L.J.

Institute of Computer Applications

- MBA

Report
On
Pharma-Healthcare Industry
In
India
(Marketing Management – Abhijeet Sir)
(2nd Semester)

Presented by: Tejpal Chauhan (Roll No:

06)
Vishal R. Patel (Roll No: 30)
Akash Rajpura (Roll No: 35)
 Nirav Tank (Roll No: 54)

CHAPTER -1
 INTRODUCTION

The Indian Pharmaceutical Industry today is in the front rank of India’s science-based
industries with wide ranging capabilities in the complex field of drug manufacture&technology.
A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion,
growing at about 8 - 9 % annually. It ranks very high in the third world, in terms of
technology, quality and range of medicines manufactured. From simple headache pills to
sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now
made indigenously.

It is playing a key role in promoting and sustaining development in the vital field of
medicines, Indian Pharma Industry boasts of quality producers and many units approved by
regulatory authorities in USA and UK.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered
units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical
companies control 70% of the market with market leader holding nearly 7% of the market
share. It 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 injectibles. There are about 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). These
units produce the complete range of pharmaceutical formulations, i.e., medicines ready for
consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and
used for production of pharmaceutical formulations

Following the de-licensing of the pharmaceutical industry, industrial licensing for most of
the drugs and pharmaceutical products has been done away with. Manufacturers are free to
produce any drug duly approved by the Drug Control Authority. Technologically strong and
totally self-reliant, the pharmaceutical industry in India has low costs of production, low R&D
costs, innovative scientific manpower, strength of national laboratories and an increasing balance
of trade.

 ADVANTAGE OF INDIA

 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 53 year old democracy and hence
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.
 TOP 50 PHARMA COMPANIES IN INDIA ACCORDING
TURNOVER

Turn Over Turn Over

S.NO Company Name
(Rs crore) (US $ Mill)
1 Ranbaxy Laboratories Ltd. 4243.00 987.00
2 Cipla Ltd. 2055.00 478.00
3 Dr. Reddy'S Laboratories Ltd. 1839.00 428.00
4 Nicholas Primal India Ltd. 1440.00 335.00
5 Aurobindo Pharma Ltd. 1341.00 312.00
6 GlaxoSmithKline Pharmaceuticals Ltd. 1242.00 289.00
7 Lupin Ltd. 1233.00 287.00
8 Cadila Healthcare Ltd. 1172.00 273.00
9 Sun Pharmaceutical Inds. Ltd. 936.00 218.00
10 Wockhardt Ltd. 767.00 178.00
11 Aventis Pharma Ltd. 724.00 168.00
12 Orchid Chemicals & Pharmaceuticals Ltd. 713.00 166.00
13 Ipca Laboratories Ltd. 665.00 155.00
14 Alembic Ltd. 614.00 143.00
15 Pfizer Ltd. 594.00 138.00
16 Morepen Laboratories Ltd. 570.00 133.00
17 U S V Ltd. 561.00 131.00
18 Matrix Laboratories Ltd. 557.00 130.00
19 Biocon Ltd. 537.00 125.00
20 Novartis India Ltd. 516.00 120.00
21 Torrent Pharmaceuticals Ltd. 507.00 118.00
22 Abbott India Ltd. 446.00 104.00
23 Cadila Pharmaceuticals Ltd. 444.00 103.00
24 Merck Ltd. 404.00 94.00
25 Unichem Laboratories Ltd. 388.00 90.00
26 Glenmark Pharmaceuticals Ltd. 382.00 89.00
27 Wyeth Ltd. 352.00 82.00
28 Divi'S Laboratories Ltd. 320.00 74.00
29 J B Chemicals & Pharmaceuticals Ltd. 315.00 73.00
30 F D C Ltd. 305.00 71.00
31 Emcure Pharmaceuticals Ltd. 304.00 71.00
32 Panacea Biotec Ltd. 277.00 64.00
33 Strides Arcolab Ltd. 276.00 64.00
34 Shasun Chemicals & Drugs Ltd. 273.00 64.00
35 Elder Pharmaceuticals Ltd. 270.00 63.00
36 Macleods Pharmaceuticals Ltd. 258.00 60.00
37 Aarti Drugs Ltd. 238.00 55.00
38 Dabur Pharma Ltd. 215.00 50.00
39 Nectar Lifescience Ltd. 213.00 50.00
40 Ind-Swift Ltd. 212.00 49.00
41 Astrazeneca Pharma India Ltd. 196.00 46.00
42 Unimark Remedies Ltd. 194.00 45.00
43 Jagsonpal Pharmaceuticals Ltd. 184.00 43.00
44 Organon (India) Ltd. 181.00 42.00
45 Surya Pharmaceutical Ltd. 173.00 40.00
46 Ind-Swift Laboratories Ltd. 167.00 39.00
47 Dishman Pharmaceuticals & Chemicals Ltd. 129.00 30.00
48 Ajanta Pharma Ltd. 121.00 28.00
49 Concept Pharmaceuticals Ltd. 88.00 21.00
50 Flamingo Pharmaceuticals Ltd. 90.00 21.00
CHAPTER -2
 THE VALUE CHAIN

 First let’s understand the supply chain of Indian pharmaceutical industry.

Fig. Showing Traditional View of marketing that is the firm can make something
and then sell it.

Fig 1 : Pharmaceutical Supply

Chain from Factory to Shelf

The supply chain of Indian pharmaceutical is chain from Factory to customer as

shown in Fig.1 There has been a paradigm shift in the supply chain process of Indian
pharmaceutical industry. Value added tax, consolidation of Pharma companies and
emergence of Pharma retail chains are some the factors that are driving the changes in the
distribution cycle.

Companies that subscribe to this view have a best chance of succeeding in

economies marked by goods shortage where consumers are not fussy about quality,
feature or style.
 In today’s hypercompition economy with increasingly rational buyers faced with
abundant choice, a company can win only by fine-tuning the value delivery process and
choosing, providing and communicating superior valve.

For Successful Marketing is not only requiring proper channeling of supply chain
but it involves satisfying customer’s needs and wants. The task of any business is to
deliver customer value at profit while social responsible.

The Value chain identifies nine strategically relevant activities – Five

Primary and Four Support activities –that create vale and cost in specific business.

General Chain for Pharmaceutical Industry

Figure 1: General Chain for Pharmaceutical Industry

Figure 1 depicts the basic components of the pharmaceutical global value chain.
All of these functions can be carried out by a large, vertically integrated
pharmaceutical firm, or certain segments (typically with the lesser value-add) can be
contracted out to other firms. The trend of contracting other, lower-cost firms for
certain segments of production has grown recently over the past decade.
 For a more in-depth look at the major segments of the pharmaceutical industries
to create value chain

Discovery:

The Discovery process, or the "research" of R&D,

is initiated by after a specific biological target is
identified. This target, in the form of a gene or a
chemical, is manipulated to form the desired result. Then
it is tested through series involving cells, tissues, and
mice.

After a few cycles and the compound have been

optimized, the firm applies for the intellectual property
rights (patent) through its legal and administrative
departments. The drug will have to go through more
studies and trials for as long as 12 years before
government authorities will grant permission for the
company to market the drug.
Product Development:

The Product Development process, or

the "development" of R&D, exists primarily due
to the fact that the pharmaceutical industry is so
highly regulated. With institutions like the FDA
of the US establishing strict guidelines in order
to ensure the safety of its citizens, the
compounds that are developed in the discovery
phase are filtered through a series of clinical
studies. These trials last for about four to seven
years, after about one year of pre-clinical tests.
Total, the pre-clinical and clinical trials make up
about 25% of all development costs, or about
$170-240 million.

After clinical trials on human test

subjects are successfully completed, the
pharmaceutical company can apply for approval
from the FDA (in the US) to market the drug.
Tests are also required to continue into the post-
marketing Phase IV trials since clinical trials are
limited in size. If the drug performs hazardously
in the larger populous,the FDA may recall the
substance from the market entirely.

Fig Shows systematic Product

development process which start with clinical
trial and end at Phase IV (means stage at which
product is completely approved by regulatory
bodies.
Manufacturing:

Manufacturing occurs during the

Product Development segment (for the
production of clinical lots drugs for the trials)
and for the production to market.

The process of manufacturing is heavily

regulated by governmental institutions in the
pharmaceutical industry in order to ensure that
the drugs are safe for consumption. Because of
this, the process is heavily controlled, the
facilities are held to high quality standards, and
worker aptitude is actively monitored.

Fig Shows complete manufacturing

process of Pharma start from Chemical
synthesis – Purification – formulation
Development to Dosage Form manufacturing

It’s also including Distribution chain

which starts from packaging to storage to
transportation logistics.
Marketing:

Marketing, distribution, and sales is the

final step in the chain to deliver the
manufactured goods to consumers. They can
arrive there through two channels: direct-to-
consumer or through medical practitioners. The
former channel is for over-the-counter (OTC)
drugs, and the latter for prescription medication.

In order to market a prescription-only

product, pharmaceutical companies typically
have large, highly-skilled sales representatives
hold conferences for doctors and the medical
community in order to present data from the
clinical trials. Otherwise, they send promotional
materials and information to individual
practitioners and hospitals, or have personalized
sales representatives sent to sell the product.

OTC medications are marketed through

television advertisements, print media, or the
Internet.

The drugs are then typically distributed

through wholesalers and retail chains.