RURAL PHARMA MARKET

CHALLENGES AND ISSUES

Presented By DAXESH PATEL MBA 1st Sem

FLOW OF PRESENTATION
INDIA HAS DISCOVERED THE WORLD

MARKET PHARMA MARKET IN INDIA POTENTIAL OF PHARMACEUTICALS IN RURAL MARKETS GROWING OPPORTUNITIES STRATEGIES FOR RURAL MARKETING 4 Ps OF RURAL MARKET THE 4A APPROACH OTHER OPTIONS THE SPEED BREAKERS PROMISING FUTURE

INDIA HAS DISCOVERED THE WORLD MARKET

Since the end of 1980s India has been

exporting more pharmaceuticals than it imports. The export surplus has widened from EUR 370m to EUR 20bn. At 32% in 2006, the export ratio was about twice as high as in 1996. Up until 2015,pharmaceutical sales are expected to rise by 8% p.a.

Source- Deutsche Bank Research, April 9,2008.

PHARMA MARKET IN INDIA

Fastest Growing Pharma Market Of World

In 2006-07,this was valued at $7 billion, the

rural share was $1.4 billion. Metros and cities major revenue generators. As a %age to the total market ,the rural market in India has evolved from 18% in 2005 to 21% in 2007

Source- Mckinsey Report, Indian Pharma 2015

Contd.
Rural Market vs. Urban Market
RURAL MARKET
IN 2005
IN 2007 EXPECTED IN 2015

URBAN CONTRIBUTION OF MARKET

82%
79% 56%

18%
21% 44%

What does Mckinsey report say?

5 factors will drive the growth of the Indian Pharma market over the next decade o Doubling the disposable incomes -40% o Significant expansion of medical infrastructure 20% o Greater penetration of health insurance-15% o A gradual shift in disease profile 10% o Population growth -15%

Middle class, rural mkt to fuel pharma growth The Financial Express: September 02, 2008 The Indian pharma industry's growth rate will touch 19% from the current normal growth rate of 13%.
The incremental growth of 6.6% will be fuelled

by factors like a growing middle class (contributing 2% of the incremental growth), pricing of the pharma products (1%), untapped rural markets (2%), and marketing efficiencies (1%).
The middle class, estimated to consist around

8% of total population, is expected to grow four-fold by 2015 to reach 364 million

POTENTIAL OF PCEUTICALS IN RURAL MARKET

Intense Competitio n in Urban Area

Health Insurance

Potential

72.2% Populatio n

Rising Income

GROWING OPPORTUNITIES

Access to Better Healthcare Facilities

Lifestyle Diseases

Rising Aspiration of Better Health

Marketing of OTC Products in Rural Markets

Huge Scope for OTC drugs.

Spurious,

Untapped Market

Big Market Opportunity

Misbranded Qualities present

STRATEGIES FOR RURAL MARKETING

PENETRATION IN OTC SEGMENT AYURVEDIC REGIONAL BRANDS

P to P or P to G CONTACT

Contd..

Focused Distribution Channels

Developing Locally Trained Sales Personnel

Regularly Updating Rural Physicians

4 Ps OF RURAL MARKET
LUPIN- Quality medicines at Affordable price Close to the people by creating AwarenessAROGYA JAGRITI MELA ,SWASTHA MELA by recruiting and developing persons of local region as MEDI- PRACHARAKS
PRODUCT PRICE

PLACE

PROMOTION

NOVARTIS 4A Approach
The more daring MNCs are meeting the challenges of
AVAILABILITY AFFORDABILITY

ATTRACTIVENESS

AWARENESS

DISTRIBUTING DRUGS
Different strategies by different companies

LUPIN has a strong franchise in anti-infective

, pain management and GI agents. Dedicated rural field force of more than 300 people Nicolas Piramal has field force of 800 people to cater to rural market. Novartis has awareness campaign in rural areas. Ranbaxy has already a major presence.

OTHER OPTIONS
Companies can create separate marketing division to the rural marketing. Ipca was the first company to create separate division called as INTIMA. Cadilas rural division Explora has contributed around Rs 50 crore to the companys revenue. Nicholas Piramal enters rural pharma market .It has launched a pilot project in Rajasthan to take its drugs to rural areas

Contd.
Vadodara-based Alembic also established its

rural business division, Maxis.

Mankind Pharma focuses on the grassroots

by tapping small towns and rural areas through its team of about 1,900 medical representatives.
Ranbaxy had setup continuous medical

education (CME) hubs, which are highly valued by doctors.

Himalaya gets ready for rural play

Himalaya Drug Company is set for a bigger

push into rural markets with the launch of a new strategic business unit (SBU).
The new division Zera will take

Himalayas products to doctors.

PHARMA COMPANIES IN RURAL AREAS SHOULD CONSIDER

Price

Delivery Spread
Availability Safety Quick Relief Profit Margins and Incentive

THE SPEED BREAKERS

Underdeveloped Markets

Absence of Regional Brands

Communication Facilities

Low per capita Income

Dispersed Market

HEALTHCARE SYSTEM IN INDIA

NATIONAL LEVEL Ministry of Health and Family welfare

STATE & U.T.S. Department of Health Family Welfare

DISTRICTS District Hospital

Continued..
District Level
URBAN AREAS RURAL AREAS

Hospital Dispensary

Community Health Centre Primary Health Centre Sub-centre Village Health Guides and trained Dias

Rural-Urban Disparities India

RURAL (per 1000 population) Hospital Beds = 0.2 Doctors = 0.6 Public Expenditure = Rs.80, 000 Out of pocket = Rs.750, 000 URBAN (per 1000 population) Hospital Beds = 3.0 Doctors = 3.4 Public Expenditure = Rs.560, 000 Out of Pocket = Rs.1, 150,000

Source: Centre for Enquiry into Health and Allied Themes

CHALLENGES

Inadequate Infrastructure Connectivity Problem Distance Local Remedies Unavailability of Stockists Lack of Proper Distribution Network

PUBLIC PRIVATE PARTNERSHIPS

Essential Strategy

Initiative to Improve
o Efficiency o Effectiveness

o Equity

in the Provision of Health Care Services

A DIFFERENT BALL GAME

Pharma companies have to play a dual role of

an educator and provider Each village is different in its ethnicity, values and culture. The companies would have to price their products strategically keeping in mind the spending power of villagers

PROMISING FUTURE
Significant Share of Rural Pharma Market
Emerging Rural Middle Class Improving Health Care Facilities

Government Plans

THANK YOU