.e. industry code compliance and legislation) to ensure ethical

drug promotion. In practice though, most governments relegate drug marketing to

self-regulation by the industry itself. Legislation in many countries is outdated and

does not necessarily cover consumer protection concerns for modern drug promotion

methods via disease awareness campaigns, patient groups or the internet.

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Weak codes of conduct

Moreover, many industry-based systems for monitoring drug promotion mainly rely

on complaints mechanisms. These mechanisms are largely inadequate because too

many violations are missed. This conclusion has been supported by a review of

research in a 2009 report by the World Health Organization (WHO) and Health

Action International (HAI).

In addition, the sanctions meted out by industry bodies are often negligible and do not

serve as a deterrent for irresponsible behaviour by the companies or their employees.

If there are no sanctions, or only small fines are imposed when a violation is

discovered, then the deterrent effect is minimal. It may be more cost effective from

the company’s point of view, given the large investment it has already made on

advertising, to pay the fine for an extended period of time rather than withdraw the

advertisement.

THE IMPACT OF IRRESPONSIBLE MARKETING

Developing countries face multiple health challenges as a result of widespread

poverty and under-funded public health systems, and it would be unfair to place them

all at the door of the pharmaceutical industry. However the question to be asked of

pharmaceutical companies is whether, in this context, their marketing practices help

or hinder efforts to improve health and on at least three counts the answer appears to

be ‘no.’

In 2009, the Indian National Commission on Macroeconomics and Health labelled 10

out of 25 top selling brands of medicines in the country as being either “irrational or

non-essential or hazardous.” Those brands are listed in the table below and include a

number of market leaders. These issues are important in developed and developing

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countries but are particularly pressing in developing countries where each dollar that

is misused is a dollar that can’t easily be replaced.

Pushing the wrong pills

Finally there is the question of whether the pharmaceutical industry is simply too

market driven. Operating in a competitive market and with falling revenues there is

immense pressure on companies to deliver the next ‘block buster’ drug. The

inevitable pressure on companies is to focus on the wealthiest markets and the most

marketable conditions. This has led to a concentration on ‘me too’ drugs that tap into

lucrative markets but add little additional medical value and even ‘disease mongering’

or the medicalisation of conditions that had previously been seen as lifestyle issues

and only in extreme cases a cause for medical intervention.

By promoting drugs that are not needed, pharmaceutical companies could detract

from efforts to improve the overall public health of consumers in developing

countries. It is true that many other factors such as poor training and a lack of

regulatory infrastructure are also at the root of these problems. However as global

leaders, with financial clout to affect change, drug companies and particularly the

market leaders have social responsibilities in ensuring their marketing activities do

not lead to negative outcomes for patients and consumers of their products.

GlaxoSmithKline

What they say: “We are aware of the sensitivity and concerns regarding the

marketing of medicines and we are absolutely committed to high ethical standards.

We have developed marketing codes and policies and provide training to guide sales

representatives, to ensure that they behave ethically and comply with the law.”

What they do: Following communications on our research questionnaire, a member

of staff at GSK’s Corporate Responsibility team said: “I have forwarded your details

to someone else at GSK and if they are interested in participating, they will contact

you directly.” We received no response or further acknowledgement to our queries

from GSK.

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Sanofi-Aventis

What they say: “In its promotional practices, Sanofi-Aventis adheres to both national

and international codes governing the profession. The Group has also developed

responsible marketing guidelines that cover promotional materials, congresses and

seminars, pharmaceutical sales calls and post-marketing studies. Continuous training

for medical sales representatives (who number 35,000 worldwide) is designed to

ensure the quality of their presentations during promotional visits.”

What they do: Unlike most of their counterparts in the industry, this company did not

allow us to speak directly to senior CSR managers. After being forced to engage with

the company through the only means available – an on-line query form – we received

no response from the company on their marketing practices in emerging markets.

STRENGTHS AND WEAKNESSES OF INDIA’S PHARMACEUTICAL

INDUSTRY:

India’s comparative advantages lie in its cost competitiveness, its reverse engineering

experience, its large pool of less expensive English-speaking scientific and

engineering workers, and its well-developed chemical industry infrastructure. India’s

pharmaceutical companies can also operate at much lower profit margins that their

Western counterparts. Today, India produces some of the cheapest drugs in the world,

especially because labor costs are 50 to 55 percent cheaper than in the West. Industry

experts indicate that infrastructure costs are 40 percent lower and fixed cost are

estimated to be 12 percent to 20 percent less that in the United States and Western

Europe. Consequently, India can produce bulk drugs that cost 60 percent less that in

the West and can open a production plant in India 40 percent cheaper than in

developed countries. Because of this, India has become a hub for pharmaceutical

research and development and clinical trials for many leading foreign pharmaceutical

companies.

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Table 4.5: Strengths and weaknesses of India’s pharmaceutical industry

The challenge facing pharmaceutical marketers in the next decade will be to

demonstrate value of product through promotional innovation, combined with the

required emphasis on efficiency and safety of their product. To do so, they should turn

to pharmacoeconomics--an evolving field that examines the issues in the context of

the market's health care system. Health care system, of what is understood of the term,

differs from country to country, place to place and city to city. Lay persons in India

tend to examine only single patient cost. But from a social perspective one may want

to know what sort of treatment option minimizes overall costs. In the future the

degree of fragmentation is likely to decline significantly wide product portfolio and

distribution strength could become a key competitive advantage among the larger

players. Smaller players focused on research and development will probably be

approached for alliance by larger companies. Domestic companies with International

research and development or marketing ties are likely to succeed. In long term as

companies established major presence in other parts of wider health care

pharmaceuticals chain, there is likely to e an emergence of a new set of competitors --

the integrated health care firms -- that will have significantly greater power than pure

pharmaceutical companies.

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67

CHAPTER – 5METHODOLOGY &

PROCEDURE OF WORK

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METHODOLOGY & PROCEDURE OF WORK

A Research Methodology defines the purpose of the research, how it proceeds, how to

measure progress and what constitute success with respect to the objectives

determined for carrying out the research study. The appropriate research design

formulated is detailed below.

Exploratory research: this kind of research has the primary objective of development

of insights into the problem. It studies the main area where the problem lies and also

tries to evaluate some appropriate courses of action. The research methodology for the

present study has been adopted to reflect these realties and help reach the logical

conclusion in an objective and scientific manner. The present study contemplated an

exploratory research

Research Design

The research design is the basic framework, which provides guidelines for the rest of

the research process. The present research can be said to be exploratory. The research

design determines the direction of the study throughout and the procedures to be

followed. It determines the data collection method, sampling method, the fieldwork

and so on.

Nature of Data

Primary Data: Primary data is basically fresh data collected directly from the

target respondents; it could be collected through Questionnaire

Surveys, Interviews, Focus Group Discussions Etc.

Secondary Data: Secondary data that is already available and published. It could

be internal and external source of data. Internal source: which

originates from the specific field or area where research is

carried out e.g. publish broachers, official reports etc.

External Source: This originates outside the field of study like books, periodicals,

journals, newspapers and the Internet.

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Data Collection

Primary data: Primary data was selected from the sample by a self-

administrated questionnaire in presence of the interviewer.

SAMPLE SIZE:

Sample size : 100

Sample area : New Delhi

Sample Unit : Officials of many pharmaceutical companies, medical

Practioneers, medical representatives in New Delhi

SECONDARY DATA: Secondary data was collected through

Articles,

Reports,

Journals,

Magazines,

Newspapers and

Internet

Sampling Technique

Random sampling technique is generally employed to extract the fruitful results. This

includes the overall design, the sampling procedure, the data collection methods, the

field methods and the analysis procedures

Sampling Procedure Actually Employed:

The process employed to select the sample was simple random sampling. Simple

random sampling refers to that sampling technique in which each and every unit of

the population has an equal and same opportunity of being on the sample. In simple

random sampling, which item gets selected is just a matter of chance.

Analytical Tools:

Simple statistical tools have been used in the present study to analyze and interpret the

data collected from the field. The study has used percentiles method and the data are

presented in the form of tables and diagrams.

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70

CHAPTER – 6ANALYSIS OF DATA

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DATA ANALYSIS

1. For how many years you are practicing as a medical practicener

(Doctor)?

Less than one year ---------------------------------- 17 per cent

From one to five years ----------------------------- 32 per cent

Five to Ten years ----------------------------------- 36 per cent

More than Ten years ------------------------------- 12 per cent

Can not remember --------------------------------- 03 per cent

Fig 6.1: Practicing as a medical practicener

Interpretation:

At the initial stage of the research, an attempt was made to understand the

profile of the doctors in terms of their experience in the industry. Great care

was taken to ensure that the sample is adequate and representative of the

universe.

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2. Do you agree that India’s pharmaceutical industry is one of the fastest

growing segments of the Indian economy?

Agree -------------------------------------- 43 per cent

Strongly Agree --------------------------- 37 per cent

Disagree ---------------------------------- 09 per cent

Strongly Disagree ----------------------- 04 per cent

Do not know/ Can not say ------------- 07 per cent

Fig 6.2: The fastest growing segments of the Indian economy

Interpretation:

India’s pharmaceutical industry is one of the fastest growing segments of the

Indian economy and this is also one of the vital industrial segments which are

directly related to the health of the nation.

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3. Do you agree that the marketing strategy of the pharmaceutical industry

should be different from the marketing strategy in non-pharmaceutical

segments?

Agree ------------------------------------ 50 per cent

Strongly Agree ------------------------- 32 per cent

Disagree -------------------------------- 10 per cent

Strongly Disagree -------------------- 04 per cent

Do not know/ Can not say ---------- 04 per cent

Fig 6.3: Pharmaceutical segments

Interpretation:

The structure and the dynamics of the pharmaceutical industry are different

from that of other industrial domains. This is what necessitates the

pharmaceutical sector to formulate a unique marketing strategy to suit their

industry requirements and that appears to be different, in practice and

normative sphere, from other industries.

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4. Do you agree that institutional selling is quite prevalent when it comes to

pharmaceutical market in India?

Agree ------------------------------------- 44 per cent

Strongly Agree ------------------------- 30 per cent

Disagree -------------------------------- 10 per cent

Strongly Disagree --------------------- 06 per cent

Do not know/ Can not say ------------ 10 per cent

Fig 6.4: Pharmaceutical market in IndiaInterpretation:

In general, business in pharmaceutical market is conducted in two major ways,

that is, either by institutional selling or through trade business. The

respondents were of the opinion that institutional selling is quite prevalent in

the Indian pharmaceutical industry.

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5. Do you agree that the pharmaceutical companies need to use innovative

and better promotional measures for selling their products?

Agree -------------------------------------- 60 per cent

Strongly Agree --------------------------- 37 per cent

Disagree ---------------------------------- 01 per cent

Strongly Disagree ----------------------- 00 per cent

Do not know/ Can not say ------------- 02 per cent

Fig 6.5: Innovative and better promotional measures for selling their products

Interpretation:

Even though it appears to be a serious industry on which the health of the

nation rests, a deeper understanding of the industry will make it clear that

business practices and sales promotion measures are a common thing and

gradually becoming more aggressive and competitive among the

pharmaceutical companies in India.

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6. Does the Pharmaceutical companies offer gifts to the doctors to influence

their prescriptions in favour of their company medicines?

Yes -------------------------------------------- 95 per cent

No --------------------------------------------- 01 per cent

Do not know/ Can not say ----------------- 04 per cent

Fig 6.6: Prescriptions in favour of their company medicines

Interpretation:

Pharmaceutical marketing experts are aware that well timed advertising directed

to doctors tends to boost sales of the brand that spent the marketing dollars. In the

case of marketing directly to health professionals, the question is whether

promotion is (as most drug companies claim) primarily information on how the

drug works or is intended to persuade doctors to prescribe the drug more

frequently. The practice of offering gifts to the doctors to influence their

prescriptions is a common strategy among the pharmaceutical companies.

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7. Out of the following which one is more correct when it comes to the

promotional strategy of pharmaceutical companies in the view of the

doctors?

They aim to inform about the product ----------------- 22 per cent

They aim to persuade to purchase --------------------- 60 per cent

Other motives -------------------------------------------- 03 per cent

Do not know/ Can not say ----------------------------- 15 per cent

Fig 6.7: Promotional strategy of pharmaceutical companies

Interpretation:

The promotional strategy of the pharmaceutical companies is more oriented

towards persuading the doctors to prescribe their products and the patients to

purchase their products than simply to display information on the quality and

availability of the product. This is one criterion which makes the marketing

strategy of the pharmaceutical companies different from that of others.

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8. Do you agree that unethical standards exist in the promotion of

pharmaceutical products in India?

Agree ------------------------------------- 52 per cent

Strongly Agree ------------------------- 20 per cent

Disagree -------------------------------- 20 per cent

Strongly Disagree --------------------- 03 per cent

Do not know/ Can not say ------------ 05 per cent

Fig 6.8: Promotion of pharmaceutical products in India

Interpretation:

Adherence to ethical standards while pursuing the promotional strategy for selling

their products is a concern in the pharmaceutical industry. It is an accepted fact

that the promotional measures does contain unethical practices. It is for the

government, the industry and the consumers to put a comprehensive effort to

ensure that the practices of unethical standards are withdrawn from the health

industry.

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9. Your recommendation to the industry and government regarding the

promotional strategy of the pharmaceutical companies? You can choose

more than one option.

Implement, improve and monitor legislation ----------------- 74 per cent

Measures to improve the transparency of drug companies’ marketing

activities ---------------------------------------------- 86 per cent

Stop the practice of gifts to doctors ----------------------------- 67 per cent

Ensure codes of conduct on drug promotion ------------------- 70 per cent

Other measures ----------------------------------------------------- 12 per cent

Do not know/ Can not say ---------------------------------------- 01 per cent

Fig 6.9: The industry and government regarding

Interpretation:

Whilst the pharmaceutical industry clearly has an important role to play in

tackling the health challenges their involvement in the promotion of medicines

presents a serious conflict of interest. It is equally important that health

professionals have access to independent and up to date advice on medicines so

that they can make informed judgments about the most appropriate medication for

patients.

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10. Do you think that the entry of Multinationals is a Major Challenge to the

domestic Players in the Pharmaceutical Market and are they ready to

face the Challenges of the Foreign Players?

Yes ----------------------------------------------- 36 per cent

No ------------------------------------------------ 54 per cent

Do not know/ Can not say--------------------- 10 per cent

Fig 6.10: The Challenges of the Foreign Players

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11. What type of Marketing Strategy would you prefer to expand your

Market size?

Fig 6.11: Market size

B2B-------------------------------------------------------------- 23 PER CENT

B2C -------------------------------------------------------------32 per cent

Both -------------------------------------------------------------45 percent

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12. What type of Marketing Strategy does you as More Profitable?

Fig 6.12: More Profitable

B2B-------------------------------------------------------------- 24 per cent

B2C ------------------------------------------------------------- 47 per cent

Both ------------------------------------------------------------- 31 percent

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13. What do you think is the Major challenge from the Marketing point of

view for the Pharmaceutical Industry in India?

Fragmentation of the market ---------------------------- 38 per cent

Market risk due to lack of price control mechanism- 22 per cent

MNCs ------------------------------------------------------ 23 per cent

Others ------------------------------------------------------ 17 per cent

Fig 6.13: Major challenge from the Marketing

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14. What innovative distribution channel do you suggest to better market your

products?

Better consumer supply chain---------------------------------------------34 per cent

Emotional Branding ------------------------------------------------------- 42 per cent

Alliance with other corporate leaders for promotion of the product-12 per cent

Greater media participation and power branding-----------------------10 per cent

Others ------------------------------------------------------------------------ 02 per cent

Fig 6.14: Suggest to better market your products

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15. Are you aware that the pharmaceutical companies in India are shifting

their focus from conventional method of marketing to non-conventional

method of marketing?

Yes --------------------------------------------86 percent

No ---------------------------------------------05 percent

Do not know/ Can not say------------------09 per cent

Fig 6.15: The pharmaceutical companies in India are shifting their focus from

conventional method of marketing

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16. Do you think that market ethics/ medical Ethics are a major factor in the

new distribution channel of marketing?

Yes ----------------------------------------------------- 57 per cent

No ----------------------------------------------------- 28 per cent

Do not know/ Can not say -------------------------- 15 per cent

Fig 6.16: Distribution channel of marketing

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17. Do You Think That These Non-Conventional Marketing Methods Are

Effective Methods Of Pharma Marketing In The Present Age?

Yes -----------------------------------------------77 percent

No ------------------------------------------------12 percent

Do not know/ Can not say--------------------11 per cent

Fig 6.17: Pharma Marketing in the Present Age

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18. Do you believe that technology utilization and innovative distribution

channels will help in marketing of Pharma products in India?

Yes------------------------------------------ 75 per cent

No------------------------------------------- 07 percent

Do not know/ Can not say--------------- 18 per cent

Fig 6.18: Distribution channels will help in marketing of Pharma products in India

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19. Major weakness of the pharmaceutical industry’s marketing strategy.

Branding --------------------------------- 07 per cent

Publicity --------------------------------- 09 percent

R&D ------------------------------------- 77 percent

Do not know / can not say ------------ 07 per cent

Fig 6.19: Major weakness of the pharmaceutical industry’s

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20. Do you follow branding of products as a marketing strategy?

Yes ----------------------------------------------------------------------- 74 percent

No ------------------------------------------------------------------------ 05 percent

Do not know/ Can not say -------------------------------------------- 21 percent

Fig 6.20: Products as a marketing strategy

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21. Do you have a dealer network? Do you sell directly or through dealers?

As regards their marketing strategy, it could be derived from their responses

that they have a large dealer network. A customer may also contact their

branch office in his/her area to get the names and addresses. They can also

supply sections directly. For smaller lots, the traders/ dealers may be

contacted.

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22. Do you think that foreign direct investment (FDI) should be allowed in

the pharmaceutical sector in India?

Yes------------------------------------------------- 21 percent

No-------------------------------------------------- 43 percent

Do not know/ Cannot say----------------------- 36 percent

Fig 6.20: Pharmaceutical sector in India

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93

CHAPTER – 7FINDINGS,

INFERENCES & RECOMMENDATIONS

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FINDINGS, INFERENCES & RECOMMENDATIONS

India's pharmaceutical market currently stands ninth in the world market for

pharmaceuticals with a 1.5% share. The market was valued at more than $3 billion

last year (1998). At its annual growth rate of 15% (almost double the world's 6%

annual growth rate), this market is expected to reach $6 billion by 2001 and should

more than double to $13.3 billion in 2006. India's official OTC market currently

stands at over $130 million, and the industry's heart disease sector is expected to grow

from $90 million now to more than $350 million in 2009.

Current demand in the Indian pharmaceutical sector stands at about $4 to $5 billion,

and is forecast to increase at an annual rate of 15 - 20% in the future. Nevertheless,

average per capita expenditure on pharmaceuticals in India is only $3 -- compared to

$412 in Japan, $222 in Germany and $191 in the US. This is due in part to the

prevalence of alternative healing methods in India, such as ayurvedic medicine and

homeopathy, but also because prices for drugs have been kept artificially low by the

Indian government. In fact, India's pharmaceutical industry is one of the most highly

regulated industries in the country. Price controls have a strong effect on profitability

in the industry, and weak patent protection poses a long-term threat to investment in

India's drug market. Foreign firms also find it difficult to operate in India due to

arbitrary Bureau of Industrial Cost and Pricing (BICP) pricing changes, arbitrary local

FDA decisions, high import duties (about 42%) and complex import procedures.

However, while the pharmaceutical sectors in India will most likely stay regulated in

the short term, there are plans for reform. The sheer size and growth of India's

domestic pharmaceutical industry is making it increasingly difficult for the

government to regulate prices for every single firm, and pressure from the World

Trade Organization is also speeding up discussions within the national government to

improve patent protection. As a result, foreign pharmaceutical firms can expect

improved market opportunities in India's enormous drug market over next several

years.

The Indian pharmaceutical industry is highly fragmented -- there are now more than

20,000 domestic manufacturers of end-use pharmaceuticals, particularly because of

the industry's low capital requirement and the lack of product patents. Only about 300

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of these are in the organized sector. This structure causes intense competition,

especially in the bulk drug markets, with profitability falling as demand expands.

For value purposes, drugs in India are generally classified into two categories -- bulk

drugs and formulations. Due to India's low overhead costs, bulk drugs comprise the

largest sector in the country's pharmaceutical market. India’s bulk drug sector also

makes up about 6% of the international bulk drug market. Drug intermediates are used

as raw materials for the production of bulk drugs, which are either sold directly or

retained by companies for the production of formulations. Formulations can be

subdivided into generic drugs and branded or "ethical" drugs, the latter of which are

made under process patent and sold under a separate brand name. Expected short-term

growth for the two types of drugs has been 20% for bulk drugs and 15% for

formulations.

The import of finished pharmaceuticals is almost negligible, and confined to very

specific types like anti-cancer drugs. In 1994, the import of drugs, pharmaceuticals

and intermediates was estimated at $450 million, and included the following:

antibiotics, penicillin and its salts, erythromycin and its preparations, vitamins and

provitamins, vaccines (polio, human and veterinary), preparations containing insulin,

caustic and other hormones, and tetracycline and its preparations.

Essential drugs comprised of antibiotics, antibacterial, anti-TB, anti-parasitic, and

cardiovascular constitute a major portion of turnover of the industry. Indian

companies dominate this class of drugs with a market share of 71%. Multinational

companies are reluctant to enter these markets as most of them are under government

price controls.

Pharmaceutical Industry is one of the most intense knowledge driven industry, which

is continuously in a state of dynamic transition. Indian pharmaceutical industry is

climbing up the value chain from bringing a pure reverse engineering industry focus

on domestic market. The industry is moving towards basic research driven expert

oriented global presence and providing wide range of value added quality product and

services. The pharmacy formulation market varies radically from the consumer

market in many ways. The rules governing the pharmacy market are different except a

few over-the-counter (OTC) drugs. Pharma companies are not allowed to publicly

market their products. Marketing has to be restricted to promotional campaigns,

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advertisement only in medicinal magazines, journals etc., through medical

representatives. It is not a mean of mass communication, which is usually applicable

to consumer products. In the process of pharmaceutical marketing, market

segmentation, targeting and brand differentiation is considered to be challenging

compared to the consumer marketing.

Unlike any other businesses, marketing mix and its operatives for Pharma industry are

very peculiar. The pharmaceutical industry is one of the few which cater to unique

situations. Here the decision maker is the prescriber i.e. doctor while actual user of the

product is a patient. Patient purchases product only because of doctor’s advice and

hence product should satisfy the conditions of physician. Even if all other parameters

are correct, the product might still fail because of improper promotion. Personal

selling is the major promotional method in pharma marketing.

Brand management, particularly promotion is a very difficult task in every Industry /

Business. It is particularly difficult in those businesses where the competition is

intense, market is crowded with variety of similar looking products and especially,

when the end user cannot make choices of his/her own, but has to use the product on

some expert’s recommendations. Pharmaceutical is such one of the most intense

knowledge driven industry, which is continuously in a state of dynamic transition.

Pharmacy can be defined as “Complex matrix of process, operations and organization,

involved in the discovery development and manufacture of drug and medication.” The

pharmaceutical industry is the lifeline industry, which plays a very important role in

building strong human capital of country and very essential for economic growth and

development. Indian pharmaceutical industry is climbing up the value chain from

bringing a pure reverse engineering industry focus on domestic market. The industry

is moving towards basic research driven expert oriented global presence and

providing wide range of value added quality product and services.

Considering the complexities in marketing process in pharmaceutical business, while

launching a new formulation in the existing markets or launching new formulations in

the new markets, product differentiation is necessary for proper brand promotion.

Since, for the prescription products, the end-customer, i.e. patient or his/her relatives

are unable to take any decision and the product is necessarily recommended by the

expert, i.e. physician or doctor, it is imperative that this brand promotion efforts to be

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aimed at primarily towards the physician or doctor and secondarily to the drug retailer

as he plays an important role in dispensing the prescribed brand. While launching the

new formulation, there can be dilemma in the mind of the filed manager on diverting

existing field force for the promotion of the field force, perhaps at the cost of old and

established products. However, it is most necessary to do so as it can only help

product differentiation, brand promotion and stabilization of the new product in the

market. Nevertheless, one question remains and that is whether, the research findings

are universally true or they are geography specific. One can get the answer only when

such studies are conducted at multiple places simultaneously. The results of such

studies can be generalized to arrive at possible answer. Companies realize it is often

not enough to spend like your competitor. In fact, you have to outspend the

competition, especially in areas such as market research and patient education, to

make significant impact on your position in the market

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98

CHAPTER – 8CONCLUSION

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CONCLUSIONS

Implement, improve and monitor legislation in line with the WHO Resolution on

the Rational Use of Medicines and the WHO Ethical Criteria for Medicinal Drug

Promotion.

Support the provision of independent information on drugs for consumers and

health professionals.

Implement and enforce a ban on gifts to doctors.

Enforce strict sanctions that will deter poor corporate practice in drug promotion.

Take measures to improve the transparency of drug companies’ marketing

activities and seriously address the conflict of interest encountered in drug

companies’ funding of medical education.

Ensuring high standards in the promotion of medicines is important to consumers’

health and helps to save money for health providers and patients. Without proper

controls consumers can be subject to misleading or inaccurate claims and the

promotion of expensive branded medicines that have no greater medical value than

cheaper non-branded products. Whilst the pharmaceutical industry clearly has an

important role to play in tackling the health challenges their involvement in the

promotion of medicines presents a serious conflict of interest.

It is equally important that health professionals have access to independent and up to

date advice on medicines so that they can make informed judgements about the most

appropriate medication for patients. Governments must make continued medical

education (CME) a priority and alleviate the need for doctors to rely on industry-

dominated information provision mechanisms.

Improved regulation of drug promotion will generate a number of benefits for various

stakeholders. Consumers will have a better chance of getting the most appropriate

drug for their condition. Regulations that lead to improved drug use can lower direct

costs (e.g. subsidy costs and import costs) which should be welcomed by governments

and tax payers. Finally, socially responsible drug companies will also benefit if

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regulation helps to create a level playing field and prevent unscrupulous companies

from manipulating the market through irresponsible marketing.

The pharmaceutical industry

Key recommendations at the company level:

Stop the practice of gifts to doctors

Implement rigorous policies on vetting of drug promotion materials and adherence

to existing codes of conduct

Provide transparent and verifiable information on the precise nature of relationships

and associated funding for all stakeholder groups, including health professionals,

pharmacists, students, journalists, clinical research organizations and patient groups.

At an industry-wide level:

Ensure codes of conduct on drug promotion extend to interactions with health

professionals AND consumers.

Invest in innovative partnerships with government and civil society organisations so

that corporate funding of disease awareness campaigns, and CME may be channelled

via blind trusts in line with specific health priorities of consumers at a community or

national level.

According to IFPMA, “promotional activities must be consistent with high ethical

standards and information should be designed to help health care providers improve

services to patients. Information must be provided with objectivity, truthfulness and in

good taste and must conform to all relevant laws and regulations. Claims for

therapeutic indications and conditions of use must be based on valid scientific

evidence and include clear statements with respect to side effects, contraindications,

and precautions.“ It also stresses that “high standards of ethical behaviour shall apply

equally to marketing of pharmaceutical products in all countries, regardless of the

level of development of their economic and health care systems.”

Fundamental and systemic changes are required to ensure that the promotion activities

of companies respect consumer rights to safe and reliable products and to

independently verifiable information about the safety and efficacy of those products.

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101

CHAPTER – 9SUMMARY OF THE PROJECT REPORT

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SUMMARY OF THE PROJECT REPORT

The import of finished pharmaceuticals is almost negligible, and confined to very

specific types like anti-cancer drugs. In 1994, the import of drugs, pharmaceuticals

and intermediates was estimated at $450 million, and included the following:

antibiotics, penicillin and its salts, erythromycin and its preparations, vitamins and

provitamins, vaccines (polio, human and veterinary), preparations containing insulin,

caustic and other hormones, and tetracycline and its preparations.

For value purposes, drugs in India are generally classified into two categories -- bulk

drugs and formulations. Due to India's low overhead costs, bulk drugs comprise the

largest sector in the country's pharmaceutical market. India’s bulk drug sector also

makes up about 6% of the international bulk drug market. Drug intermediates are used

as raw materials for the production of bulk drugs, which are either sold directly or

retained by companies for the production of formulations. Formulations can be

subdivided into generic drugs and branded or "ethical" drugs, the latter of which are

made under process patent and sold under a separate brand name. Expected short-term

growth for the two types of drugs has been 20% for bulk drugs and 15% for

formulations. Pharmaceutical Industry is one of the most intense knowledge driven

industry, which is continuously in a state of dynamic transition. Indian pharmaceutical

industry is climbing up the value chain from bringing a pure reverse engineering

industry focus on domestic market. The industry is moving towards basic research

driven expert oriented global presence and providing wide range of value added

quality product and services. The pharmacy formulation market varies radically from

the consumer market in many ways. The rules governing the pharmacy market are

different except a few over-the-counter (OTC) drugs. Pharma companies are not

allowed to publicly market their products. Marketing has to be restricted to

promotional campaigns, advertisement only in medicinal magazines, journals etc.,

through medical representatives. It is not a mean of mass communication, which is

usually applicable to consumer products. In the process of pharmaceutical marketing,

market segmentation, targeting and brand differentiation is considered to be

challenging compared to the consumer marketing. Fundamental and systemic changes

are required to ensure that the promotion activities of companies respect consumer

rights to safe and reliable products and to independently verifiable information about

the safety and efficacy of those products.

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103

CHAPTER – 10ANNEXURES

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ANNEXURE-1

QUESTIONNAIRE

1. For how many years you are practicing as a medical practicener (Doctor)?

Less than one year ----------------------------------

From one to five years -----------------------------

Five to Ten years -----------------------------------

More than Ten years -------------------------------

Can not remember ---------------------------------

2. Do you agree that India’s pharmaceutical industry is one of the fastest

growing segments of the Indian economy?

Agree --------------------------------------

Strongly Agree ---------------------------

Disagree ----------------------------------

Strongly Disagree -----------------------

Do not know/ Can not say -------------

3. Do you agree that the marketing strategy of the pharmaceutical industry

should be different from the marketing strategy in other industrial segments?

Agree ------------------------------------

Strongly Agree -------------------------

Disagree --------------------------------

Strongly Disagree --------------------

Do not know/ Can not say ----------

4. Do you agree that institutional selling is quite prevalent when it comes to

pharmaceutical market in India?

Agree ------------------------------------

Strongly Agree -------------------------

Disagree --------------------------------

Strongly Disagree ---------------------

Do not know/ Can not say ------------

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5. Do you agree that the pharmaceutical companies resort to promotional

measures for selling their products?

Agree --------------------------------------

Strongly Agree ---------------------------

Disagree ----------------------------------

Strongly Disagree -----------------------

Do not know/ Can not say -------------

6. Does the Pharmaceutical companies offer gifts to the doctors to influence

their prescriptions in favour of their company medicines?

Yes --------------------------------------------

No ---------------------------------------------

Do not know/ Can not say -----------------

7. Out of the following which one is more correct when it comes promotional

strategy of pharmaceutical companies?

They aim to inform about the product ---------------

They aim to persuade to purchase --------------------

Other motives -------------------------------------------

Do not know/ Can not say -----------------------------

8. Do you agree that unethical standards exist in the promotion of

pharmaceutical products in India?

Agree ------------------------------------

Strongly Agree -------------------------

Disagree --------------------------------

Strongly Disagree ---------------------

Do not know/ Can not say ------------

9. Your recommendation to the industry and government regarding the

promotional strategy of the pharmaceutical companies? You can choose

more than one option.

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Implement, improve and monitor legislation -----------------

Measures to improve the transparency of drug companies’ marketing activities

------------------------------------------------

Stop the practice of gifts to doctors -----------------------------

Ensure codes of conduct on drug promotion -------------------

Other measures -----------------------------------------------------

Do not know/ Can not say ----------------------------------------

10. Do you think that the entry of Multinationals is a major challenge to the

domestic players in the pharmaceutical market and are they ready to face the

challenges of the foreign players?

Yes -------------------------------------------------

No --------------------------------------------------

Do not know/ Can not say-----------------------

11. What type of marketing strategy would you prefer to expand your market

size?

B2B---------------------------------------------------------------

B2C ---------------------------------------------------------------

Both ---------------------------------------------------------------

12. What type of marketing strategy do you as more profitable?

B2B----------------------------------------------------------------

B2C ---------------------------------------------------------------

Both ---------------------------------------------------------------

13. What do you think is the major challenge from the marketing point of view

for the pharmaceutical industry in India?

Fragmentation of the market -----------------------------

Market risk due to lack of price control mechanism--

MNCs -------------------------------------------------------

Others -------------------------------------------------------

14. What innovative distribution channel do you suggest to better market your

products?

Better consumer supply chain---------------------------------

Emotional Branding --------------------------------------------

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Alliance with other corporate leaders for promotion of the product- 12 per cent

Greater media participation and power branding-----------

Others ------------------------------------------------------------

15. Are you aware that the pharmaceutical companies in India are shifting their

focus from Conventional method of marketing to non-conventional method of

marketing?

Yes -----------------------------------------------

No ------------------------------------------------

Do not know/ Can not say---------------------

16. Do you think that market ethics/ medical ehics is a major factor in the new

distribution channel of marketing?

Yes -----------------------------------------------------

No -----------------------------------------------------

Do not know/ Can not say --------------------------

17. Do you think that these non-conventional marketing methods are effective

methods of pharma marketing in the present age?

Yes ----------------------------------------------

No -----------------------------------------------

Do not know/ Can not say--------------------

18. Do you believe that technology utilization and innovative distribution

channels will help in marketing of pharma products in India?

Yes-------------------------------------

No--------------------------------------

Do not know/ Can not say----------

19. Major Weakness of the pharmaceutical industry’s marketing strategy.

Branding ------------------------------

Publicity ------------------------------

R&D ----------------------------------

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Do not know / Can not say --------

20. Do you follow branding of products as a Marketing strategy?

Yes -----------------------------------

No ------------------------------------

Do not know/ Can not say --------

21. Do you have a dealer network? Do you sell directly or through dealers?

22. Do you think that Foreign Direct Investment (FDI ) should be allowed in the

pharmaceutical sector in India?

Yes-----------------------------------------------

No------------------------------------------------

Do not know/ Cannot say---------------------

************Thank you ***********

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ANNEXURE - II

PROJECT PROPOSAL

Student Details:

Name of the Learner : HIMANSHU MOHNIA

Registration No. : 200620703

Program Name : PGDBA Specialization (Marketing Management)

TITLE OF PROJECT:

"Sales Management Strategies in the Pharmaceutical Industry"

PROBLEMS DEFINITION

Pharmaceutical sales is a challenging business. The sales force is scattered around the

country and the globe. The representatives are on the road up to 80% of the time,

meeting with doctors, pharmacists, scientists and hospitals administrators. Physicians

are demanding more from pharmaceutical companies and their sales force. Doctors

want to see sales representatives only as frequently as in necessary to obtain objective,

medical information for treating their patients. So to protect market share,

pharmaceutical companies have to rely on sales force and innovative promotional

strategies.

REASEARCH OBJECTIVES

The objectives of this research is to understand how pharmaceutical company launch

their product in the market and what promotional strategies they use to sell their

products; what is the role played by sales representatives of the company in increasing

revenues and protecting market share. It is a very challenging job because their target

is not the general public but doctors, physicians and hospitals. Through this research

we will also learn what the functions of sales representatives are and what skills they

require to perform their job efficiently.

SCOPE

The scope of this Project is to understand and describe the various stages that are

associated with drugs in pharmacy i.e. discovery, development, action, safety,

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formulation, use, quality control, packaging, storage, marketing etc. Pharmacy is one

of the foremost amongst future economy drivers. It is committed to deliver high

quality drugs and formulation at an affordable price for the general public, so that

majority of people can afford it.

Methodology

A Research Methodology defines the purpose of the research, how it proceeds, how to

measure progress and what constitute success with respect to the objectives

determined for carrying out the research study. The appropriate research design

formulated is detailed below.

Exploratory research: this kind of research has the primary objective of development

of insights into the problem. It studies the main area where the problem lies and also

tries to evaluate some appropriate courses of action. The research methodology for the

present study has been adopted to reflect these realties and help reach the logical

conclusion in an objective and scientific manner. The present study contemplated an

exploratory research

Research Design

The research design is the basic framework, which provides guidelines for the rest of

the research process. The present research can be said to be exploratory. The research

design determines the direction of the study throughout and the procedures to be

followed. It determines the data collection method, sampling method, the fieldwork

and so on.

Nature of Data

Primary Data: Primary data is basically fresh data collected directly from the

target respondents; it could be collected through Questionnaire

Surveys, Interviews, Focus Group Discussions Etc.

Secondary Data: Secondary data that is already available and published. It could

be internal and external source of data. Internal source: which

originates from the specific field or area where research is

carried out e.g. publish broachers, official reports etc.

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External Source: This originates outside the field of study like books, periodicals,

journals, newspapers and the Internet.

Data Collection

Primary data: Primary data was selected from the sample by a self-

administrated questionnaire in presence of the interviewer.

SAMPLE SIZE:

Sample size : 100

Sample area : New Delhi

Sample Unit : Officials of many pharmaceutical companies, medical

Practioneers, medical representatives in New Delhi

SECONDARY DATA: Secondary data was collected through

Articles,

Reports,

Journals,

Magazines,

Newspapers and

Internet

Sampling Technique

Random sampling technique is generally employed to extract the fruitful results. This

includes the overall design, the sampling procedure, the data collection methods, the

field methods and the analysis procedures

Sampling Procedure Actually Employed:

The process employed to select the sample was simple random sampling. Simple

random sampling refers to that sampling technique in which each and every unit of

the population has an equal and same opportunity of being on the sample. In simple

random sampling, which item gets selected is just a matter of chance.

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Statistical Techniques to be tool used:

Simple statistical tools have been used in the present study to analyze and interpret the

data collected from the field. The study has used percentiles method and the data are

presented in the form of tables and diagrams.

LIMITATION OF THE STUDY

The pharmaceutical industry is one of the major, most successful also rapidly growing

industries worldwide. It contributes significantly to the economies of many countries

all around the world, both as a major employer and as an export earner.

Marketing and sales of pharmaceutical products is very different from other products

such as say groceries, cosmetics, food items, vehicles, etc. One, pharmaceutical

products (apart from over the counter OTC drugs) can only be obtained from a

chemist on a doctor’s prescription. Thus here the customer is the doctor, who is well

versed in pharmacology. Two, medicines and drugs can only be prescribed by a

doctor only when it is deemed necessary for the patient’s recovery from illness; that

is, it is ethically wrong for a doctor to needlessly prescribe medicines. Under these

medical and ethical constraints, how does the pharmaceutical company promote its

products? This is the purpose and objective of the study.

Chapterization

1. Introduction

2. Objectives and Scope

3. Limitations

4. Theoretical Perspective

5. Methodology and Procedure of work

6. Analysis of Data

7. Findings, Inferences and Recommendations

8. Conclusion

9. Summary of the Project Report

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Annexure

I) Proposal

II) References

III) List of Figures, Charts, Diagrams

IV) List of Tables

Detailed information of Guide:

Name : MR. SUNIT MADAN

Qualification : MBA(HR), PGDBA(IR), LLB

Designation : (Business Development Manager)

Special Field or Work :

Experience : 10 Years

Any Other Important Information : Not Applicable

Company Name : Zydus Neurosciences,

Cadila Healthcare Ltd.

Address of Corporate Office :

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ANNEXURE - III

BIBLIOGRAPHY

Books

Chaudhary, P. (1998), Rx Factor: Strategic Creativity in Pharmaceutical Marketing,

New Delhi, India: Response Books.

Mittal, D.K. (1994), Drug and Pharmaceutical Industry, New Delhi, India: Anmole

Publication Pvt. Ltd.

Ramaswamy, V.S. & Meerakumari, N.S. (1996), Marketing Management: An Indian

Prospective, New Delhi, India: Macmillian India Ltd.

Sakaria George (1997), "Reform: The Inside Story," Business Today (March 7-21),

72- 76.

Smarta, R.B. (1998), "Getting friendly," Advertising and Marketing (February 1-15),

51- 54.

Smarta, R.B. (1998) "Distribution as a strategic weapon" Advertising and Marketing

(May 16-31), 30-32.

Smarta, R.B. (1998) "The bigger objectives", Advertising and Marketing (March 1-

15), 24-26.

Smarta, R.B. (1998) "Sensible Pricing", Advertising and Marketing (January 1-15),

74- 76.

_____(1988), "The Eastern Pharmacist: An Independent Organ of Pharmaceutical

Industry", Trade & Profession (April), XXXI (364), 37-56.

_____(1998), "The Next Level: Survey of Pharmaceutical Marketing", Advertising

and Marketing (August 31), 72-78.

_____(1998), "Wielding the Scalpel", The Strategist Quarterly (April-June), 16-19.

Internet website Links

www.governmentstatisticaldata.com

www.historyofpharmaceuticalindustry.com

www.otcpharmaceuticalproducts.com

www.cipla.com

www.bookrags.com/sciences/genetics/antibiotics-wrog.html

www.bookrags.com/others/health/cephalosporines-woh.html

www.indianfoline.com/phar/feat/thmo.html

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ANNEXURE - IV

LIST OF FIGURES, CHARTS, DIAGRAMSFigure No. Particular Page No Fig. 4.1: Market Share of Corporate 17

Fig. 4.2: Market Share of MNCs & Local Companies 17

Fig. 4.3: Drug requiring prescription 22

Fig. 4.4: Pharma’s Current Model 43

Fig. 4.5: Reduction in U.S. Primary care promotional spending 43

Fig. 4.6: Media consumption habits have changed 44

Fig. 4.7: Consumers are spending 45

Fig. 4.8: Physician Marketing Channels 46

Fig. 4.9: Hypothesis warrants additional research 49

Fig 6.1: Practicing as a medical practicener 64

Fig 6.2: The fastest growing segments of the Indian economy 65

Fig 6.3: Pharmaceutical segments 66

Fig 6.4: Pharmaceutical market in India 67

Fig 6.5: Innovative and better promotional measures for selling 68

Fig 6.6: Prescriptions in favour of their company medicines 69

Fig 6.7: Promotional strategy of pharmaceutical companies 70

Fig 6.8: Promotion of pharmaceutical products in India 71

Fig 6.9: The industry and government regarding 72

Fig 6.10: The Challenges of the Foreign Players 73

Fig 6.11: Market size 74

Fig 6.12: More Profitable 75

Fig 6.13: Major challenge from the Marketing 76

Fig 6.14: Suggest to better market your products 77

Fig 6.15: The pharmaceutical companies in India are shifting their focus from

conventional method of marketing 78

Fig 6.16: Distribution channel of marketing 79

Fig 6.17: Pharma Marketing in the Present Age 80

Fig 6.18: Distribution channels will help in marketing of Pharma products 81

Fig 6.19: Major weakness of the pharmaceutical industry’s 82

Fig 6.20: Products as a marketing strategy 83

Fig 6.20: Pharmaceutical sector in India 85

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ANNEXURE -V

LIST OF TABLES

Table No. Particular Page No

Table: 4.1: India’s Pharmaceutical Industry 12

Table: 4.2: India’s top 10 pharmaceutical company sales ($million) 14

Table 4.3: Doctor-directed promotion methods 27

Table 4.4: Major alliances between Indian & International companies: 38

Table 4.5: Strengths & weaknesses of India’s pharmaceutical industry 59

116