Marketing strategy of Indian pharmaceutical industry

CHAPTER - I
INDUSTRY ANALYSIS

CHAPTER 1
THE PHARMACEUTICAL INDUSTRY
1.1

INTRODUCTION

The Pharmaceutical industry develops, produces, and markets drugs or pharmaceuticals
licensed for use as medications. Pharmaceutical companies are allowed to deal in generic or
brand medications and medical devices. They are subject to a variety of laws and regulations
regarding the patenting, testing and ensuring safety and efficacy and marketing of drugs.
The earliest drugstores date to the middle Ages. The first known drugstore was opened by
Arabian pharmacists in Baghdad in 754, and many more soon began operating throughout the
medieval Islamic world and eventually medieval Europe. By the 19th century, many of the
drugstores in Europe and North America had eventually developed into larger pharmaceutical
companies.
Most of today's major pharmaceutical companies were founded in the late 19th and early 20th
centuries. Key discoveries of the 1920s and 1930s, such as insulin and penicillin, became massmanufactured and distributed. Switzerland, Germany and Italy had particularly strong
industries, with the United Kingdom, the United States, Belgium and the Netherlands following
suit.
Legislation was enacted to test and approve drugs and to require appropriate labeling.
Prescription and non-prescription drugs became legally distinguished from one another as the
pharmaceutical industry matured. The industry got underway in earnest from the 1950s, due to
the development of systematic scientific approaches, understanding of human biology
(including DNA) and sophisticated manufacturing techniques.
Numerous new drugs were developed during the 1950s and mass-produced and marketed
through the 1960s. These included the first oral contraceptive, "The Pill", Cortisone, bloodpressure drugs and other heart medications. MAO inhibitors, chlorpromazine (Thorazine),
haloperidol (Haldol) and the tranquilizers ushered in the age of psychiatric medication.
Diazepam (Valium), discovered in 1960, was marketed from 1963 and rapidly became the most
prescribed drug in history, prior to controversy over dependency and habituation.
Attempts were made to increase regulation and to limit financial links between companies and
prescribing physicians, including by the relatively new U.S. Food and Drug Administration
(FDA). Such calls increased in the 1960s after the thalidomide tragedy came to light, in which
the use of a new anti-emetic in pregnant women caused severe birth defects. In 1964, the World
Medical Association issued its Declaration of Helsinki, which set standards for clinical research
and demanded that subjects give their informed consent before enrolling in an experiment.
Pharmaceutical companies became required to prove efficacy in clinical trials before marketing
drugs.

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Cancer drugs were a feature of the 1970s. From 1978, India took over as the primary center of
pharmaceutical production without patent protection.
The industry remained relatively small scale until the 1970s when it began to expand at a
greater rate. Legislation allowing for strong patents, to cover both the process of manufacture
and the specific products, came into force in most countries. By the mid-1980s, small
biotechnology firms were struggling for survival, which led to the formation of mutually
beneficial partnerships with large pharmaceutical companies and a host of corporate buyouts
of the smaller firms. Pharmaceutical manufacturing became concentrated, with a few large
companies holding a dominant position throughout the world and with a few companies
producing medicines within each country.
The pharmaceutical industry entered the 1980s pressured by economics and a host of new
regulations, both safety and environmental, but also transformed by new DNA chemistries and
new technologies for analysis and computation. Drugs for heart disease and for AIDS were a
feature of the 1980s, involving challenges to regulatory bodies and a faster approval process.
Managed care and Health maintenance organizations (HMOs) spread during the 1980s as part
of an effort to contain rising medical costs, and the development of preventative and
maintenance medications became more important. A new business atmosphere became
institutionalized in the 1990s, characterized by mergers and takeovers, and by a dramatic
increase in the use of contract research organizations for clinical development and even for
basic R&D. The pharmaceutical industry confronted a new business climate and new
regulations, born in part from dealing with world market forces and protests by activists in
developing countries. Animal Rights activism was also a challenge.
Marketing changed dramatically in the 1990s. The Internet made possible the direct purchase
of medicines by drug consumers and of raw materials by drug producers, transforming the
nature of business. In the US, Direct-to-consumer advertising proliferated on radio and TV
because of new FDA regulations in 1997 that liberalized requirements for the presentation of
risks. The new antidepressants, the SSRIs, notably Fluoxetine (Prozac), rapidly became
bestsellers and marketed for additional disorders.
Drug development progressed from a hit-and-miss approach to rational drug discovery in both
laboratory design and natural-product surveys. Demand for nutritional supplements and socalled alternative medicines created new opportunities and increased competition in the
industry. Controversies emerged around adverse effects, notably regarding Vioxxin the US,
and marketing tactics. Pharmaceutical companies became increasingly accused of disease
mongering or over-medicalizing personal or social problems.
The Indian pharmaceutical industry currently tops the chart amongst India's science-based
industries with wide ranging capabilities in the complex field of drug manufacture and
technology. A highly organized sector, the Indian pharmaceutical industry is estimated to be
worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high amongst all the
third world countries, in terms of technology, quality and the vast range of medicines that are
manufactured. It ranges from simple headache pills to sophisticated antibiotics and complex
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cardiac compounds, almost every type of medicine is now made in the Indian pharmaceutical
industry.
Research and Development
Drug discovery is the process by which potential drugs are discovered or designed. In the past
most drugs have been discovered either by isolating the active ingredient from traditional
remedies or by serendipitous discovery. Modern biotechnology often focuses on understanding
the metabolic pathways related to a disease state or pathogen, and manipulating these pathways
using molecular biology or biochemistry. A great deal of early-stage drug discovery has
traditionally been carried out by universities and research institutions.
Drug development refers to activities undertaken after a compound is identified as a potential
drug in order to establish its suitability as a medication. Objectives of drug development are to
determine appropriate formulation and dosing, as well as to establish safety. Research in these
areas generally includes a combination of in vitro studies, in vivo studies, and clinical trials.
The amount of capital required for late stage development has made it a historical strength of
the larger pharmaceutical companies.
Often, large multinational corporations exhibit vertical integration, participating in a broad
range of drug discovery and development, manufacturing and quality control, marketing, sales,
and distribution. Smaller organizations, on the other hand, often focus on a specific aspect such
as discovering drug candidates or developing formulations. Often, collaborative agreements
between research organizations and large pharmaceutical companies are formed to explore the
potential of new drug substances. More recently, multi-nationals are increasingly relying on
contract research organizations to manage drug development.
The cost of innovation
Drug companies are like other companies in that they manufacture products that must be sold
for a profit in order for the company to survive and grow. They are different from some
companies because the drug business is very risky. For instance, only one out of every ten
thousand discovered compounds actually becomes an approved drug for sale. Much expense is
incurred in the early phases of development of compounds that will not become approved
drugs. In addition, it takes about 7 to 10 years and only 3 out of every 20 approved drugs bring
in sufficient revenue to cover their developmental costs, and only 1 out of every 3 approved
drugs generates enough money to cover the development costs of previous failures. This means
that for a drug company to survive, it needs to discover a blockbuster (billion-dollar drug) every
few years.
Drug discovery and development is very expensive; of all compounds investigated for use in
humans only a small fraction are eventually approved in most nations by government appointed
medical institutions or boards, who have to approve new drugs before they can be marketed in
those countries. In 2010 18 NMEs (New Molecular Entities) were approved and three biologics
by the FDA, or 21 in total, which is down from 26 in 2009 and 24 in 2008. On the other hand,
there were only 18 approvals in total in 2007 and 22 back in 2006. Since 2001, the Center for
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Drug Evaluation and Research has averaged 22.9 approvals a year. This approval comes only
after heavy investment in pre-clinical development and clinical trials, as well as a commitment
to ongoing safety monitoring. Drugs which fail part-way through this process often incur large
costs, while generating no revenue in return. If the cost of these failed drugs is taken into
account, the cost of developing a successful new drug (New chemical entity or NCE), has been
estimated at about 1.3 billion USD(not including marketing expenses). Professors Light and
Lexchin reported in 2012, however, that the rate of approval for new drugs has been a relatively
stable average rate of 15 to 25 for decades.
Industry-wide research and investment reached a record $65.3 billion in 2009. While the cost
of research in the U.S. was about $34.2 billion between 1995 and 2010, revenues rose faster
(revenues rose by $200.4 billion in that time).
A study by the consulting firm Bain & Company reported that the cost for discovering,
developing and launching (which factored in marketing and other business expenses) a new
drug (along with the prospective drugs that fail) rose over a five-year period to nearly $1.7
billion in 2003.According to Forbes, development costs between $4 billion to $11 billion per
drug.
These estimates also take into account the opportunity cost of investing capital many years
before revenues are realized (see Time-value of money). Because of the very long time needed
for discovery, development, and approval of pharmaceuticals, these costs can accumulate to
nearly half the total expense. Some approved drugs, such as those based on re-formulation of
an existing active ingredient (also referred to as Line-extensions) are much less expensive to
develop.
Calculations and claims in this area are controversial because of the implications for regulation
and subsidization of the industry through tax credits and federally funded research grants.
“Me – too” drugs
Competition between pharmaceutical companies has resulted in "me-too" drugs, which are
defined as chemically-similar compounds or compounds with the same mechanism of action
as an existing, approved chemical entity. Much of the “me-too” drug phenomenon is actually
a result of independent parallel research at rival companies. It may take 10 or more years for a
drug to go from discovery to FDA approval, and if a new clinical pathway is discovered,
multiple companies often will simultaneously develop a drug treatment within this pathway,
leading to several similar drugs arriving on the market within a short period of time.
Critics of the pharmaceutical industry suggest that "me-too" drugs are only brought to market
because their development is cheaper and less risky than drugs with a novel mechanism of
action. However, proponents point to the cost benefits of market competition between similar
drugs. When a second drug arrives on the market, the manufacturer of the first drug no longer
has a monopoly, and the resulting competition puts a downward pressure on pricing. To be
approved by the FDA, second and third entrants also need to offer advantages over the existing
therapy, such as fewer side effects or more convenient dose schedules.
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Controversies
Due to repeated accusations and findings that some clinical trials conducted or funded by
pharmaceutical companies may report only positive results for the preferred medication, the
industry has been looked at much more closely by independent groups and government
agencies.
In response to specific cases in which unfavorable data from pharmaceutical companysponsored research was not published, the Pharmaceutical Research and Manufacturers of
America have published new guidelines urging companies to report all findings and limit the
financial involvement in drug companies of researchers. US congress signed into law a bill
which requires phase II and phase III clinical trials to be registered by the sponsor on the
clinicaltrials.gov website run by the NIH.
Drug researchers not directly employed by pharmaceutical companies often look to companies
for grants, and companies often look to researchers for studies that will make their products
look favorable. Sponsored researchers are rewarded by drug companies, for example with
support for their conference/symposium costs. Lecture scripts and even journal articles
presented by academic researchers may actually be 'ghost-written' by pharmaceutical
companies.
Researchers who have tried to reveal ethical issues with clinical trials, or publish papers
showing harmful effects of drugs – and who saw themselves as whistleblowers – have faced or
been threatened with lawsuits from drug companies, or have lost their jobs. For example, Dutch
medical researcher Dr. Koos Stiekema was sued by the pharmaceutical company Organon for
violating his confidentiality agreement, after he discussed his concerns about a clinical trial
design with three ethics committees in 1999. Organon's other experts agreed that the trial design
was safe, and a court in Amsterdam awarded Organon ₤550,000 for the trial-delay costs that
resulted from Stiekema's disclosures. The award was overturned on appeal; the court ruled that
Stiekema's breach of confidentiality was "justified by a higher interest." In the United States,
corporate whistleblowers are given a percentage of any fines levied.
Since 2008, pharmaceutical companies have been increasing the cost of name-brand
prescriptions to offset declining revenues as out-of-patent drugs become available as generics.
Simultaneously, pharmaceutical manufacturers are taking increasing advantage of tax havens
to avoid taxation.
An investigation by ProPublica found that at least 21 doctors have been paid more than
$500,000 for speeches and consulting by drugs manufacturers since 2009, with half of the top
earners working in psychiatry, and about $2 billion in total paid to doctors for such services.
AstraZeneca, Johnson & Johnson and Eli Lilly have paid billions of dollars in federal
settlements over allegations that they paid doctors to promote drugs for unapproved uses. Some
prominent medical schools have since tightened rules on faculty acceptance of such payments
by drug companies.

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Product Approval
In the United States, new pharmaceutical products must be approved by the Food and Drug
Administration (FDA) as being both safe and effective. This process generally involves
submission of an Investigational New Drug filing with sufficient pre-clinical data to support
proceeding with human trials. Following IND approval, three phases of progressively larger
human clinical trials may be conducted. Phase I generally studies toxicity using healthy
volunteers. Phase II can include Pharmacokinetics and Dosing in patients, and Phase III is a
very large study of efficacy in the intended patient population. Following the successful
completion of phase III testing, a New Drug Application is submitted to the FDA. The FDA
review the data and if the product is seen as having a positive benefit-risk assessment, approval
to market the product in the US is granted.[33]
A fourth phase of post-approval surveillance is also often required due to the fact that even the
largest clinical trials cannot effectively predict the prevalence of rare side-effects. Post
marketing surveillance ensures that after marketing the safety of a drug is monitored closely.
In certain instances, its indication may need to be limited to particular patient groups, and in
others the substance is withdrawn from the market completely. Questions continue to be raised
regarding the standard of both the initial approval process, and subsequent changes to product
labeling (it may take many months for a change identified in post-approval surveillance to be
reflected in product labeling) and this is an area where congress is active.
The FDA provides information about approved drugs at the Orange Book site.
In many non-US western countries a 'fourth hurdle' of cost effectiveness analysis has developed
before new technologies can be provided. This focuses on the efficiency (in terms of the cost
per QALY) of the technologies in question rather than their efficacy. In England NICE
approval requires technologies be made available by the NHS, whilst similar arrangements
exist with the Scottish Medicines Consortium in Scotland and the Pharmaceutical Benefits
Advisory Committee in Australia. A product must pass the threshold for cost-effectiveness if
it is to be approved. Treatments must represent 'value for money' and a net benefit to society.
There is much speculation that a NICE style framework may be implemented in the USA in an
attempt to decrease Medicare and Medicaid spending by balancing benefits to patients versus
profits for the medical industry.
In the UK, the British National Formulary is the core guide for pharmacists and clinicians.
Orphan drugs
There are special rules for certain rare diseases ("orphan diseases") involving fewer than
200,000 patients in the United States, or larger populations in certain circumstances. Because
medical research and development of drugs to treat such diseases is financially
disadvantageous, companies that do so are rewarded with tax reductions, fee waivers, and
market exclusivity on that drug for a limited time (seven years), regardless of whether the drug
is protected by patents.

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Legal issues
Where pharmaceutics have been shown to cause side-effects, civil action has occurred,
especially in countries where tort payouts are likely to be large. The top 20 pharmaceutical
cases account for over $16 billion in recoveries. Due to high-profile cases leading to large
compensations, most pharmaceutical companies endorse tort reform. Recent controversies
have involved Vioxxin and SSRI antidepressants.
Industry Revenue
For the first time ever, in 2011, global spending on prescription drugs topped $954 billion, even
as growth slowed somewhat in Europe and North America. The United States accounts for
more than a third of the global pharmaceutical market, with $340 billion in annual sales
followed by the EU and Japan. Emerging markets such as China, Russia, South Korea and
Mexico outpaced that market, growing a huge 81 percent. According to IMS the global
pharmaceutical industry can reach to US$1.1 trillion by 2014.
Pfizer's cholesterol pill Lipitor remains a best-selling drug worldwide. Its annual sales were
$12.9 billion, more than twice as much as its closest competitors: Plavix, the blood thinner
from Bristol-Myers Squibb and Sanofi-Aventis; Nexium, the heartburn pill from AstraZeneca;
and Advair, the asthma inhaler from GlaxoSmithKline.
IMS Health publishes an analysis of trends expected in the pharmaceutical industry in 2013,
including increasing profits in most sectors despite loss of some patents, and new 'blockbuster'
drugs on the horizon.

1.2 Pharmaceutical Industry in India
The Indian pharmaceutical sector is highly fragmented with more than 20,000 registered units.
It has expanded drastically in the last two decades. The Pharmaceutical and Chemical industry
in India is an extremely fragmented market with severe price competition and government price
control. The Pharmaceutical industry in India meets around 70% of the country's demand for
bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules,
orals, and injectables. There are approximately 250 large units and about 8000 Small Scale
Units, which form the core of the pharmaceutical industry in India (including 5 Central Public
Sector Units).
Indian pharmaceutical industry is expected to grow at 20% in 2014. India is now among the
top five pharmaceutical emerging markets. There will be new drug launches, new drug filings,
and Phase II clinic trials throughout the year. On back of increasing sales of generic medicines,
continued growth in chronic therapies and a greater penetration in rural markets, the domestic
pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in
2013.
Moreover, the increasing population of the higher-income group in the country will open a
potential US$ 8 billion market for multinational companies selling costly drugs by 2015.

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Besides, the domestic pharma market is estimated to touch US$ 20 billion by 2015, making
India a lucrative destination for clinical trials for global giants.
Further estimates the healthcare market in India to reach US$ 31.59 billion by 2020.
According to the estimates, the Indian diagnostics and labs test services, in view of its growth
potential, is expected to reach Rs159.89 billion by 2013. The Indian market for both therapeutic
and diagnostic antibodies is expected to grow exponentially in the coming years. Findings from
the report suggest that more than 60% of the total antibodies market is currently dominated by
diagnostic antibodies.
Some of the major Indian pharmaceutical firms, including Sun Pharma, Cadila Healthcare and
Piramal Life Sciences, had applied for conducting clinical trials on at least 12 new drugs in
2010, indicating a growing interest in new drug discovery research.
Generics
Generics will continue to dominate the market while patent-protected products are likely to
constitute 10 per cent of the pie till 2015, according to McKinsey report 'India Pharma 2015 Unlocking the potential of Indian Pharmaceuticals market'.
Indian Pharmaceutical Sector Analysis
India is already among the top six producers of pharmaceuticals of the world. The Government
of India has announced a host of measures to create a facilitating environment for the Indian
pharmaceutical industry. The policies of the Government of India are aimed at building more
hospitals, boosting local access to healthcare, improving the quality of medical training,
increasing public expenditure on healthcare to 2-3 per cent of GDP, up from the current level
of 1 per cent. At the same time, the growth in healthcare insurance industry in India is also
expected to complement the overall growth in the pharmaceutical market.
The healthcare insurance industry in India is expected to grow at a CAGR of 15 per cent till
2015. Investments in R&D in India have grown from US$ 52.5 million in 2000 to US$ 646.5
million in 2010. Of this, nearly 80 per cent or US$ 505 million is accounted for by the domestic
companies while 20 per cent or US$ 141.5 million comes from foreign companies. The
Government of India has made tax breaks available to the pharmaceutical sector and a weighted
tax deduction of 150 per cent for any R&D expenditure incurred. This is in league with Indian
Government's Pharma Vision 2020 which aims at making India a global leader in end-to-end
manufacture by 2020.
India is home to 10,500 manufacturing units and over 3,000 pharma companies. India exports
all forms of pharmaceuticals from APIs to formulations, both in modern medicine and
traditional Indian medicines. Globally India ranks among the top exporters of formulations by
volumes. India's generics exports have been growing at a rate of nearly 24 per cent annually
over the last four years. India's pharma exports stood at US$ 14.7 billion in 2012-13, registering
a growth rate of 11 per cent. India plans to increase its total exports to US$ 25 billion by 2016.

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As per ‘Pharma vision 2020’, the government of India aims to make India a global leader in
end-to-end drug manufacturing.
Manufacturing costs in India are approximately 35-40 percent of those in the US due to low
installation and manufacturing costs.
Pharmaceutical exports have grown at a CAGR of 68 per cent over the last decade.
Healthcare expenditure by the government of India is expected to touch US$ 86.9 billion by
2014.
The projected human resource requirement in the Indian pharma sector is estimated to be about
21, 50,000 by 2020.
Pharma Manufacturing & Patents
India is home to 10,500 manufacturing units and over 3,000 pharma companies.
India accounts for 35.7 per cent (3,000) of 8,374 Drug Master Files (DMFs) filed with the
USA, which is the highest outside of USA.
Higher spending on R&D, owing to Products Patents have made India a major destination for
generic drug manufacturing.
India has been accredited with approximately 907 CEPs, 845 TGA and 513 sites registered
with the USFDA.
Following the introduction of product patents, several multinational companies are expected to
launch patented drugs in India.
Health Insurance
Penetration of health insurance is expected to more than double with over 650 million people
to be covered by 2020.
Increasing penetration of health insurance is likely to be driven by government-sponsored
initiatives such as RSBY and ESIC.
Future Growth Prospects:
The Indian pharma industry is on a good growth path and is likely to be in the top 10 global
markets in value terms by 2020, according to the PwC-CII report titled “India Pharma Inc:
Gearing up for the next level of growth”. High burden of disease, good economic growth
leading to higher disposable incomes, improvements in healthcare infrastructure and improved
healthcare financing are driving growth in the domestic market, the report highlighted.
The small and medium enterprises (SMEs) are expected to play a significant role in the growth
story of the country's pharma sector as they contribute 35–40 per cent to the industry in terms
of production with a turnover of about Rs 35,000 crore (US$ 5.70 billion).

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With the support of Pharmexcil and the Government in the form of Brand India Pharma project
iPHEX, the sector would continue to grow and meet the healthcare requirements of the
developing world. The country will also see the largest number of merger and acquisitions
(M&A) in the pharmaceutical and healthcare sector, according to consulting firm Grant
Thornton.
Exchange rate used INR 1= US$ 0.01630 as on 11 December 2013
Household Spend & growth in Rural India
Due to increasing population and income levels, demand for high-end drugs is expected to
reach US$ 8 billion by 2015.
Expenditure on pharmaceuticals is likely to increase to over 40 per cent of the total spending
on healthcare by households by 2015 from 28 per cent in 2007.
With 70 per cent of India’s population residing in rural markets, various pharma companies are
investing in the distribution network in rural areas.
Increased penetration of chemists, especially in the rural parts of the country would make OTC
drugs easily available.

1.3 CHALLENGES& FUTURE GROWTH
Over the past decade, pharmaceutical companies have entered a difficult period where
shareholders, the market, and regulators have created significant pressures for change within
the industry. The core issues for most of drug companies are declining productivity of in-house
R & D, patent expiration of number of block buster drugs, increasing legal and regulatory
concern, and pricing issue. As a result larger pharmaceutical companies are shifting to new
business model with greater outsourcing of discovery services, clinical research and
manufacturing.
Current global financial conditions and the threat of a broad recession accelerated the timetable
for implementing transformational changes in global organizations, as the industry confronts
lower corporate stock prices and an increasingly cost-averse customer. Leaders of the largest
global pharmaceutical companies recognize the need for transformational change in their
organizations, but will need to move swiftly to ensure sustained growth.
Transformations in the business model of larger pharmaceutical industry spell more
opportunities for Indian pharmaceutical companies. Pharmaceutical production costs are
almost 50 percent lower in India than in western nations, while overall R&D costs are about
one-eighth and clinical trial expenses around one-tenth of western levels.
The Indian stock market may be dreading a possible recession but Indian pharma companies
seem unfazed by slowdown fears. Riding on better sales in the domestic and export markets,
Indian pharmaceutical industry is expected to continue with its good performance. Today
Indian pharmaceutical Industry can look forward to the years to come, with great expectations.
There are opportunities in expanding the range of generic products as more molecule come off
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patent, outsourcing, and above all, in focusing into drug discovery as more profits come from
traditional plays. At the same time, the Indian pharma industry would have to contend with
several challenges, particularly the following


Effects of new product patent



Drug price control



Regulatory reforms



Infrastructure development



Quality management and



Conformance to global standards.

Advantage India
The Indian Pharmaceutical Industry, particularly, has been the front runner in a wide range of
specialties involving complex drugs' manufacture, development, and technology. With the
advantage of being a highly organized sector, the pharmaceutical companies in India are
growing at the rate of $ 4.5 billion, registering further growth of 8 - 9 % annually.
More than 20,000 registered units are fragmented across the country and reports say that 250
leading Indian pharmaceutical companies control 70% of the market share with stark price
competition and government price regulations.
Competent workforce: India has a pool of personnel with high managerial and technical
competence as also skilled workforce. It has an educated work force and English is commonly
used. Professional services are easily available.
Cost-effective chemical synthesis: Its track record of development, particularly in the area of
improved cost-beneficial chemical synthesis for various drug molecules is excellent. It
provides a wide variety of bulk drugs and exports sophisticated bulk drugs.
Legal & Financial Framework: India has a solid legal framework and strong financial
markets. There is already an established international industry and business community.
Information & Technology: It has a good network of world-class educational institutions and
established strengths in Information Technology.
Globalization: The country is committed to a free market economy and globalization. Above
all, it has a 70 million middle class market, which is continuously growing.
Consolidation: For the first time in many years, the international pharmaceutical industry is
finding great opportunities in India. The process of consolidation, which has become a
generalized phenomenon in the world pharmaceutical industry, has started taking place in
India.

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1.4 GOVERNMENT INITIATIVES AND INVESTMENT
Government Initiative
The Union Finance Minister highlighted few points in union budget 2012-13:





It is proposed to extend concessional basic customs duty of 5 per cent with full
exemption from excise duty/CVD to six specified life-saving drugs/ vaccines. These
are used for the treatment or prevention of ailments such as HIV-AIDS, renal cancer,
etc.
Probiotics are a cost-effective means of combating bacterial infections. It is proposed
to reduce the basic customs duty on this item from 10 per cent to 5 per cent
Basic customs duty and excise duty reduced on soya products to address protein
deficiency among women and children. Basic customs duty and excise duty reduced on
Iodine.

Marking a new trend of investments from foreign players in the Indian pharma sector, the need
for overseas investors to get a no-objection from their JV partner before venturing out on their
own or roping in another local firm has been removed by the Pharmaceuticals Export
Promotion Council (Pharmexcil). It is expected that this measure will promote the
competitiveness of India as an investment destination and be instrumental in attracting higher
levels of FDI and technology inflows into the country.
The Department of Pharmaceuticals has prepared a 'Pharma Vision 2020' document for making
India one of the leading destinations for end-to-end drug discovery and innovation and for that
purpose, the department provides requisite support by way of world class infrastructure,
internationally competitive scientific manpower for pharma research and development (R&D),
venture fund for research in the public and private domain and such other measures.

Investment
 Israel-based Teva Pharmaceuticals in collaboration with Procter & Gamble (P&G)
plans to set up world's largest over-the-counter (OTC) medicine facility at Sanand,
Gujarat
 GlaxoSmithKline (GSK) and the Hyderabad-based Biological E Ltd have teamed up
for early stage research and development (R&D) of a six-in-one combination pediatric
vaccine against polio and other infectious diseases
 Claris Life sciences Ltd has entered into joint venture (JV) agreement with two Japanbased drug makers Otsuka Pharmaceutical and Mitsui & Co Ltd for its injectable
business in India and other emerging markets
 Nipro Corporation has set up India's first dialyser manufacturing facility at Shirwal near
Pune, with an investment of Rs 700 crore (US$ 130.60 million)
 Aurobindo Pharma Ltd has received approval from the US Food and Drug
Administration (USFDA) to manufacture and market various medicines namely
Oxacillin injections and Rizatriptan Benzoate tablets in the US, besides Nafcillin and
Ondansetron injection
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 Eli Lilly and Strides Arcolab have inked a pact to increase delivery of cancer medicines
in emerging markets. Agila Specialties, the specialties division of Strides Arcolab, will
make cancer medicines and Eli Lilly will market them in emerging geographies

1.5 TOP 10 WORLD’S LARGEST PHARMACEUTICAL COMPANIES:
The world “Pharmaceutical” comes from Greek word “Pharmakeia” with the modern translation as
“Pharmacia”. We all are aware of many existing pharmaceutical companies as we have used many of
their medicines during our sickness phases. Many people owe their lives to many lifesaving medicines
without which they might not have seen another day in their life. Pharmaceutical companies are
responsible for discovering new drugs, marketing them and getting them licensed for their use as
medications. All drugs so produced have to go through a strict process of patenting and testing and are
subjected to all sorts of safety checks and a variety of laws and regulations. These pharmaceutical
companies not only play a very important role in the medicine industry but also play a significant role
in the revenue industry and the development of a nation. It employs thousands of people per plant and
thus helps in the GDP of a country. The Indian pharmaceutical industry stands at the third position in
terms of volume and 14th in terms of value. Though United States is still the largest pharmaceutical
market in the world. According to a report by IMS Health the global market size of pharmaceuticals is
expected to reach nearly $1.1 trillion in 2014. Though the world might face recession but the
pharmaceutical industry is more likely to shine through it and grow more rapidly.

Pharmaceutical industry is growing fast and many industries are emerging more prominently
among others with their peaking sales and healthcare revenues. Here is the list of top 10 world’s
largest pharmaceutical companies.

10. Lilly

Eli Lilly and Company is an American global pharmaceutical company. It has its headquarters in
Indianapolis, Indiana in the United States. It was founded by Eli Lilly in 1876 and John C. Lechleiter
is the present chairman, president and CEO of the company. The world owes Lilly for the first massproduction of Penicillin, Salk Polio vaccine and insulin and is the largest producer and distributor of
psychiatric medications in the world. Other drugs produced by Lilly are namely Arzoxifine, Efient,
Olanzapine, etc.

14

9. Abbott Laboratories

Abbott Laboratories is a US based global pharmaceuticals and health care products company employing
about 90,000 employees. Its headquarters is located in Abbott Park, North Chicago, Illinois. It was
founded by Dr. Wallace Calvin Abbottin 1888 and was then known as Abbott Alkaloidal Company. It
produces many pharmaceutical products, medicinal devices,nutritional and animal healthcare products.
Miles D. White is the chairman and CEO of the company. Its leading drug is a blocker drug called
Humira.

8. Johnson & Johnson

Johnson & Johnson is a US based multinational company which manufactures medicinal devices,
pharmaceuticals and consumer packaged goods. It was founded in 1886 by Robert wood Johnson I,
James Wood Johnson and Edward Mead Johnson. The Company’s headquarters is located in New
Brunswick, New Jersey. Johnson & Johnson is a leading name in many household items like Johnson
& Johnson baby products, Neutrogena skin and beauty products, Band-Aid, Clean and clear facewashes,
etc. Risperdal, the anti-psychotic medication was the highest seller drug at $4.7 billion. It has gross
sales of $24.9 billion and net income of $10.6 billion. The other drugs manufactured by it are
Bapineuzumab, ceftobiprole, dacogen, procrit, rivaroxaban, topamax, etc.

15

7. AstraZeneca

AstraZeneca plc founded on 6th April 1999, through the merger of the Sweden-based Astra AB and the
UK-based Zeneca Group, is a Swedish-British multinational pharmaceutical and biologics company. It
specializes in Prescriptive medicines including Carbocaine, Naropin, Betaloc, Zestril, lexinor, Cubicin,
Zomig, Tomudex, and a variety of other medicines in the areas of oncology, neuroscience,
gastrointestinal, etc. The acid reflux medication called Nexium is its leading product at $5.2 billion. It
has the gross sales of $28.7 billion and net income of $8 billion. It is also the manufacturer of drugs for
cholesterol treatment called Crestor and antipsychotic drug called Seroquel.

6. Roche

Hoffmann-La Roche is a Swiss global healthcare company founded by Fritz Hoffmann-La Roche after
whom the company is named, in 1896. Its main headquarters is located in Basel, Switzerland. The other
companies owned by Roche are Genentech, Chugai pharmaceuticals and Ventana. It was the first
company to produce synthetic vitamin C at a large scale under the brand name of Redoxon. Its leading
drug is Herceptin a medication for breast cancer at $2.8 billion. It has gross sales of $22 billion with net
profit of $9.5 billion. The various drugs produced by Roche include Accutane, Bactrium, cellcept,
herceptin, invirase, tamiflu, Rohypnol, etc. It also manufactures a range of Diabetes management
products under the brand name Accu-check.

16

5. GlaxoSmithKline

GlaxoSmithKline plc is a multinational company based in the United Kingdom dealing in the fields of
pharmaceutical, biologics, vaccines and consumer healthcare. GSK was formed by the merger of Glaxo
Wellcome plc and SmithKline Beecham plc in the year 2000. It manufactures products for various
diseases including mental health, diabetes, asthma, cancer, virus control, etc. GSK also manufactures
nutritional products, drinks and other healthcare goods like Horlicks, sensodyne, Boost, etc. Its top
selling drug at $7 billion is Advair used for asthema and chronic obstructive pulmonary disorder
treatment. It has maintained its leading status with its pharmaceutical sales of $38.5 billion and net
income of $10.6 billion.

4. Merck

Merck & Co., Inc. is an American pharmaceutical company with its headquarters located in Whitehouse
Station, New Jersey. Kenneth Frazier is the chairman, president and CEO of the company and it was
founded in 1891 as a subsidiary of Merck KGaA. It came out as an independent company in 1917 after
being confiscated by US Government during World War I. Merck is also the publisher of world’s largest
selling medical textbook called the Merck Manual of diagnosis and therapy and a series of other medical
reference books. The various drugs manufactured by it are Vioxx, Mectizan, Cordaptive, isentress, etc.
The company is been sued for its drug called Propecia whose side effects include persistent sexual
dysfunction, loss of libido, Peyronie’s disease, etc. of which the patients were not forewarned.

17

3. Sanofi-Aventis

Sanofi-Aventis, a French multinational pharmaceutical company has its headquarters in Paris, France.
It is involved in research and development and manufactures pharmaceutical products to be sold
primarily in the prescription market. Over-the-counter medicines are also developed by the company.
Its leading drug at $3.6 billion is the thrombosis medication Lovenox. Sanofi-Aventis has gross sales
of $38.5 billion and a net income of $9.7 billion. The various drugs manufactured by the company are
aflibercept, jevtana, Humenza vaccine, iniparib, otamixaban, etc. in the various areas of oncology,
cardiology and virology. Sanofi-Aventis was formed in 2004 by the merger of Aventis and SanofiSynthélabo and later in 2011 changed the name to Sanofi. Its various companies in other sectors include
Sanofi Pasteur in Vaccine business and Merial in animal healthcare.

2. Novartis

18

Novartis International AG, a multinational pharmaceutical company is based in Basel, Switzerland.
Novartis has been on the face of the pharmaceutical industry for about 250 years owing to its formation
by merger of Swiss companies Ciba-Geigy and Sandoz Laboratories in 1996. Novartis produces a range
of products including vaccines, contact lenses, over-the- counter drugs, veterinary medicines, etc.
Novartis is a manufacturer of drugs including clozapine, diclofenac, carbamazepine, valsartan (Diovan)
and Glivec. Diovan is the highest selling medication by the company used for hypertension medication
at $ 5 billion and had pharmaceutical sales of $25.5 billion and a net income of $12 billion. Novartis is
involved in various controversies, the biggest of them being the alleged launching of a court case against
India in 2006 seeking the prohibition of development of generic medicines based on patented medicines.
Novartis claimed that the company needed a new patent to protect its investment on the anti-cancer
medicine called Glivec which was refused by IPAB. It has been found that the generic medicines cost
only Rs. 8500 as opposed to Glivec that costs the cancer patients about Rs. 130,000 per month. Also it
committed sexual discrimination against 12 female sales representatives which was criticized
worldwide.

1. Pfizer

Pfizer is the world’s largest research-based pharmaceutical industry based in the United States of
America. Its research headquarters is located in Groton, Connecticut. Pfizer has developed many
medicines and vaccines like Sutent, Zithromax, apixaban, Macugen, Lyrica, latreperdine, etc. in the
areas of oncology, infections and infestations, cardiology, opthamalogy, neurology and psychiatry. The
Pfizer Company’s top selling drug is the cholesterol drug namely Lipitor at $12.7 billion. Pfizer has
$44.4 billion in pharmaceutical sales and has gained a net profit of $8 billion. The company was founded
in 1849 in New York City by cousins Charles Pfizer and Charles Erhart. The discovery of Terramycin
in 1950 paved the pathway of the company’s growth from a small-scale chemical company to becoming
the world’s largest pharmaceutical industry. Pfizer also was involved in quite many controversies
including lawsuits that were filed against it for illegal marketing of the arthritis drug Bextra,
experimenting a new drug during a cholera outbreak in Nigeria on children which led to the death of
about 50 children and one of its acquired companies called Quigley which sold asbestos-containing
insulation products for years; a settlement deal is being negotiated till date between the asbestos victims
and Pfizer.

19

1.6 PORTER’S FIVE FORCES ANALYSIS

1. THREAT OF NEW ENTRANT: The industry has high entry barrier for new entrants.
The major barriers to entry are:
i.
The presence of economies of scale in manufacturing, R&D, marketing, sales
etc. & capital requirement & financial requirements. The existing companies
have advantage in terms of costs involved in launching new drugs &
formulations. The new companies would find it difficult to achieve this.
ii.
Differentiation of products from the existing products in the market & creating
brand awareness in the minds of doctors & pharmacists. New entrants will face
difficulties in gaining trust of doctors/patients & they also need time to develop
efficient distribution channels & preferred arrangements with doctors/
pharmacists.
iii. Regulatory policies including patents, regulatory standards. The Indian Patent
Act, 1970 recognized process but not product patents. The introduction of
TRIPS part of WTO agreement has led to huge barriers for potential entrants.
iv.
The capital requirement for the industry is very low; creating a regional
distribution network is easy, since the point of sales is restricted in this industry
in India.
2. BARGAINING POWER OF BUYERS: the buyer does not have much power over
the manufacturers because of the presence of influencing element i.e. the doctors. Due
to the extremely fragmented nature of industry & government policies like DPCO
(Drug Price Order Control), 1970 under which the power to control prices is with the
NPPA (National Pharmaceutical Pricing Authority) the low power of buyers does not
have much effect on the manufacturers. Except in generic & OTC medicines, the buyer
does not normally switch medicines.
3. BARGAINING POWER OF SUPPLIERS: the main suppliers are the organic
chemical industry & labor forces. The fragmented nature of the organic chemicals
industry prevents it from having much bargaining power over the manufacturers as the
switching cost is low for the manufacturers.

4. THREAT OF SUBSTITUTES: the main substitutes to the synthetic pharmaceutical
industry are mainly the emerging biotechnology chemical industry. Also in developing
countries like India, the traditional medicines also play a major substituting role.
5. INTENSITY OF RIVALRY: the Indian Pharmaceutical industry is highly fragmented
with around 250-300 manufacturing & formulation units in the organized sector which
contribute to only 70% of the market share of the total sales in the country. The
concentration ratio (proportion of total industry output by the largest firm in the
20

industry) for the industry is very low. Also government subsidies have led to the
proliferation of many small players. Since the product patents were not valid in the
country till 2005, the differentiation in the product is very low. The key driver in this
industry is the cost-competitiveness. After 2005, major MNCs like Pfizer & GSK
started introducing newer products in the market thereby increasing competition in the
industry.

21

CHAPTER -II
COMPANY ANALYSIS

22

COMPANY ANALYSIS

2.1 ABOUT THE COMPANY
Dr. Reddy’s laboratories was founded by Dr. Anji Reddy, entrepreneur-scientist, in 1984 the
DNA of the company; is drawn from its founder and his vision to establish India’s first
discovery led global pharmaceutical company in fact, it is this spirit of entrepreneurship that
has shaped the company to become what it is today. The company is focused on creating and
delivering innovative and quality products to help people lead healthier lives.
Dr. Reddy’s is the research-based company with vertically integrated operations. The company
develops, manufactures and markets a wide range of pharmaceutical products India and
overseas. Dr. Reddy’s produces finished dosage forms, active pharmaceutical ingredients,
diagnostic, kits, critical care and biotechnology products. The basic research program of Dr.
Reddy’s focused on cancer diabetes, bacterial infections and pain.
Dr. Reddy’s generic formulations have also become very popular in quality-conscious
regulated markets such as the US and Europe. All this has been possible because of our
innovative and sustained marketing efforts. We are all set to spread pure wings further and
touch more lives across the globe.
Dr. Reddy’s Laboratories is an emerging global pharmaceutical and biotechnology company,
which was founded by Chairman Dr. Anji Reddy in 1984. It operates in over 60 countries,
although India and the USA each accounts for around a third of the firm's total sales. The
company is already strongly present in most of the world's biggest less-regulated markets, such
as Russia, China, Brazil and South Africa.
Dr. Reddy's made history in February when it entered the German branded generics market,
the world's second-largest after the USA, not through building a business organically there but
with the purchase of Betapharm, Germany's fourth-largest generics manufacturer, for$570
million. This is the largest overseas acquisition by an Indian pharmaceutical company so far.
It is now looking towards expansion in Spain, France and the rest of Europe, and also to rolling
out its existing product range in major regulated markets including Australia and New Zealand.
Dr. Reddy's Laboratories is one of the popular pharmaceutical companies with base in more
than 100 countries. The medicines of Dr. Reddy's Laboratories Limited are easily available all
across the globe.
Dr. Reddy's Pharmaceutical Company is very much customer friendly. It takes care of the fact
that maximum people get benefited by the products of this pharmaceutical company. It
commercialized various treatments so as to provide high tech treatment to the masses. It tries
to meet the medical needs of the people.
Though Dr. Reddy's Laboratories is located in various parts of the world, it has its headquarters
in India. The subsidiaries of this company are found at various countries like US, Germany,
23

UK, Russia, and Brazil. 16 countries have the representative offices of Dr. Reddy's
Laboratories Limited. 21 countries have third party distribution.
Dr Reddy's Laboratories Ltd has launched Finasteride tablets, a bio-equivalent generic version
of Propecia (Finasteride) tablets, in the US market. The tablets are used for treating male pattern
hair loss.

LIFE:
Life in not living, but living in health.
RESEARCH:
Research is to see what everybody else has seen and to think what nobody else has thought.
HOPE:
Hope sees the invisible, touches the intangible, and achieves the impossible.
PURPOSE:
Providing affordable and innovative medicines for healthier lives.
VALUES:Our business practices are guided by highest ethical standards of truth integrity and
transparency. To strive for excellence in everything they think, say and so. The values that
guide the thoughts and actions are:

24

Quality:
Dr.Reddy’s is dedicated to achieving the highest levels of quality in everything we do to delight
customers, internal & external, every time.
Respect for the individual:
We uphold the self-esteem and dignity of each other by creating an open culture conducive for
expression of views and ideas irrespective of hierarchy
Innovation & continuous learning:
We create an environment of innovation and learning that fosters, in each one of us, a desire to
excel and willingness to experiment.
Collaboration & Teamwork:
Dr.Reddy’s seek opportunities to build relationships and leverage knowledge, expertise and
resources to create greater value across functions, businesses and locations.
Harmony & Social Responsibility:
Dr.Reddy’s take utmost care to protect our natural environment and serve the communities in
which they live and work.
Dimensions:
Cheminor drugs Ltd. Merged in to Dr. Reddy’s Labs in the year 2000-01 restructured as
Strategic
Business Units of Dr. Reddy’s Laboratories Ltd.






Bulk
Branded formulation
Generics
R&D emerging business
Corporate center

Units:


Strategic Business Units Bulk has 6units:
3units at Bollaram
1 unit at Geedimetla
1 unit at Miryalaguda
1unit at Pydi Bhimavaram



Strategic BU Formulation has 8 units:
1 unit at Bollaram (INJ)
25

2 units at Bachupally (OSD)
2 unit at Vishakapatnam (INJ, OSD)
2 units at Baddi (OSD)
1 unit at Yanam (OSD)
FTO-9 is Unit being constructed in Vishakapatnam (INJ)

2.2 STP (Segmenting, Targeting and Positioning)
Segment:
Active Pharmaceutical Ingredients (APIs), Custom Pharmaceutical Services (CPS), generics,
biosimilars`, differentiated formulations and News Chemical Entities (NCEs)
Target Group:
Healthcare professionals, retail outlets
Positioning:
Committed to providing affordable and innovative medicines for healthier lives

2.3 Major Competitors:
Indian pharmaceutical industry is globally ranked fourth in terms of volume, constituting 8%
of total world’s production. Its value is estimated at $17 billion. Thanks to the technological
investment, it has been able to mass produce drugs from all major therapeutic groups. It is one
of the most attractive industries globally as its growth continues to outperform that of the global
industry.

1. Cipla

26

It is based in Mumbai. It stands for Chemical, Industrial and Pharmaceutical Laboratories. It
manufactures drugs for arthritis, cardiovascular diseases, diabetes, weight control, etc. Tamiflu,
Relenza, etc are some of the drugs manufactured by it.
Net sales = 69.77 billion INR

2. Ranbaxy labs

It has its headquarters in Gurgaon. Japanese pharma company Daiichi Sankyo acquired a majority stake
in the company in 2008. Its products are exported to about 125 countries. Revital, Volini, etc are some
of the products it produces.
Net sales = 63.03 billion INR

3. Lupin Laboratories

It is based in Mumbai. It is one of the fastest growing generic drug players in the U.S. and Japan. Antara,
Suprax, etc are some of the drugs manufactured by it. It is a leading manufacturer of cephalosporin.
Net sales = 53.64 billion INR

27

4. Aurobindo Pharma

It has its headquarters at Hyderabad. It is a manufacturer of generic drugs and APIs. It produces
antibiotics, anti-retrovirals, anti-allergics, cardiovascular products, etc. AstraZeneca and Pfizer are its
marketing products. Ritonavir, Raloxifene, etc are some of its products.
Net sales = 42.84 billion INR

5. Sun pharma

Its headquarters are at Mumbai. India and the U.S. are the prime markets for its drugs. It
manufactures drugs for cardiology, psychiatry, neurology, etc. Aquamet nasal spray, Pantocid,
etc are some of the drugs it manufactures.
Net sales = 40.15 billion INR

28

6. Cadila Healthcare

Its headquarters are at Ahmedabad. It produces not only pharmaceutical products but also
diagnostics, herbal products, skin care products and a lot of OTC products. It is also a generic
drug manufacturer. Pantoprazole, agiolax, etc are some of its products.
Net sales = 31.52 billion INR

7. Torrent pharma

It is an Ahmedabad based company. It is a flagship company of Torrent group, earlier known
as Trinity Laboratories Ltd. It has around 1000 products. Androz 50, Alpraz plus, etc are some
of its products.
Net sales = 27.66 billion INR

29

8. Jubilant Life

It is a leading Drug discovery and development solutions provider out of India. It has its
presence in 98 countries across the globe. Terazosin, Prednisone, etc are some of the drugs it
manufactures. It also manufactures a lot of radiopharmaceuticals like Iodine-131, Xe133, etc.
Net sales = 26.41 billion INR

9. Wockhardt

It has its headquarters in Mumbai. A large percentage of its revenues are from Europe. The
company has its presence not only in the developed nations but also in developing countries
like Russia, Brazil, Vietnam, etc. It also owns the Wockhardt hospitals. Wockhardt used to
manufacture baby food Farex and nutrition drink Protinex which it later sold to Abbott pharma.
Net sales = 26.5 billion INR

30

2.4 Organizational Hierarchy:
WHOLE-TIME DIRECTORS
Satish Reddy

-

Chairman

Satish Reddy is the Chairman of Dr Reddy’s Laboratories Ltd. His association with Dr.
Reddy’s began in 1991 when he joined Globe Organics, a Dr. Reddy’s group company as
Executive Director.
In 1993, he was appointed as Executive Director of Dr. Reddy’s Laboratories. In 1997 he
became Managing Director and in 2013 was appointed Vice Chairman and Managing Director.
Satish directs two of the company’s core businesses: Pharmaceutical Services & Active
Ingredients and Global Generics, the key revenue earning streams.

G V Prasad

-

Co- Chairman & CEO

31

Prasad leads the core team which drives growth and performance at Dr. Reddy’s. He is the
architect of the company’s successful Global Generics and API strategies, and has spearheaded
Dr. Reddy’s foray into Biosimilars and Differentiated Formulations.
Prasad serves on the boards of the Indian School of Business, Institute of Life Sciences and
Acumen Fund. A Chemical Engineer from the Illinois Institute of Technology in Chicago,
Prasad additionally holds a Master’s degree in Industrial Administration from Purdue
University, US.

Management Team:
Abhijit Mukherjee -

Chief Operating Officer

Dr. Chandrasekhar Sripada Saumen Chakraborty -

President & Global Head of HR

President, CFO & Global Head of IT&BPE

Dr. R Ananthanarayanan - President - Pharmaceutical Services & Active Ingredients
(PSAI)
Umang Vohra

-

Executive Vice- President & Head- North America Generics

M V Ramana

-

Executive Vice President - Emerging Markets

Alok Sonig

-

Senior Vice President & India Business Head (Generics)

Dr. Cartikeya Reddy-

Executive Vice President - Biologics

Dr. Raghav Chari

-

Executive Vice President- Proprietary Products

Samiran Das

-

Executive Vice President & Head FTO and GGPM

Dr. Amit Biswas

-

Executive Vice President - Integrated Product Development

-

Sr. Vice President & Head - Chemical Technical Operations

(IPDO)
Dr. KVS Ram Rao
(CTO)

AWARDS AND RECOGNITIONS:
 Global HR Excellence Awards 2009-2010 for outstanding contribution to the cause of
education.
 Global HR Excellence Awards 2009-2010 for Organization with Innovative HR
Practices.
 Dr. Reddy's named Best Workplace in Biotech/ Pharma Industry June 10, 2009 ET &
Great Places to Work.
 Dr. Reddy's bags the NASSCOM-CNBC IT User Award again!

32

 Dr. Reddy's lauded for Corporate Social Responsibility at the CNBC - IBLA 2009.
 Dr. Reddy's bags award at the SAFA Best Presented Accounts Awards 2008.
 Dr. Reddy's facility in Mexico conferred the “Quality and Competitiveness Award” by
the State Govt. of Morelos.
 IFPRESS confers Dr. M Venkateswarlu Memorial Award 2009 on Dr. Reddy's.
 Founder Chairman, Dr. Anji Reddy conferred the BioSpectrum Asia-Pacific Life Time
Achievement Award 2010.
 ICAI Award for Golden Peacock Award for Excellence in Corporate Governance.

2.5 SWOT Analysis:
Strengths:
1. Company launched Peg-grafeelTM, an inexpensive variety of pegfilgrastim, used to
fight infection in chemotherapy where company has sold some 1.5 million units of it.
2. Dowpharma/Chirotech acquisition provided proprietary chiral and bio-catalysis
technology.
3. The acquisition of Beta pharma helped to introduce an array of generic products and
show its presence in the European markets.
4. Has a strong workforce of over 15,000 employees
Weakness:
1. Discovery of drugs is a highly unpredictable business
2. Strict government regulations and policies affects operational efficiency
Opportunities:
1. Leverage Biologics & Cytotoxic Infrastructure to deal with the need of Oncology
Market
2. New partnerships to develop Biosimilars business
3. Develop cost effective ways of new drug development to improve business in emerging
markets
Threats:
1. Preliminary investment for Drug discovery is very high
2. Long gestational period for new drug development
3. Increasingly stringent regulations for new drug development
33

CHAPTER - III
DISCUSSION ON TRAINING

34

DISCUSSION ON TRAINING
3.1 WORK PROFILE:
Designation

: Marketing Intern

Department

: Sales and Marketing

Reporting To

: Marketing Manager (Middle-east)

Job Description

: To analyze the market and prepare a report

Working Hours

: From 9 am to 6 pm (from Monday to Friday)

3.2 ROLES AND RESPONSIBILITIES
Role:


I have been assigned to work along with marketing team of the company straight away
after joining.

Responsibilities:


Work along with marketing team and understanding about the pharmaceutical industry
and also learning the pharmaceutical terminology.



To analyze the pharmaceutical market from the given data and prepare a report. (Such
as what are the top companies, their growth, market share and etc.)



To collect the data about different countries pharmaceutical market from the employees
of marketing team who are dealing with that particular country.



Profiling of the companies which are competitors to Dr.Reddy’s (Collecting the data
from various sources).

3.3 CONTRIBUTION TO THE ORGANIZATION
 After the efficient training and study, I was able analyze the market trends.
 Successfully submitted the report of different countries and companies.
 My efforts and contribution helped the company to understand the market and take
strategic decisions in marketing and introducing new products and reach their targets
to certain extent.

35

CHAPTER - IV
RESEARCH METHODOLOGY

36

RESEARCH DESIGN
4.1 Introduction and Background
Marketing: The action or business of promoting and selling products or services,
including market research and advertising.
Marketing Strategy: Marketing strategy is defined as a process that can allow an
organization to concentrate its resources on the optimal opportunities with the goals of
increasing sales and achieving a sustainable competitive advantage. Marketing strategy also
means identifying the specific marketing mediums you will use to position your product in the
marketplace. Marketing strategy will depend on the target market.
Dr.Reddy’s is one of the leading pharmaceutical company in the country. The company
has a good distribution channel and also it has huge market share in the country. Dr.Reddy’s is
a major player in generics market.
This research is carried out to find out the marketing strategy followed by the different
pharmaceutical companies. To anticipate the promotional strategies or measures for selling
their products. Dr.Reddy’s is one of the leading pharmaceutical company in India. This
research helps to know the promotional activities of the different companies and to implement
the strategies.
In the pharmaceutical business, 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 organizations bring out ‘strategy guides, which
provide details on inputs, information on competition, approaches to detailing and sometimes
a chart on incentives.
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.

4.2 Research Design
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.

37

This is a conclusive type of research. It is used where alternative choice can be done or
the description of the situation has to be made. The researcher must be able to define what he
wants to measure and must find adequate methods of measuring the population. Since the aim
of the study is to obtain complete and accurate information, the procedure must be carefully
planned.
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.

4.2.1 Statement of the problem:
The purpose of this study was to identify and evaluate the marketing strategies being used by
pharmaceutical companies in India. The study will benefit pharmaceutical companies who wish
to market their products in several ways.

4.2.2 Research Objective:
 To study the Marketing strategy implemented in Pharmaceutical Industry.
 To study the effectiveness of sales promotion in pharmaceutical industry.
 To know the distribution channel adopted by existing players in the industry.

Scope of the study:
The research is carried out in Hyderabad region during the period of April and May
2014. The data was collected from the medical practitioners and medical representatives.
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, 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.

4.3 Research Methodology
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.
38

External Source: This originates outside the field of study like books, periodicals, journals,
newspapers and Internet.

Sample Size:
Sample size

:

50

Sample area

:

Hyderabad

Sample Unit
:
Officials of many
Practitioners, medical representatives in Hyderabad

pharmaceutical

companies,

medical

Data Collection
Primary data: Primary data was selected from the sample by a self-administrated
questionnaire in presence of the interviewer.
Secondary Data: Secondary data was collected through Articles, Reports, Journals,
Magazines, Newspapers and Internet.
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.
Sampling Technique
Convenience 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

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.

Limitations:
1. This report is based on some selected questionnaire only.
2. The report is based on only 50 sample size.
3. This data is collected only from medical representatives, Officials of pharmaceutical
companies, medical Practitioners.
4. This research is confined to Hyderabad location only.

39

4.3 DATA ANALYSIS
The following is the analysis of the data collected from the 50 respondents on the study of
marketing strategies of pharmaceutical industry.
1. For how many years you are practicing as a medical practitioner (Doctor)?






Less than one year ---------------------------------From one to five years ----------------------------Five to Ten years ----------------------------------More than Ten years ------------------------------Cannot remember ---------------------------------

17 per cent
32 per cent
36 per cent
12 per cent
03 per cent

40%
35%
30%
25%
20%

Less than five years
Five to ten years

15%

Ten to Twenty years

10%

More than twenty years
Can not remember

5%
0%
Less than five years
Five to ten years
Ten to Twenty years
More than twenty years
Can not remember

17%
32%
36%
12%
3%

Fig 4.1: Practicing as a medical practitioner

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.

40

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’t say -------------

07 per cent

45%
40%
35%
30%
25%

Agree

20%

Strongly Agree

15%

Disagree

10%

Strongly Disagree

5%

Do not know/ Can not say

0%
Agree
Strongly Agree
Disagree
Strongly Disagree
Do not know/ Can not say

43%
37%
9%
4%
7%

Fig 4.2: 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.

41

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’t say ---------- 04 per cent

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Agree
Strongly Agree
Disagree
Strongly Disagree
Do not know/ Can not say

50%
32%
10%
4%
4%

Fig 4.3: 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.

42

4. 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’t say ----------------

02 per cent

60%
50%
40%
30%

Agree
Strongly Agree

20%

Disagree
Strongly Disagree

10%

Do not know/ Can not say

0%
Agree
Strongly Agree
Disagree
Strongly Disagree
Do not know/ Can not say

60%
37%
1%
0%
2%

Fig 4.4: 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.

43

5. 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’t say -----------------

04 per cent

100%
90%
80%
70%
60%
50%
40%

Yes
No

30%

Do not know/ Can not say

20%
10%
0%
Yes

95%

No

1%

Do not know/
Can not say

4%

Fig 4.5: 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.

44

6. 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/ Cannot say -----------------------------

15 per cent

60%
50%
40%
30%
They aim to inform about
the product
They aim to persuade to
purchase
Other motives

20%
10%
0%
They aim to
inform about
the product

22%

They aim to
persuade to
purchase

60%

Other motives

3%

Do not know/
Can not say

15%

Do not know/ Can not say

Fig 4.6: 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.

45

7. 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/ Cannot say ---------------------------------------- 01 per cent

90%

Implement, improve and monitor
legislation

80%

Measures to improve the
transparency of drug companies’
marketing activities

70%
60%

Stop the practice of gifts to doctors

50%
Ensure codes of conduct on drug
promotion

40%
30%

Other measures

20%
10%

Do not know/ Can not say

0%

Fig 4.7: 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.

46

8. 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/ Cannot say---------------------

10 per cent

60%
50%
40%
30%
yes
no
cant say

20%
10%
0%
yes

36%

no

54%

cant say

10%

Fig 4.8: The Challenges of the Foreign Players

From the above table and graph:


It is inferred that 54 percent of the respondents agree that entry of multinationals is not
a major challenge to the domestic players and also they are strong enough to face the
challenges.

47

9. What type of Marketing Strategy would you prefer to expand your Market size?
 B2B -----------------------------------------------

23 per cent

 B2C------------------------------------------------

32 per cent

 Both -----------------------------------------------

45 per cent

45%
40%
35%
30%
25%
20%

B2B
B2C
Both

15%
10%
5%
0%
B2B

23%

B2C

32%

Both

45%

Fig 4.9: Market size

From the above table and graph:

It is inferred that B2B and B2C both strategies are preferred in expanding the market size.

48

10. 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

40%
35%
30%
25%
fragmentation of the market

20%

risk due to price control
mechanism
MNC's

15%
10%

Others

5%
0%
fragmentation of the market
risk due to price control
mechanism
MNC's
Others

38%
22%
23%
17%

Fig 4.10: Major challenge from the Marketing

From the above table and graph:

It is inferred that fragmentation of market is the major challenge that company faces in
expanding their business.

49

11. 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

45%
40%
35%
30%
25%
better supply chain

20%

emotional branding

15%

corporate alliances

10%

greater media participation
others

5%
0%
better supply chain
emotional branding
corporate alliances
greater media participation
others

34%
42%
12%
10%
2%

Fig 4.11: Suggest to better market your products

From the above table and graph:
It is inferred that emotional branding is the most innovative distribution channel used in
marketing the products.
50

12. 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’t say---------------

18 per cent

80%
70%
60%
50%
40%
yes
no
cant say

30%
20%
10%
0%
yes

75%

no

7%

cant say

18%

Fig 4.13: Distribution channels will help in marketing of Pharma products in India

From the above table and graph:

It is inferred that technology utilization is an innovative distribution channel which helps in
marketing products in an efficient manner.

51

13. Major weakness of the pharmaceutical industry’s marketing strategy.

 Branding ---------------------------------

07 per cent

 Publicity ---------------------------------

09 percent

 R&D -------------------------------------

77 percent

 Do not know / can’t say ------------

07 per cent

80%
70%
60%
50%
branding

40%

publicity

30%

R&D

20%

cant say

10%
0%
branding
publicity
R&D
cant say

7%
9%
77%
7%

Fig 4.14: Major weakness of the pharmaceutical industries

From the above table and graph:

It is inferred that R&D is considered as the weakness for pharma companies in India.

52

14. Do you follow branding of products as a marketing strategy?

 Yes ----------------------------------------------------------------------- 74 percent
 No ------------------------------------------------------------------------ 05 percent
 Do not know/ Can’t say -------------------------------------------- 21 percent

80%
70%
60%
50%
40%
yes
no
cant say

30%
20%
10%
0%
yes

74%

no

5%

cant say

21%

Fig 4.15: Products as a marketing strategy

From the above table and graph:

It is inferred that branding of product in the minds of customer is a branding strategy practiced
in pharma companies.

53

15. 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.

54

16. 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

45%
40%
35%
30%
25%
20%

yes
no
cant say

15%
10%
5%
0%
yes

21%

no

43%

cant say

36%

Fig 4.15: Pharmaceutical sector in India

From the above table and graph:

It is inferred that most of the respondents are against FDI allowing in pharmaceutical in India.

55

4.5 FINDINGS, OBSERVATIONS & CONCLUSION

Findings:



















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.
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.
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.
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.
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.
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.
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.
It is inferred that 54 percent of the respondents agree that entry of multinationals is not
a major challenge to the domestic players and also they are strong enough to face the
challenges.
It is inferred that B2B and B2C both strategies are preferred in expanding the market
size.
It is inferred that fragmentation of market is the major challenge that company faces in
expanding their business.
56







It is inferred that emotional branding is the most innovative distribution channel used
in marketing the products.
It is inferred that technology utilization is an innovative distribution channel which
helps in marketing products in an efficient manner.
It is inferred that R&D is considered as the weakness for pharma companies in India.
It is inferred that branding of product in the minds of customer is a branding strategy
practiced in pharma companies.
It is inferred that most of the respondents are against FDI allowing in pharmaceutical
in India.

Conclusion:










Marketing and sales of pharmaceutical products is very different from other products
such as say groceries, cosmetics, food items, vehicles, etc.
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.
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.
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.
The structure and the dynamics of the pharmaceutical industry are different from that
of other industrial domains.
Indian pharmaceutical industry is climbing up the value chain from bringing a pure
reverse engineering industry focus on domestic market.

Recommendations:
 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.

57

BIBLIOGRAPHY

Reference Books:

1. C.R. Kothari, “Research Methodology methods and techniques”, New Age
International (p) ltd. Publishers, 2nd edition.

2. Phillip Kotler, “Marketing Management”, 13th Edition, Pearson education Asia
publication

Websites:-

www.drreddys.com

www.scribd.com

www.wikipedia.com

www.historyofpharmaceuticalindustry.com

www.otcpharmaceuticalproducts.com

58

ANNEXURE
Questionnaire:
1 For how many years you are practicing as a medical practitioner (Doctor)?






Less than one year
From one to five years
Five to Ten years
More than Ten years
Cannot 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’t say

3 Do you agree that the marketing strategy of the pharmaceutical industry should
be different from the marketing strategy in non-pharmaceutical segments?






Agree
Strongly Agree
Disagree
Strongly Disagree
Do not know/ Can’t say

4 Do you agree that the pharmaceutical companies need to use innovative and better
promotional measures for selling their products?






Agree
Strongly Agree
Disagree
Strongly Disagree
Do not know/ Can’t say

5 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’t say

59

6 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
They aim to persuade to purchase
Other motives
Do not know/ Cannot say

7 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
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/ Cannot say

8 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/ Cannot say
9 What type of Marketing Strategy would you prefer to expand your Market size?
 B2B
 B2C
 Both
10 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

11 What innovative distribution channel do you suggest to better market your
products?






Better consumer supply chain
Emotional Branding
Alliance with other corporate leaders for promotion of the product
Greater media participation and power branding
60

 Others
12 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’t say
13 Major weakness of the pharmaceutical industry’s marketing strategy.






Branding
Publicity
R&D
Do not know / can’t say

14 Do you follow branding of products as a marketing strategy?

 Yes
 No
 Do not know/ Can’t say
15 Do you have a dealer network? Do you sell directly or through dealers?

16 Do you think that foreign direct investment (FDI) should be allowed in the
pharmaceutical sector in India?

 Yes
 No
 Do not know/ Cannot say

61