Comparative study of various brands in Atorvastatin therapy UTTAM KUMAR PATRA (PG09-112) INMANTEC BUSINESS SCHOOL GHAZIABAD

Final dissertation project submitted in Partial Fulfilment of the Requirements f or the Award of Post Graduate Diploma in Management, INMANTEC Business School, G haziabad, India. (Recognized by AICTE, Ministry of HRD, Govt. of India) Comparative study of various brands in Atorvastatin therapy By UTTAM KUMAR PATRA PGO9-112 Under The Guidance Of PROF. KAMAL GUPTA. Assistant Professor INMANTEC, Ghaziabad INMANTEC BUSINESS SCHOOL GHAZIABAD Date: 14-04-11

Appendix I DECLARATION I, Mr. Uttam Kumar Patra (PG09-112) hereby declare that this project report is t he record of authentic work carried out by me and has not been submitted to any other University or Institute for the award of any degree / diploma etc. Uttam Kumar Patra PG09-112 Date: 14-apr-2011

Appendix II

Appendix III ACKNOWLEDGEMENT This project is entirely nourished by the careful supervision of Mr. Sailendra S harma, ASM- Zenura 3, New Delhi, Dr. Reddys Laboratories. Without his guidance th is report would not be promoted as a successful one. Whenever I needed any kind of help or advice, he stretched his helpful being to answer my queries and guide d me in the best possible way to complete this project work. Prof. Kamal Gupta, assistant professor, INMANTEC, has also performed a great role of assistance wit h all his vast knowledge and experience to give a clear structure to this projec t. He has monitored every week progress of the project while also enlightening t he uncovered areas of my knowledge. Last but not the least I would like to ackno wledge the chemists who are the primary sources of collected information and dat a. Without their help & generous contribution in giving me the right information I would not have been able to do this project work perfectly. I like to thank t hem for their kind cooperation in this regard. Uttam Kumar Patra

Content CHAPTER NO. CHAPTER 1 Appendix IV Title Introduction Objective Review and Literature The Indian Pharmaceutical Industry Industry structure Types of drug system in India Industry segmentation Pharmaceu tical regulatory bodies in India Indian Pharma: Qualitative analysis Porter five force model SWOT Analysis Pharma Marketing And Its Challenges Sales Promotion A ctivity Through Medical Representatives Distribution Molecules Used in survey Re search Methodology Research Design Sampling Design Data Collection Data Analysis technique Research Limitations Analysis Findings Conclusion Recommendations PAGE NO 1 3 4 6 8 9 9 20 21 21 23 25 29 30 31 33 33 33 34 34 35-39 40 41 42 43-44 45 CHATER 2 CHAPTER 3 ANNEXURE BIBLIOGRAPHY

List of Graphs and chart: Sl No. G1: G2: G3: G4: G5: G6: G7: G8: Appendix V Description Page No 35 36 36 37 37 38 39 39 Type of business pharma company in cardiovascular segment chemist perception towards drug company type of which statin mostly sold in the market Atorvastatin brand mostly sold i n the market types of Atorvastatin composition types of Atorvastatin combination Sales of Atorvastatin per shop

Executive Summary Appendix VI Now a day in this competitive world there are many companies are existed. Every company wants to attract more and more customers to them there are many policies which are being implementing by these companies. There are various products of big companies which failed due to lack of aggressive marketing and proper promot ion of that product. The following report details the comparative study of vario us brands in Atorvastatin therapy. Atorvastatin is the no 1 drug throughout the world. The report also deals with market potential for Atorvastatin as well as v arious brands of atorvastatin. This write-up is arranged in such a manner as to follow the collected data from chemists through personal interviews, surveys and a detailed questionnaire was designed for that purpose. The interviews have bee n conducted from the respondents at different locations in north Delhi. The samp le includes 100 respondents. The data gathered has been analyzed on a question-b y-question basis. The details of the research findings are mentioned after the a nalysis, and recommendations are given to the management based on the research f indings.

INTRODUCTION Drug Company Cipla maintained its top position in the domestic market for the 12 months ended December, 2009, with a market share of 5.38 per cent up 18 per cen t over the year and ahead of Ranbaxy Laboratories and GlaxoSmithKline (GSK). Cip la regained its numerous positions in the Rs 33,000-crore domestic retail market with 5.32 per cent market share, marginally ahead of Ranbaxy, which had 5.08 pe r cent share. ORG-IMS tracks sales of pharmaceutical drugs in India on a monthly -basis through over 3,000 stockiest and 6,000 doctors. Currently, Cipla sells 1, 085 brands for various diseases in India, way ahead of 729 drugs sold by Ranbaxy , according to informed trade sources. Cipla overtook Ranbaxy and GlaxoSmithKlin e India (GSK) to become the largest pharmaceutical company in the domestic marke t for the first time in May 2007. Thereafter, it was a close battle between Ranb axy and Cipla. The total domestic drug market is valued at Rs 40,051.74 crore, a n increase of 17 per cent over the previous year, according to data from drug sa les tracking agency, ORG-IMS. The agency tracks drug sales among more than 500,0 00 traders in the country, through stockist data. Ciplas domestic market share gr ew 18 per cent during the year, thanks to its product basket of 924 products, wh ich is way ahead of Ranbaxys 565 and GSKs 177 products. Ranbaxy got a market share of 4.91 per cent and GSK had a market share of 4.35 per cent, with a growth of 13.7 per cent and 18 per cent, respectively, in 2009. During the period, Cipla h ad sales of Rs 2,155.29 crore in the domestic market, ahead of Ranbaxys Rs 1,968. 24 crore and GSKs Rs 1,743.15 crore. Cipla had overtaken Ranbaxy and GSK India to become the largest pharmaceutical company in the domestic market for the first time in May, 2007, according to sources. Piramal Healthcare, Zydus Cadila, Sun P harma, Alkem Laboratories, Mankind, Lupin and Aristo Pharma occupied the 4th-10t h positions in ORGIMS rankings, respectively. GROWTH TONIC. COMPANY NO.OF PRODUC TS CIPLA 924 5.38 RANBAXY 565 4.91 GSK 177 4.35 PIRAMAL 750 4.11 HEALTH CARE ZYDUS CADILA 735 1484.84 3.71 SUN HARMA 516 1449.83 3.62 (Source ORG-IMS data Change in market share over 2009). Leading Brand: Ranbaxy Cipla MOX 109.3 ASTHALIN REVITAL 88.0 SEROFLO SPORIDEX 82.1 NOVAMOX CIFRAN 76.9 MT PILL STORVAS 72.8 AEROCORT TO TAL 429 TOTAL (Rupees in Crore, for 12 ended November 2008) DOMESTICS TURNOVER (RS OF) 2155.29 1968.24 1743.15 1644.26 MARKET SHARE (%) GROWTH(%) 18 13.7 18 22.8 21.2 22.9 94.7 82.9 73.3 60.2 58.3 369.4 1

Atorvastatin, sold by Pfizer under the trade name Lipitor, is a member of the dr ug class known as statins, used for lowering blood cholesterol. It also stabiliz es plaque and prevents strokes through anti-inflammatory and other mechanisms. L ike all statins, an enzyme found in liver tissue that plays a key role in produc tion of cholesterol in the body. Atorvastatin was first synthesized in 1985 by B ruce Roth while working at Parke-Davis Warner-Lambert Company (now Pfizer). With 2008 sales of US$12.4 billion, Lipitor was the top-selling branded pharmaceutic al in the world. Worlds top-selling drugs Consensus forecasts for 2010: 1. Lipi tor (cholesterol) Pfizer $11.7 bln 2. Plavix (anticlotting) Sanofi/Bristol (BMY. N) $9.6 bln 3. Advair (asthma/COPD) GlaxoSmithKline $9.0 bln 4. Remicade (arthri tis) Merck/J&J $7.4 bln 5. Enbrel (arthritis) Pfizer/Amgen $7.1 bln 6. Humira (a rthritis) Abbott $6.8 bln 7. Avastin (cancer) Roche $6.7 bln 8. Rituxan (cancer) Roche $6.1 bln 9. Diovan (hypertension) Novartis $6.0 bln 10.Crestor (cholester ol) AstraZeneca $5.8 bln Source: Thomson Reuters. April 13, 2010. 2006 Oncology 4% Diabetic Cardic 6% 3% Orthopedic 3% Others 43% Gynaecological 5% Neurology 3% Urology Gastro 4% Intestinal 12% Fever 8% Accidents 9% Hospitalisation Cases, 2006 Source: Ernst & Young Analysis, Business Line: 2007 2

OBJECTIVE: The purpose of research is to discover answers to questions through the applicat ion of scientific procedures. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet. Though each research s tudy has its own specific purpose but the research objectives can be listed into a number of broad categories, as following: To analyze the therapeutic importanc e of Atorvastatin To analyze the prescription behavior of doctor towards Atorvas tatin To identify the sales potential of Atorvastatin of various brands in the m arket 3

REVIEW AND LITERATURE: Globalization is widely seen as a dominating phenomenon of 21st century encompas sing worldwide integration of financial systems, trade liberalization, deregulat ion and market opening resulting in a global market and patterns of industrial d evelopment. In last few decades it is evident that firms and institutions from p eripheral countries or developing world are making sustained and deliberate effo rt to take advantage of the new opportunities. The rise of East Asia followed by growth in China and India has led to emergence of new breed of Multinational En terprises (MNEs) from these countries. By the end of 2004 China emerged as fifth largest outward direct foreign investor with a total US $ 37 billion and was th e third largest exporter after Germany and the US (Child and Rodrigues, 2005). S imilarly albeit on a smaller scale in the last decade Indian economy saw a drama tic growth in overseas investment by the Indian industry. The firms from latecom er countries are making inroads in sectors such as manufacturing (steel and phar maceuticals) and services (IT) and trading as well as high technology sectors li ke semi-conductors. Some of the firms such as Infosys, Lenovo, Ranbaxy and Espat are now competing at a global level. Multinational enterprises from developing countries are a clear representation of a sustained increase in outward Foreign direct investment (FDI) from developing countries which has risen from $60 billi on in 1980 to $ 869 billion in 2000 and to a total in excess of $1trillion for t he first time in 2004 (UNCTAD, 2004). Outward FDI from developing countries acco unts for more than 10 percent of the worlds outward FDI. The rise of outward FDI and new MNEs that embody it, from economies such as India, China, Korea, Singapo re, Malaysia and Taiwan is a key phenomenon for the world economy in last decade . It shows that firms from developing countries are rising to compete at the fro ntiers of the world market and this research also focusing on the strategies the y have adopted to achieve that. The first wave MNEs from the developing world do cumented by authors such as Kumar and Mcleod (1981) and Lall (1983) succeeded as international players despite many difficulties. Their success was due as much to the difficulties encountered at home as to the incentives driving internation alization. One of the most salient features of first wave MNE activity is the di rection and motivation of FDI compared to western MNEs. Much empirical work on f irst MNEs indicated strong and marked trend investments in neighboring and other countries which were at a similar or earlier stage of their development. Promin ent first wave countries such as India, Philippines, Argentina and Columbia did not show any significant increase in either the level of the total outward FDI, nor a significant shift towards developed country hosts. But the arrival of the second wave MNEs from developing countries represents quite a different phenomen on. First wave countries experienced very low or negative economic growth rate w hereas second wave countries grew rapidly over the intervening decade and half. This has been further enhanced by fundamental changes in the world economy which were a direct result of globalization. Globalization has created a more broad a nd competitive market across countries due to convergence of production and indu strial patterns. As a result firms need to have 4 competitive advantages that ar e globally viable rather than domestically. Most of these developing countries a lso went through a fundamental shift in the policy orientation from an import su bstituting role to an export oriented outward economy. Firms in these countries now faced competition in domestic market with global firms and needed upgrade th eir capabilities to survive. These changes had a profound impact in creating a s econd wave of MNEs from developing countries. Therefore Mathews (2006) argues th at analysis of second wave requires different perspectives that differ from thos e created to account for outward FDI from developed countries, and the first wav e of MNEs from developing countries. Initial analysis of second wave of MNEs rev eals that overseas move of firms in the second wave is a result of the pull facto rs that are drawing firms into global connections unlike push factors that drove fi rms as stand-alone players in the first wave (Mathews, 4

2006). Dunning et al. (1997) suggest that in the case of second wave of MNEs fro m EastAsian countries such as Taiwan and Korea were subsidized by governments wi th government policy interacting with firm strategies. The rise of second wave M NEs from emerging countries is less driven by cost factors per se, but more by a search for markets and technological innovations to compete successfully in the Global economy (Yueng, 2000). The sudden appearance of the second wave of firms and their capacity to create competitive positions to existing incumbents has r aised interesting questions as they are not simply occupying space vacated by in cumbents instead in many cases they are creating new economic space by their org anizational and strategic innovation. Thus the changes in the world economy, spe cifically its globally interlinked character is responsible for driving the new approaches to and patterns of internationalization in firms from peripheral coun tries. Therefore Mathews (2006) suggests that existing theories and framework of internationalization have failed to capture organization and strategic innovati ons adopted by developing country MNEs for new modes of internationalization. In this context the Indian pharmaceutical industry provides an ideal case to inves tigate approaches and motives of second wave MNEs firms from developing countrie s. From the beginning of the 1990s, the Indian government started liberalization by removing restrictions on trade such as regulations on FDI and opened Indian market to overseas firms. As a result of liberalization policy Indian Economy wi tnessed dramatic growth, changes in domestic market and firm activities specific ally in relation to overseas expansion strategies. The cumulative number of over seas project approved during the 1990s is estimated to be 2652, a nearly 11 fold increase from the number of projects permitted during 1975-90 (230) (Pradhan,20 04). The growth of overseas investment is been characterized by significant chan ges in location and sectorial distribution. In the 1990s the majority of investm ents has originated from the service sector and was increasingly developed count ry-oriented with majority ownership in most cases. The most important destinatio n of Indian outward FDI to date is the USA which accounted for 19% of total cumu lative outflows from 1996-2003. In 2005 Indian firms acquire 136 firms overseas with a total value of US $4.3 billion. The Indian pharmaceutical Industry is at the forefront in international expansion compared to other manufacturing sectors in the Indian Economy. The Indian pharmaceutical industry is the thirteenth lar gest in the world in terms of market output; accounting for a market of about US $ 2.5 billion (Ramani, 2002). It is ranked as the most advanced pharmaceutical i ndustry amongst developing countries and is one of Indias best science-based indu stries. Indian firms have been investing abroad for many years but it is only si nce the late-1990s that outward FDI flows have risen considerably. The liberaliz ation of government policies and relaxation of regulations on FDI abroad have he lped Indian firms to expand internationally. In the last decade some Indian phar maceutical firms have successfully internationalized their operations and emerge d as a major producers and suppliers of generic drugs all over the world. In the absence of more systematic longitudinal firm level data this research is based on case study evidence. The findings suggest that Indian pharmaceutical firms ar e accessing advanced markets and acquiring new technology through the process of internationalization. Indian firms augmenting existing skills in production cap abilities and process R&D by acquiring technology focused firms in advance marke ts. The analysis suggests that Indian pharmaceutical firms have adapted to the r ealities of globalization and are finding new niche through the process of inter nationalization. 5

The Indian pharmaceutical industry: Indian pharmaceutical industry is undergoing fast paced changes. The Indian Gene rics market is witnessing rapid growth opening up immense opportunities for firm s. India has one of the fastest growing pharmaceutical markets in the world. The Indian pharmaceutical market is the 15th largest individual market by sales, bu t the 4th by volume of product. This is further triggered by the fact that gener ics worth over $40 billion are going off patent in the coming few years which is close to 15% of the total prescription market of the US. The Indian pharmaceuti cal companies have been doing extremely well in developed markets such as US and Europe, notable among these being Ranbaxy, Dr. Reddys Labs, Wockhardt, Cipla, Ni cholas Piramal and Lupin. The companies have their strategies in place to levera ge opportunities and appropriate values existing in formulations, bulk drugs, ge nerics, Novel Drug Delivery Systems, New Chemical Entities, and Biotechnology et c. The industry ranks fourth globally in terms of volume and in terms of value, it is ranked thirteenth. The industry has thrived so far on reverse engineering skills exploiting the lack of process patent in the country. This has resulted i n the Indian pharmaceutical players offering their products at some of the lowes t prices in the world. The quality of the products is reflected in the fact that India has the highest number of manufacturing plants approved by US FDA, which is next only to that in the US. Multinational companies have traditionally domin ated the industry, which is another trend seeing a reversal. Currently, it is th e Indian companies which are dominating the marketplace with the local players d ominating a number of key therapeutic segments. The market is also very fragment ed with about 30,000 entities and the organized sector consisting of about 300 e ntities. Consolidation is increasing in the industry with many local players bui lding a global outlook and also growing inorganically through mergers and acquis itions. India currently represents just US $6 billion of the $550 billion global pharmaceutical industry; its share is increasing at 10 % a year. The organized sector of Indias pharmaceutical industry consists of 250 to 300 companies, which accounts for 70 % of the market, with the top ten companies representing 30%. Th e Indian pharmaceutical industry has developed wide ranging capabilities in the complex field of drug process Development and production technology. It is well ahead of other developing countries in process R&D capabilities and the range of technologically complex medicines manufactured. The Indian government adopted a new Patents Act in 1970, which laid the foundations of the modern Indian Pharma ceutical industry. It removed product patents for pharmaceuticals, food and agro -chemicals, allowing patents only for production processes. The statutory term f or production processes was shortened to five years from grant or seven years fr om application. The 1970 Patent Act greatly weakened intellectual property prote ction in India, particularly for pharmaceutical innovations. It started the era of reverse engineering where firms developed new products by changing their prod uction processes like Dr. Reddy. Trained manpower, comparative ease of imitation and a strong chemistry base among Indian research institutes supported manufact urers and gave the Indian pharmaceutical industry its current profile. The indus trys exports were worth more than US $ 492.30 in 2005-06 and they have been growi ng at a compound annual rate of 22.7 percent over the last few years (National p harmaceutical policy, 2006). The value of the Indian Pharmaceutical industrys ove rseas acquisition has grown from just US $8 million in 1997 to $116 million in 2 004. Indian firms have acquired over US $1 billion worth of pharmaceutical compa nies overseas in 2005. There are 3 developments which are pushing expansion of t he Indian pharmaceutical industry into overseas markets; 6

 Opportunities opened in the US generic market due to the Hatch-Waxman Act, Incre asing outsourcing by MNC pharmaceutical firms and C. Strengthening of patent law s in the domestic market. D. Implement all these techniques in India for produci ng good medicines. These three developments are creating new challenges and opportunities for India n industry and internationalization is one of route adopted by Indian to succeed in this new environment. The generic opportunity is a result of the passing of the Hutch Waxman Act in the US in 1984. Under this new law, manufacturers of gen eric drugs no longer had to go through a lengthy period of extensive clinical tr ials in order to market a generic drug demonstration of bio-equivalence was suff icient to acquire a patent on a generic drug procedures were established for the resolution of disputes between branded drug manufacturers and generic manufactu rers. Western markets were a lucrative business opportunity and the low cost adv antage enjoyed by Indian firms on account of the cheap availability of scientifi c labor combined with scale economies inherent in the manufacture of bulk chemic als made for big margins. Between 1999 and 2005 drugs worth $ 64 million went of f patent allowing generic companies to take advantage of better business opportu nities. In the generics industry prescription drugs worth $40 billion in the US and $25 billion in Europe are due to loose patent protection by 2007-08. In 2004 the US senate passed the Greater Access to Affordable Medicine Act diluting som e of the proinnovator provisions of 1984 Hatch-Waxman Act, giving a big boost to the generic business in the US. Similarly Europe is emerging as a key market an d a potential growth driver. The size of market in 2006 was US $ 14.2 billion wi th Germany, France, the UK and Italy accounting for more than 50% of market. Gov ernments in Europe are trying to reduce healthcare costs by embracing generic dr ug companies. Liberalization facilitated the ability of Indian firms to exploit this opportunity to market generics drugs to the US and other Western economies. Indian firms are preparing themselves to take a share of this increasing global market. Indian drug manufacturers currently export their products to more than 65 countries worldwide; the US being the largest customer. However Indian firms face some difficult challenges such as non-tariff barriers, decreasing profits i n the generics market, competitive threats from big pharma MNEs and reputation i n western markets. For example, US regulation disqualifies Indian firms from bid ding for government contracts and Indian firms have to submit separate Applicati ons for each state even when firms have FDA approved products and facilities. An other challenge is the reduction in profit margin due to intense competition fro m Chinese and Eastern European manufacturers as well as authorized generics prod uced by main manufacturer. Currently Indian industry is estimated to account for 22% of generics in the world market. Indian firms are aiming to move up the val ue chain by developing capabilities to produce super generics rather than generics generics to branded generics. Furthermore, stronger patent protection under the n ew patent law of 1999 has shut down the avenues for exploitation of generics opp ortunity in domestic market, but promised large rewards to Indian firms that cou ld leverage their reverse engineering capabilities in advanced markets. The stro nger patent law restricts reverse engineering of newly patented molecule, thus a ffecting an important source of growth for Indian firms. Also multinational phar maceutical firms have entered India after 2005 and using the same resource base as Indian firms to compete in the Indian domestic market further increasing pres sure on profit margins of Indian firms. The contract research and manufacturing services (CRAM) market has emerged as huge opportunity for the Indian pharmaceut ical industry. According to Frost and Sullivan (2005), the global outsourcing ma rket is worth$37 billion and growing at almost 11%; 50% of the contract manufact uring market is in North America, 40% in Europe and just 10% in Asia and the res t of the world. Indian firms possess requisite capabilities to cater for the req uirements of outsourcing markets, still India accounts for barely 1.5% of the gl obal CRAM industry. Due to untested patent protection law and lack of data prote ction MNC firms

are reluctant to outsource early stage R&D work to Indian firms. Therefore India n firms are trying to increase their share in the outsourcing market by moving c loser to the market. Geographically the overseas acquisition by Indian pharmaceu tical firms continues to be directed at developed countries specifically the US and Europe. The major acquisitions are in the area of marketing although some co mpanies are investing in building manufacturing and R&D capacities in developed markets. Indian companies have already established manufacturing plants in the U S, Europe, Brazil, Russia and China. The Indian Region demonstrated strong brand building capabilities, with as many as 6 brands (Sporidex, Revital, Mox, Cifran , Volini and Storvas) featuring in the top 100 brands list of the Indian pharmac eutical industry. The Indian region was perceived as the Best-in-class by customer s, as it topped the List of companies both Indian and multinational in terms of corporate Image. (Source: Ac Nielsen, ORG MARG Report, June 2004) INDUSTRY STRUCTURE The Pharmaceutical industry in India is fragmented with over 3,000 small/medium sized generic pharmaceutical manufacturers. It has over 20,000 units out of whic h 300 units are in the organized sector; while others exist in the small scale/u norganised sector. The leading 250 pharmaceutical companies control 70% of the m arket with market leader holding nearly 7% of the market share. There are also 5 Central Public Sector Units that manufacture drugs. These companies are: Indian Drugs & Pharmaceuticals Hindustan Antibiotics Ltd. Bengal Chemical and Pharmace uticals Ltd. Bengal Immunity Ltd. Smith Stanistreet Pharmaceuticals Ltd. The Ind ian pharmaceutical industry consists of manufacturers of bulk drugs and formulat ions. Bulk drugs include the active pharmaceutical ingredients (APIs) which are used for the manufacture of formulations. According to estimates, the proportion of formulations and bulk drugs is in the order of 75:25. There are over 60,000 formulations manufactured in India in more than 60 therapeutic segments. More th an 85% of the formulations produced in the country are sold in the domestic mark et. India is largely self-sufficient in case of formulations, though some lifesa ving, new-generation-technology-barrier formulations continue to be imported. Th e Indian pharmaceutical industry has the highest number of plants approved by th e US Food and Drug Administration outside the US. It also has the large number o f Drug Master Files (DMFs) filed which gives it access to the high growth generi c bulk drugs market. The industry now produces bulk drugs belonging to all major therapeutic groups requiring complicated manufacturing processes and has also d eveloped good manufacturing practices (GMP) compliant facilities for the productio n of different dosage forms. Setting up a plant is 40% cheaper in India compared to developed countries and the cost of bulk drug production is 60-70 percent le ss. The strength of the industry is in developing cost effective technologies in the shortest possible time for drug intermediates and bulk activities without c ompromising on quality. In accordance with WTO stipulations, India grants produc t patent recognition to all New Chemical Entities. 8

TYPES OF DRUG SYSTEM IN INDIA Ancient civilization allowed India to develop various kinds of medical and pharm aceutical systems. In addition to the allopathic system, which is prevalent in t he United States, Japan and Europe, the following types of medical and pharmaceu tical systems are used by the Indian people: Ayurveda translates as the science o f life. It encompasses fundamentals and philosophies about the world and life, di seases and medicines. The knowledge of Ayurveda is compiled in Charak Samhita an d Sushruta Samhita. The curative treatment lies in drugs, diet and general mode of life. Ayurveda: Siddha: The Siddha system is one of the oldest Indian systems of medicine. Siddh a means achievement. Siddhas were saintly figures who achieved healing through the p ractice of yoga. The Siddha system does not look merely at a disease but takes i nto account a patients age, sex, race, habits, environment, diet , physiological constitution and so forth. Siddha medicines have been effective in curing some d iseases, and further work is needed to truly understand why this system works. T he Unani system originated in Greece and progressed to India during the medieval period. It involves promotion of positive health and prevention of disease. The system is based on the humoral theory i.e. the presence of blood, phlegm, yello w bile and black bile. A persons temperament is accordingly expressed as sanguine , phlegmatic, choleric or melancholic. Drugs derived from plant, metal, mineral and animal origins are used in this system. Homeopathy: Homoeopathy is a branch of therapeutics that treats the patient on the principle of SIMILIA SIMILIBUS CUR ENTUR which simply means Let likes be cured by likes. Homeopathy seeks to stimulate the bodys defense mechanisms and processes so as to prevent or treat illness. Treatment involves giving very small doses of substances called remedies that, a ccording to homeopathy, would produce the same or similar symptoms of illness in healthy people if they were given in larger doses. Treatment in homeopathy is i ndividualized (tailored to each person). Homeopathic practitioners select remedi es according to a total picture of the patient, including not only symptoms but lifestyle, emotional and mental states, and other factors. Yoga and Naturopathy: Yoga and Naturopathy are ways of life. In naturopathy one applies simple laws o f nature. It advocates proper attention to eating and living habits. It also inv olves hydrotherapy, mud packs, baths, massage and so forth. Yoga consists of eig ht components: restraint, observance of austerity, physical postures, breathing exercises, restraining of the sense organs, contemplation, meditation and Samadh i. Increasing interest exists in revisiting these ancient drug systems. Unani: INDUSTRY SEGMENTATION Indian pharmaceutical industry can be widely classified into bulk drugs, formula tions and contract research. Bulk drugs are the Indian name for Active Pharmaceu ticals Ingredients (API). Formulations cover both branded products and generics. Indian pharmaceutical sector is self-sufficient in meeting domestic demand and exports successfully to various markets globally. The existence of process paten ts in India till January 2005 fuelled the growth of 9

domestic pharmaceutical companies and developed them in areas like organic synth esis and process engineering, as a result of which, Indian pharmaceuticals secto r is able to meet almost 95 percent of the countrys pharmaceutical needs. India i s globally recognized as a low cost, high quality bulk drugs and formulations ma nufacturer and supplier. Contract Research, a nascent industry in India has witn essed commendable growth in the last few years. As per Yes Bank /OPPI report (20 07-08), formulation segment (including domestic formulation and formulation expo rts) constituted 72%of the total pharmaceutical industry (in terms of sales) whi le bulk drugs and contract research constituted 25% and 3% of pharmaceutical ind ustry respectively. Fig: Segment-wise sales 10

BULK DRUGS Bulk drug industry is the backbone of the Indian pharmaceutical industry. Growth of Indian bulk drug industry in the last five decades has been impressive and h ighest among developing countries. From a mere processing industry, Indian bulk drug industry has evolved into sophisticated industry today, meeting global stan dards in production, technology and quality control. Today, India stands among t he top five producers of bulk drugs in the world. The market is fragmented with far too many players. About 300 organised companies are involved in the producti on of bulk drugs in India. Over 70 percent of Indias bulk drug production is expo rted to more than 50 countries and the balance is sold locally to other formulat ors. Indian bulk drug industry is mainly concentrated in the following regional belts - Mumbai to Ankleshwar, Hyderabad to Madras and Chandigarh. Around, 18000 bulk drug manufacturers exist in India. Some major producers of bulk drugs in In dian pharmaceutical industry are Ranbaxy Laboratories, Sun Pharma, Cadila, Wockh ardt, Aurobindo Pharma, Cipla, Dr. Reddys Laboratories, Orchid Pharmaceuticals & Chemicals, Nicholas Piramal, Lupin, Aristo Pharmaceuticals, etc. Most are involv ed in bulk as well as formulations while a few are solely into bulk drugs. India is the worlds fifth largest producer of bulk drugs. The market size is expected to grow at higher percentages in future years with more and more international c ompanies depending on India to meet their bulk-drug supply needs. Moreover, Indi a is way ahead of competitors in the total number of Drug Master File (DMF) fili ngs. Of the overall DMF filings to US FDA, the portion of filings by Indian play ers has jumped from around 14% in 2000 to 46% of total filings in 2008( JanuaryJune) This growth in proportion speaks volumes about the quality standards follo wed in Indian manufacturing facilities. Fig: Increasing share of Indian companies in DMF filings (US FDA) (SOURCE: CRISI NFAC, YES BANK/ OPPI) The growing number of DMF filings signifies the increase i n number of contracts that Indian players have garnered. While India has recorde d 1671 DMF filings, China shows a tally of 520, the second largest number of DMF filings after India. In 2008 (January-June), Indias DMF filings were around 3.5 times that of China -187 from India vis--vis 51 from China. The bulk drug segment is a low-margin and volume-driven business. The thrust is on manufacturing. In manufacturing operation, efficiency through better process skills to reduce both manufacturing time and cost is critical. Low cost manufacturing is a distinct a dvantage gained by Indian companies over a period of time with a steep learning curve. Bulk Drugs exports have grown significantly in the past on account of gro wth in generic industry, increasing share of Indian companies in DMF filings and contract manufacturing opportunity. 11

Bulk drugs exports grew robustly by 28% CAGR between 2001-02 and 2007-08 to reac h an estimated USD4.2 billion. Fig. Indias Bulk Drug Export (CRISINFAC, YES BANK/ OPPI) As already explained, In dia has carved a niche for itself by being one of the largest bulk drug supplier s. India offers a number of distinctive advantages in the pharmaceutical industr y, as illustrated in the figure below: Fig: Advantage India-API (SOURCE: CRISINFAC, YES BANK/ OPPI) India has many loca l manufacturing equipment manufacturers. These equipments are of high quality an d low cost, thus reducing the cost of capital. According to industry estimates, Indian companies are able to reduce the upfront capital cost of setting up a pro ject by as much as 25-50%due to locally manufactured equipment and high quality technology/engineering skills. Competition in the Indias domestic formulation mar ket has made it inevitable for API suppliers to continuously develop alternative production methods to improve yield or reduce costs. This ensures that India ha s a significant cost advantage due to process engineering. Apart from availabili ty of a high number of skilled chemists, India also offers scientists with vast experience and unmatched skills. The scientific staff in India though equivalent or better qualified are also available at a fraction of the cost. This makes In dian research firms more 12

competitive than many international firms while being cost competitive. Labour c osts are also low in India, being almost 1/7th of that in many developed countri es and offer an obvious cost advantage. FORMULATIONS Formulations are broadly categorized into patented drugs and generic drugs. A pa tented drug is an innovative formulation that is patented for a period of time ( usually 20 years) from the date of its approval. A generic drug is a copy of an expired patented drug that is similar in dosage, safety, strength, method of con sumption, performance and intended use. Formulation Industry can be subdivided i nto two segments: Domestic Formulation Industry Indian Formulation Exports Domestic Formulation Industry Between 2002 and 2007, the domestic formulation industry grew at a CAGR of 14% f rom around USD4.3 billion in 2002 to USD 8.4 billion in 2007. Demand in India is growing markedly due to rising population, increasing per capita income, increa sing access to medicine, especially in the rural areas and an increasing populat ion of over sixty years of age. Fig: Growth in domestic formulation industry (OPPI, ORGIMS) (SOURCE: CRISINFAC, YES BANK/ OPPI Presently, the growth of a domestic pharmaceutical company is cri tically dependant on its therapeutic presence. In terms of end-use, the pharmace utical industry is sub-divided into several therapeutic segments. These segments are broadly defined on the basis of therapeutic application. Some of these segm ents are low-volume, high margin segments, while the others are high-volume with relatively low margins. The new lifestyle categories like Cardiac, Respiratory and Vitamins are expanding at double-digit growing rates. The long term ailment, chronic therapies is now accounting 24% of the market. The only growth driver f or acute therapies is the new product introduction under this segment. Today, an ti-infective which used to be the single largest therapeutic segment in Indian p harmaceutical industry is 13

increasing. Anti-infective segment is now 1st in terms of value contribution fol lowed by Gastrointestinal and Cardiac. The key therapeutic segments include: Ant i-infective Cardio vascular Central nervous system drugs Anti-infective is curre ntly the largest therapeutic segment in India. It accounts for one-fifth of tota l market turnover. Next in line, and accounting for one-tenth each, are cardio-v ascular preparations, cold remedies, pain killers and respiratory solutions. Fig. Therapeutic wise distribution (ORGIMS) (SOURCE: CRISINFAC, YES BANK/ OPPI) INDIAN FORMULATION EXPORTS Indian formulation exports grew at a CAGR of 23.2% touching around USD 4 billion in 200708. The growth has been spurred mainly due to the focus on regulated mar kets by most Indian companies, thereby increasing revenues. Fig: Indian Formulation Exports (SOURCE: CRISINFAC, YES BANK/ OPPI) 14

CONTRACT RESEARCH AND MANUFACTURING: Increasing costs of R&D, coupled with low productivity and poor bottom lines, ha ve forced major pharmaceutical companies worldwide to outsource part of their re search and manufacturing activities to low-cost countries, thereby saving costs and time in the process. The global pharmaceutical outsourcing market was worth USD57.2 billion in 2007. It is expected to grow at a CAGR of 10% to reach USD76 billion by 2010. Global market for Contract Research and Manufacturing Services (CRAMS) in 2007 is estimated to be USD55.48 billion. Out of the total global CRA MS market, contract research was USD16.58 billion, growing at a CAGR of 13.8% an d contract manufacturing was USD38.89 billion accounting for the major share (ap proximately 68%) of the total global pharmaceutical outsourcing market. India, w ith more than 80 US FDA-approved manufacturing facilities, is one of the most pr eferred locations for outsourcing manufacturing services in India by the multina tionals and global pharmaceutical companies. The Indian pharmaceutical outsourci ng market was valued at USD1.27m in 2007 and is expected to reach USD3.33 billio n by 2010, growing at a CAGR of 37.6%. The Indian CRAMS market stood at USD1.21 billion in 2007, and is estimated to reach USD3.16 billion by 2010. India holds the lions share of the worlds contract research business as activity in the ph armaceutical market continues to explode in this region. Over 15 prominent contr act research organisations (CROs) are now operating in India attracted by her ab ility to offer efficient R&D on a low-cost basis. Thirty five per cent of busine ss is in the field of new drug discovery and the rest 65 per cent of business is in the clinical trials arena. India offers a huge cost advantage in the clinica l trials domain compared to Western countries. The cost of hiring a chemist in I ndia is one-fifth of the cost of hiring a chemist in the West. DOMESTIC GROWTH DRIVERS: Pharmaceutical sector is one of the most globalized sectors among the Indian ind ustries. The downside is pharmaceutical sector traditionally has been immune to business cycles. The upside of Indian pharmaceutical sector, however, is influen ced by a mix of global and local factors. Global factors are important as most I ndian companies ship a major portion of their production to overseas markets. Al so, multinationals operating in the Indian market follows the central research a nd global marketing model. Their actions are largely dictated by global trends a lthough local issues are given due importance. The domestic market is critical f or both Indian companies and multinationals. For Indian companies, the domestic market lends stability to bottom line and offer means to cope with fluctuations in global demand. The growth drivers for Indian pharmaceutical market are: Growi ng Population and Improving Incomes: Household incomes are rising in India; the proportion of middleclass in Indian population is also increasing. Statistics sh ow a clear migration of population towards middle and upper classes. Rise in inc ome levels is always accompanied by greater demand for medical facilities and ph armaceutical products. Middle class is already 70 million strong and is expected to grow even fast, accounting for a higher share of total population. Increase in living standards will lead to longer life expectance and higher consumption o f drugs and health care services. Changing lifestyles: Rising incomes and improv ing literacy rates are leading to change in lifestyles. While incomes provide th e means to access medical facilities and products, improving literacy boost awar eness about diseases and lead to higher consumption of drugs. Changing lifestyle s, however, is leading to a change in disease profile especially in urban 15

areas. Hectic lifestyles and high cholesterol diets are resulting growing incide nce of diseases such as cardio vascular diseases and cancer. Research and Develo pment: The R&D efforts of Indian companies have been largely focussed on chemica l synthesis of molecules and their cost effective production thereof. India has a large pool of technical and scientific personnel with good English language sk ills. Indian scientists have developed a high degree of chemical synthesis skill s while engineers have developed competencies in producing molecules cost effect ively. These skills have helped Indian companies tap generic markets abroad succ essfully in the past and will continue to do so. Healthcare Expenditure: Indian healthcare system is largely run by the govt with private sector playing a small , but important part. The healthcare system in India comprises government hospit als in cities and towns and a network of health centres in rural areas. This is supplemented by a string of private hospitals and clinics in largely urban areas . The public expenditure on health has been growing at a decent rate while priva te expenditure has been recording marginal growth. Insurance Sector giving a Lif t: Indian insurance sector has been thrown open to private sector. Large section s of Indian population are not covered by health insurance schemes. Currently, l ess than 10% of the Indian population is covered by some form of health insuranc e. DOMESTIC EXPORTS Pharmaceutical exports touched a level of Rs. 24942 crores during 2006-07. Expor ts constitute a substantial part of the total production of pharmaceuticals in I ndia. YEAR 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 EXPORT (Rs. in Crores) 6256.06 7230.16 8757.47 9751.20 1282 6.10 15213.24 17857.80 22578.98 24942.00 (Source:-Directorate General of Commercial Intelligence and Statistics - DGCIS, Kolkata) The formulations contribute nearly 55% of the total exports and the res t 45% comes from bulk drugs. Pharmaceutical exports clocked $7.2 billion in 2007 -08, accounting for six per cent of the countrys total exports, according to Phar mexcil, the Pharmaceutical Export Promotional Council. 16

CRITICAL SUCCESS FACTORS The rules of pharmaceutical business are changing. Indian pharmaceutical compani es can no longer get away with plundering intellectual properties of multination al companies. Pharmaceutical business has become a new ballgame altogether after the introduction of product patents in January 2005. NEW PRODUCT DEVELOPMENT Pre 2005: New product development efforts of Indian pharmaceutical companies in process patents era were limited to reverse engineering molecules discovered by other companies. Thanks to absence of product patents, Indian companies did not have to go through long winded drug development process. Nor did Indian companie s have to expend any effort on research focus. Indian companies simply zeroed in on blockbuster drugs and tried to come up with an alternative process as fast a s they could. The focus of the Indian companies was to launch a copy of a blockb uster drug ahead of their rivals in India and abroad. Key areas to focus on R&D for Indian companies: Potential product identification Complex API Complex finis hed product Commercial potential of products Out-licensing opportunity to MNCs Novel Drug Delivery System (NDDS) New Drug Development Post 2005: A large number of drugs are going off patent in th e next few years. According to IMH Health, more than $60 billion worth of drugs are going off patent by 2011. Thus, Indian companies will not be short of new prod ucts for at least another two years. In the long run, however Indian companies m ay find it hard to make money from drugs coming off patent. Already competition in generic market is intense and likely to increase further in the future. Hence , new molecules rather than generics will drive revenues and profits in the prod uct patents area. Indian companies need to discover new drugs either through the ir own efforts or research alliances. Perhaps licensing deals with multinational s could also provide Indian companies access to new drugs. Focus on basic resear ch will come with its own issues. Indian companies will have to acquire the skil ls of identifying research areas that offer excellent revenue and profit potenti al. This will entail a closer tracking of disease profiles and related therapies as well as keeping a close tab on the research programmes of rivals. Besides, I ndian companies will have to pay more attention to economics of drug development process. A product patent is granted for a period of 20 years THERAPEUTIC COVERAGE Pre-2005: In the absence of product patents, Indian pharmaceutical companies did not feel the need to focus on specific therapeutic areas. Most Indian pharmaceu tical companies eschewed narrow focus and tried to cover as many therapeutic are as as possible. Now the product portfolio of many Indian companies has considera ble breadth and depth. Given the price controls in the market, diversification w orked to the advantage of companies in the domestic markets. In the export marke ts, a wider product portfolio gave companies the option of picking and choosing from an array of opportunities. 17

Post 2005: Opinion is divided over the therapeutic strategy that Indian companie s should pursue in product patent era. Some companies believe that focus on sele ct therapeutic segment will fetch them greater dividends in terms of new chemica l entities and market share. Other companies believe such a strategy is risky gi ven the size of Indian companies and that a big setback in research could sink t he company. Instead such companies are pursuing a de-risking strategy of buildin g a wide product portfolio. In the domestic market, such a strategy will result in economies of scale at production and marketing stage, putting the company in a better place to weather competition from multinationals. In the export markets even after the introduction of product patents, products under patent protectio n will comprise only 15 percent of the market. So a vast chunk of the market wil l be still open for competition although margins will be wafer thin. EXPORTS Pre-2005: Most Indian companies focused on exports. Exports improve the valuatio n of companies owing to higher margin in overseas markets. Indian companies buil t fortunes by making cheaper versions of blockbuster drugs and selling them in d omestic and export markets. Indian companies built especially strong position in manufacture of bulk drugs. Out of the total exports, formulations constituted 5 5 percent and bulk drugs constituted 45 percent. Success in export market allowe d some Indian companies to build a strong position in the domestic market organi cally and through acquisitions of brands and companies. Post 2005: Exports has c ontinued to be a priority for Indian companies. Major blockbuster drugs will com e off patent in the near future, creating a big generic opportunity for Indian c ompanies. Also, a growing demand for anti-AIDS drugs in Africa will keep Indian companies busy. Exports have and will continue to provide Indian companies with the strength to withstand the onslaught of multinationals in the domestic market . LOW COST PRODUCTION THROUGH SCALE Pre-2005: Indian pharmaceutical companies have mastered the science of producing drugs cheaply. Thanks to benign patents regime, Indian companies have developed a high level of chemical synthesis skills. The absence of development costs tog ether with efficient production has enabled Indian companies to establish a soli d position in bulk drug manufacturing. But scale did not receive as much importa nce as it should have, because the cost of Indian pharmaceutical companies was a lready low owing to aforesaid reasons. Many Indian companies did not find the re turn on investment of world class plants compelling enough. Post 2005: By 2011, drugs worth $60 billion will come off patent, presenting a huge generic opportun ity to Indian companies. But the competition in the generic market will be bruta l, resulting in thin margins. The cost of production will hold the key to succes s in the generic market. The production cost in turn depends on scale. Indian ph armaceutical companies need to build global scale to stand a chance in the gener ics market. BOOMING SALES: India is gaining in importance as a manufacturer of pharmaceuticals. Between 199 6 and 2006, nominal sales of pharmaceuticals were up 9% per annum and thus expan ded much faster than the global pharmaceutical market as a whole (+7% p.a.). Dem and in India is growing markedly due to rising population figures, the increasin g number of old people and the development of incomes. As a production location, the country is benefiting from its wage cost advantages over western competitor s also when it comes to producing medicines. 18

STRONG GROWTH CONTINUES: Up until 2015, we expect pharmaceutical sales to rise by 8% p.a. to just under E UR 20 bn, compared with an increase of 6% in the world as a whole and 5% in Germ any. But even then, Indias share in the world pharmaceutical market would only co me to slightly over 2% (Germany: 7%). In Asia, India looks set to lose market sh are, as other Asian countries are registering even stronger growth. INDIAS PHARMACEUTICAL INDUSTRY IN THE SPOTLIGHT: In 2001, Indias pharmaceutical industry became the focus of public debate when Ci pla, the countrys second-largest pharmaceuticals company, offered an AIDS drug to African countries for the price of USD 300, while the same preparation cost U SD 12,000 in the US. This was possible because the Indian company produced an al l-inone generic pill which contains all three substances required in the treatme nt of AIDS. This kind of production is much more difficult in other countries as the patents are held by three different companies. In the final analysis, the p rice slump was a result of Indias lax patent legislation. In 2005, patent legis lation was tightened, so Indias pharmaceutical sector had to adjust. 19

PHARMACEUTICAL REGULATORY BODIES IN INDIA National Pharmaceutical Pricing Authority (NPPA)NPPA is an organization of the G overnment of India which was established, to fix/ revise the prices of controlle d bulk drugs and formulations and to enforce prices and availability of the medi cines in the country, under the Drugs (Prices Control) Order, 1995. The organiza tion is also entrusted with the task of recovering amounts overcharged by manufa cturers for the controlled drugs from the consumers. It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels. Central Drugs Standard and Control Organization (CDSCO) CDSCO lays down standards and regulat ory measures of drugs, cosmetics, diagnostics and devices in the country. It reg ulates clinical trials and market authorization of new drugs. It also publishes the Indian Pharmacopeia. The main functions of the Central Drug Standard Control Organization (CDSCO) include control of the quality of drugs imported into the country, co-ordination of the activities of the State/UT drug control authoritie s, approval of new drugs proposed to be imported or manufactured in the country, laying down of regulatory measures and standards of drugs and acting as the Cen tral Licensing Approving Authority in respect of whole human blood, blood produc ts, large volume parenterals , sera and vaccines. The CDSCO functions from 4 zon al offices, 3 sub-zonal offices besides 7 port offices. The four Central Drug La boratories carry out tests of samples of specific classes of drugs. Department o f Chemicals & Petrochemicals (DCP) DCP is responsible for the policy, planning, development, and regulation of the chemical, petrochemical, and pharmaceutical i ndustries in India. This department aims: To provide impartial and prompt servic es to the public in matters relating to chemical, pharmaceutical and petrochemic al industries; To take steps to speedily redressal of grievances received; To fo rmulate policies and initiate consultations with Industry associations and to am end them whenever required. 20

Indian Pharma: Qualitative analysis PORTER FIVE FORCES MODEL: Todays business environment is extremely competitive and in economics parlance where perfect competition exists, the profits of the firms operating in that ind ustry will become zero. However, this is not possible because, firstly no compan y is a price taker (i.e. no company will operate where profits are zero). Second ly, they strive to create a competitive advantage to thrive in the competitive s cenario. Michael Porter, considered to be one of the foremost gurus of manageme nt, developed the famous five-force model, which influences an industry. (a) INDUSTRY COMPETITION Pharmaceutical industry is one of the most competitive industries in the country with as many as 10,000 different players fighting for the same pie. The rivalry in the industry can be gauged from the fact that the t op player in the country has only 6 %( 2006) market share, and the top 5 players together have about 18 %( 2006) market share. Thus, the concentration ratio for this industry is very low. High growth prospects make it attractive for new pla yers to enter in the industry. Another major factor that adds to the industry ri valry is the fact that the entry barriers to pharmaceutical industry are very lo w. The fixed cost requirement is low but the need for working capital is high. T he fixed asset turnover, which is one of the gauges of fixed cost requirements, tells us that in bigger companies this ratio is in the range of 3.5-4 times. For smaller companies, it would be even higher. Many small players that are focused on a particular region have a better hang of the distribution channel, making i t easier to succeed, albeit in a limited way. 21

An important fact is that, pharmaceutical is a stable market and its growth rate generally tracks the economic growth of the country with some multiple (1.2 tim es average in India). Though volume growth has been consistent over a period of time value growth has not followed in tandem. The product differentiation is one key factor which gives competitive advantage to the firms in any industry. Howe ver, in pharmaceutical industry product differentiation is not possible since In dia has followed process patents till date, with loss favoring imitators. Conseq uently product differentiation is not a driver, cost competitiveness is. However , companies like Pfizer and Glaxo have created big brands over the years which a ct as product differentiation tools. Earlier it was easy for Indian pharmaceutic al companies to imitate pharmaceutical products discovered by MNCs at a lower co st and make good profit. But today the scene is different with the arrival of th e patent regime which has forced Indian companies to rethink its strategies and to invest more on R&D. Also contract research has assumed more importance now. ( b) BARGAINING POWER OF BUYERS The unique feature of pharmaceutical industry is t hat the end user of the product is different from the influencer (read doctor). The consumer has no choice but to buy what doctor says. However, when we look at the buyers power, we look at the influence they have on the prices of the produc t. In pharmaceutical industry, the buyers are scattered and they as such do not wield much power in the pricing of the products. However, govt with its policies , plays an important role in regulating pricing through the NPPA (national pharm aceutical pricing authority). (c) BARGAINING POWER OF SUPPLIERS The pharmaceutic al industry depends upon several organic chemicals. The chemical industry is aga in very competitive and fragmented. The chemicals used in the pharmaceutical ind ustry are largely a commodity. The suppliers have very low bargaining power and the companies in the pharmaceutical industry can switch from their suppliers wit hout incurring a very high cost. However, what can happen is that the supplier c an go for forward integration to become a pharmaceutical company. Companies like Orchid Chemicals and Sashun Chemicals were basically chemical companies who tur ned themselves into pharmaceutical companies. (d) BARRIERS TO ENTRY Pharmaceutic al industry is one of the most easily accessible industries for an entrepreneur in India. The capital requirement for the industry is very low; creating a regio nal distribution network is easy, since the point of sales is restricted in this industry in India. However, creating brand awareness and franchisee among docto rs is the key for long term survival. Also, quality regulations by the governmen t may put some hindrance for establishing new manufacturing operations. The new patent regime has raised the barriers to entry. But it is unlikely to discourage new entrants, as market for generics will be as huge. (e)THREAT OF SUBSTITUTES This is one of the great advantages of the pharmaceutical industry. Whatever hap pens, demand for pharmaceutical products continues and the industry thrives. One of the key reasons for high competitiveness in the industry is that as an ongoi ng concern, pharmaceutical industry seems to have an infinite future. However, i n recent times the 22

advances made in the field of biotechnology, can prove to be a threat to the syn thetic pharmaceutical industry. SWOT ANALYSIS - INDIAN PHARMACEUTICAL INDUSTRY The SWOT analysis of the industry reveals the position of the Indian pharmaceuti cal industry in respect to its internal and external environment. STRENGTHS1. In dia with a population of over a billion is a largely untapped market. In fact th e penetration of modern medicine is less than 30% in India. To put things in per spective, per capita expenditure on health care in India is US$ 93 while the sam e for countries like Brazil is US$ 453 and Malaysia US$189. 2. The growth of mid dle class in the country has resulted in fast changing lifestyles in urban and t o some extent rural centres. This opens a huge market for lifestyle drugs, which has a very low contribution in the Indian markets. 3. Indian manufacturers are one of the lowest cost producers of drugs in the world. With a scalable labour f orce, Indian manufactures can produce drugs at 40% to 50% of the cost to the res t of the world. In some cases, this cost is as low as 90%. 4. The fact that desp ite the low level of unit labour costs India boasts a highly skilled workforce h as enabled the countrys pharmaceutical industry at a relatively early stage to offer quality products at competitive prices. Each year, roughly 115,000 chemist s graduate from Indian universities with a masters degree and roughly 12,000 with a PhD.4 The corresponding figures for Germany just fewer than 3,000 and 1,500, respectively are considerably lower. After many chemists from India migrated to foreign countries over the last few years, they now consider their chances of em ployment in India to have improved. As a result, a smaller number is expected to go abroad in the coming years; some may even return. 5. Indian pharmaceutical i ndustry possesses excellent chemistry and process reengineering skills. This add s to the competitive advantage of the Indian companies. The strength in chemistr y skill helps Indian companies to develop processes, which are cost effective. W EAKNESSThe Indian pharmaceutical companies are marred by the price regulation. O ver a period of time, this regulation has reduced the pricing ability of compani es. The NPPA (National Pharmaceutical Pricing Authority), which is the authority to decide the various pricing parameters, sets prices of different drugs, which leads to lower profitability for the companies. The companies, which are lowest cost producers, are at advantage while those who cannot produce have either to stop production or bear losses. Indian pharmaceutical sector has been marred by lack of product patent, which prevents global pharmaceutical companies to introd uce new drugs in the country and discourages innovation and drug discovery. But this has provided an upper hand to the Indian pharma companies. Indian pharma ma rket is one of the least penetrated in the world. However, growth has been slow to come by. As a result, Indian majors are relying on exports for growth. To put things in to perspective, India accounts for almost 16% of the world population while the total size of industry is just 1% of the global pharma industry. Due to very low barriers to entry, Indian pharma industry is highly fragmented with about 300 large manufacturing units and about 18,000 small units spread across t he country. This makes Indian pharma market increasingly competitive. The indust ry witnesses price 23

competition, which reduces the growth of the industry in value term. To put thin gs in perspective, in the year 2003, the industry actually grew by 10.4% but due to price competition, the growth in value terms was 8.2% (prices actually decli ned by 2.2%) OPPORTUNITIESThe migration into a product patent based regime is li kely to transform industry fortunes in the long term. The new patent product reg ime will bring with it new innovative drugs. This will increase the profitabilit y of MNC pharma companies and will force domestic pharma companies to focus more on R&D. This migration could result in consolidation as well. Very small player s may not be able to cope up with the challenging environment and may succumb to giants. Large number of drugs going off-patent in Europe and in the US between 2005 to 2009 offers a big opportunity for the Indian companies to capture this m arket. Since generic drugs are commodities by nature, Indian producers have the competitive advantage, as they are the lowest cost producers of drugs in the wor ld. Opening up of health insurance sector and the expected growth in per capita income are key growth drivers from a long-term perspective. This leads to the ex pansion of healthcare industry of which pharma industry is an integral part. Bei ng the lowest cost producer combined with FDA approved plants; Indian companies can become a global outsourcing hub for pharmaceutical products. THREATSThere ar e certain concerns over the patent regime regarding its current structure. It mi ght be possible that the new government may change certain provisions of the pat ent act formulated by the preceding government. Threats from other low cost coun tries like China and Israel exist. However, on the quality front, India is bette r placed relative to China. So, differentiation in the contract manufacturing si de may wane. The short-term threat for the pharma industry is the uncertainty re garding the implementation of VAT. Though this is likely to have a negative impa ct in the short-term, the implications over the long-term are positive for the i ndustry. 24

Pharma Marketing and Its Challenges Marketing in Pharmaceutical industry is totally different from other industries like FMCG. Industrial goods etc. because of following reasons:The pharmaceutical product does not reach directly as the patients consume only those brands which are being prescribed by the doctor so as we know companies cant sell directly to patients i.e the end users of the products is away from companies. So there cant be concept of direct seeking in the pharma market. So it is doctor who is the c ustomer for companies. Pharma marketing is also different as the product is tech nical in nature as compared to any consumer product. The product has to undergo various clinical trails, medical test, before it is introduced in the market. St rategies are followed by pharmaceutical companies: Personal Selling Symposium Sam ple Gifts Promotional Literature Conferences Direct Mailing Pharmaceutical marke ting is the business of advertising or otherwise promoting the sale of pharmaceu ticals or drugs. Mass marketing of prescription medications was rare until recen tly, however. It was long believed that since doctors made the selection of drug s, mass marketing was a waste of resources; specific ads targeting the medical p rofession were thought to be cheaper and just as effective. This would involve a ds in professional journals and visits by sales staff to doctors offices and hosp itals. An important part of these efforts was marketing to medical students. The marketing of medication has a long history. The sale of miracle cures, many wit h little real potency, has always been common. Marketing of legitimate nonprescr iption medications, such as pain relievers or allergy medicine, has also long be en practiced. Mass marketing of prescription medications was rare until recently , however. It was long believed that since doctors made the selection of drugs, mass marketing was a waste of resources; specific ads targeting the medical prof ession were thought to be cheaper and just as effective. This would involve ads in professional journals and visits by sales staff to doctors offices and hospita ls. An important part of these efforts was marketing to medical students. Direct and indirect marketing to health care providers Physicians are perhaps the most important component in pharmaceutical sales. They write the prescriptions that determine which drugs will be used by the patient. Influencing the physician is the key to pharmaceutical sales. Historically, this was done by a large pharmace utical sales force. A medium-sized pharmaceutical company might have a sales for ce of 1000 representatives. The largest companies have tens of thousands of repr esentatives around the world. Sales representatives called upon physicians regul arly, providing information and free drug samples to the physicians. 25

This is still the approach today; however, economic pressures on the industry ar e causing pharmaceutical companies to rethink the traditional sales process to p hysicians. More recently, the Partners Healthcare, Massachusetts largest hospit al and physician network, will adopt new guidelines prohibiting physicians and r esearchers from accepting gifts from pharmaceutical manufacturers. This will inc lude meals or individual drug samples, and also drug samples left by companies w ill be distributed through a centralized system, while educational programs and fellowships will also be required to be centrally reviewed and approved. Pharmac eutical companies are developing processes to influence the people who influence the physicians. There are several channels by which a physician may be influenc ed, including self-influence through research, peer influence, direct interactio n with pharmaceutical companies, patients, and public or private insurance compa nies. There are also web based instruments that can be used to determine the inf luencers and buying motives of physicians. There are a number of firms that spec ialize in data and analytics for pharmaceutical marketing. Individual research P hysicians discover pharmaceutical information from such sources as the Physician s Desk Reference and online sources such as PDR.net, as well as via PDAs with a pplications. They also rely upon pharmaceutical-branded e-detailing sites, pharm aceutical sales and non-sales representatives, and scholarly literature. Scholar ly literature can be in the form of medical journal article reprints, often deli vered by sales representatives at their place of employment or at conference exh ibitions. Peer influence Key opinion leaders Key opinion leaders (KOL), or "thou ght leaders", are respected individuals, such as prominent medical school facult y, who influence physicians through their professional status. Pharmaceutical co mpanies generally engage key opinion leaders early in the drug development proce ss to provide advocacy and key marketing feedback.Some pharmaceutical companies identify key opinion leaders through direct inquiry of physicians (primary resea rch). Colleagues Physicians acquire information through informal contacts with t heir colleagues, including social events, professional affiliations, common hosp ital affiliations, and common medical school affiliations. Some pharmaceutical c ompanies identify influential colleagues through commercially available prescrip tion writing and patient level data.Doctor dinner meetings are an effective way for physicians to acquire educational information from respected peers. These me etings are sponsored by some pharmaceutical companies. Direct physician contact with pharmaceutical sales representatives A pharmaceutical representative will o ften try to see a given physician every few weeks. Representatives often have a call list of about 200 physicians with 120 targets that should be visited in 1-2 week cycles. Because of the large size of the pharmaceutical sales force, the o rganization, management, and measurement of effectiveness of the sales force are significant business challenges. Management tasks are usually broken down into the areas of physician targeting, sales force size and structure, sales force op timization, call planning, and sales forces effectiveness. 26

A few pharmaceutical companies have realized that training sales representatives on high science alone is not enough, especially when most products are similar in quality. Thus, training sales representatives on relationship selling techniq ues in addition to medical science and product knowledge, can make a difference in sales force effectiveness. Specialist physicians are relying more and more on specialty sales reps for product information, because they are more knowledgeab le than primary care reps. Physician targeting Marketers attempt to identify the universe of physicians most likely to prescribe a given drug. Historically, thi s was done by measuring the number of total prescriptions (TRx) and new prescrip tions (NRx) per week that each physician writes. This information is collected b y commercial vendors. The physicians are then "deciled" into ten groups based on their writing patterns. Higher deciles are more aggressively targeted. Some pha rmaceutical companies use additional information such as: profitability of a pre scription (script),accessibility of the physician, tendency of the physician to use the pharmaceutical companys drugs, effect of managed care formularies on th e ability of the physician to prescribe a drug, the adoption sequence of the phy sician (that is, how readily the physician adopts new drugs in place of older, e stablished treatments), and the tendency of the physician to use a wide palette of drugs Data for drugs prescribed in a hospital are not usually available at th e physician level. Advanced analytic techniques are used to value physicians in a hospital setting Opinion Leader Influence Mapping Alternatives to segmenting p hysicians purely on the basis of prescribing do exist, and marketers can call up on strategic partners who specialize in delineating which characteristics of tru e opinion leadership, a physician does or does not possess. Such analyses can he lp guide marketers in how to optimize KOL engagements as bona fide advisors to a brand, and can help shape clinical development and clinical data publication pl ans for instance, ultimately advancing patient care. Sales force size and struct ure Marketers must decide on the appropriate size of a sales force needed to sel l a particular portfolio of drugs to the target universe. Design the optimal rea ch (how many physicians to see) and frequency (how often to see them) for each i ndividual physician. Decide how many sales representatives to devote to office a nd group practice and how many to devote to hospital accounts. Additionally, cus tomers are broken down into different classes, each class is differentiated by t heir prescription behaviour and of course, their business potential. Direct mark eting to patients Recent years have seen an increase in mass media advertisement s for pharmaceuticals. Expenditures on direct-to-consumer (DTC pharmaceutical ad vertising) have more than quintupled in the last seven years since the FDA chang ed the guidelines. While many pharmaceutical companies have successfully deploye d a plethora of strategies to target the various customer types, recent business and customer trends are creating new challenges and opportunities for increasin g profitability. In the pharmaceutical and healthcare industries, a complex web of decision-makers determines the nature of the 27

transaction (prescription) for which direct customer (doctor) of pharma industry is responsible. Essentially, the end-user (patient) consumes a product and pays the cost. From organizational perspective the most prominent performance relate d issues are Increased competition and unethical practices adopted by some of th e propaganda base companies. Low level of customer knowledge (Doctors, , Wholesalers). Poor customer (both external & internal) acquisition, developmen t and retention strategies Varying customer perception. The number and the quali ty of medical representatives Very high territory development costs. High traini ng and re-training costs of sales personnel. Very high attrition rate of the sal es personnel. Busy doctors giving less time for sales calls. Poor territory know ledge in terms of business value at medical representative level . Unknown value of revenue from each retailer in the territory Absence of ideal mechanism of sa les forecasting from field sales level, leading to huge deviations PATENTS Patents are a vital aspect of the global pharma industry. Patent protect ion is essential to spur basic R&D and make it commercially viable. But, only th e developed nations endorse product patents. Most third world countries have pat ent laws but enforcement is totally lax. NEW DRUG APPROVAL (NDA) Prior to launch ing its products in any country, a pharma company undertakes patent registration to protect its own interests. To protect the interests of the consumers, it is necessary that the product be approved by the drug authorities in that country. Mostly the process for seeking approval is initiated alongside the patent regist ration process. WTO Due to pressure from the developed countries, across the wor ld uniformity in patent laws is being implemented under WTO (World Trade Organiz ation - earlier GATT i.e. General Agreement on Tariffs & Trade). Presently, diff erent countries have different patent types and life period. WTO has decided upo n a product patent life of 20 years in all countries. RESEARCH & DEVELOPMENT (R& D) The pharmaceutical industry is characterized by heavy R&D expenditure. It is only the large pharmaceutical companies who can allocate significant resources f or R&D to introduce new products. As the products are an outcome of significant R&D expenditures incurred by these companies, they have their products patented. The patent allows the companies concerned to wield immense pricing power for th eir new products. 28

THE COMPETITION The level of competition on day to day basis in very high in Acu te segment however the degree of competition in not as much as high in Chronic t herapy area. As doctor has to prescribe drug for a long time in chronic cases an d patient is supposed to consume it without any change of brand. While in acute cases doctor is changing brands on day to day basis. In acute area however there is a large competition from local and propaganda companies. Sales Promotion Activity through Medical Representatives JOB DESCRIPTION Medical sales representatives are a key link between medical and pharmaceutical companies and healthcare professionals. They work strategically to increase the awareness and use of a companys pharmaceutical and medical produc ts in settings such as general practices, primary care trusts and hospitals. Bas ed in a specific geographical location, and usually specializing in a particular product or medical area, medical sales representatives try to ensure clients ar e aware of, buy and subsequently use their companys products. They may also mak e presentations and organize group events for healthcare professionals, as well as working with contacts on a one-to-one basis. TYPICAL WORK ACTIVITIES In parti cular, typical work activities include: Arranging appointments with doctors, pha rmacists and hospital medical teams, which may include pre-arranged appointments or regular cold calling; Making presentations to doctors, practice staff and nurses in GP surgeries, hospital doctors, and pharmacists in the retail sector. Presentations may take place in medical settings during the day or may be conduc ted in the evenings at a local hotel or conference venue; organizing conferences for doctors and other medical staff; building and maintaining positive working relationships with medical staff and supporting administration staff e.g. recept ionists; managing budgets (for catering, outside speakers, conferences, hospital ity, etc); keeping detailed records of all contacts and reaching (and if possibl e exceeding) annual sales targets; Planning work schedules and weekly and monthl y timetables. This may involve working with the area sales team or discussing fu ture targets with the area sales manager. Generally, medical sales executives ha ve their own regional area of responsibility and plan how and when to target hea lth professions; regularly attending company meetings, technical data presentati ons and briefings; keeping up with the latest clinical data supplied by the comp any and interpreting, presenting and discussing this data with health profession als during presentations; 29

 monitoring competitor activity and competitors products; developing strategies for increasing opportunities to meet and talk to contacts in the medical and hea lthcare sector staying informed about the activities of health services in a par ticular area; Working with team managers to plan how to approach contacts and cr eating effective business plans for making sales in a particular area. Distribution: For distribution of the product, mainly pull strategy is practiced. The product is sold directly to the customer only by the medical stores only with doctors pre scription. For distribution: the customer comes to the medical store and asks ab out the medicine, the medical store owner inquires to the stockiest situated nea r to their medical store by direct contact or by the phone and the stockiest con tacts to the dealer of the company or to the godown of the company where the sto cks are delivered from ware houses in the respective regions and at there the st ocks are delivered directly from the production units. In this distribution netw ork, cost of the distribution is on company up to the stock reaches to the stock iest and while in the case of the product reaching from stockiest to the various medical stores charges do mostly the medical stores pay. 30

sold by Pfizer under the trade name Lipitor, is a member of the drug class known as statins, used for lowering blood cholesterol. It also stabilizes plaque and prevents strokes through anti-inflammatory and other mechanisms. Like all statin s, an enzyme found in liver tissue that plays a key role in production of choles terol in the body. Atorvastatin was first synthesized in 1985 by Bruce Roth whil e working at Parke-Davis Warner-Lambert Company (now Pfizer). With 2008 sales of US$12.4 billion, Lipitor was the top-selling branded pharmaceutical in the worl d. MOLECULE USED IN SERVEY ATORVASTATIN, Atorvastatin is a drug used for lowering cholesterol and thereby preventing card iovascular disease. Inhibition of cholesterol synthesis Decrease production of V LDL Hepatocytes are able to remove more LDLs from the blood Inhibits hepatic HMG CoA reductase Decrease plaque cholesterol content Decrease inflammation at the plaque site Improve abnormal endothelial function Enhance the ability of blood v essels to dilate Decrease risk of thrombosis Mechanism of action As with other statins, atorvastatin is a competitive inhibitor of HMG-CoA reduct ase. Unlike most others, however, it is a completely synthetic compound. HMG-CoA reductase catalyzes the reduction of 3-hydroxy-3-methylglutaryl-coenzyme A (HMG -CoA) to mevalonate, which is the rate-limiting step in hepatic cholesterol bios ynthesis. Inhibition of the enzyme decreases de novo cholesterol synthesis, incr easing expression of low-density lipoprotein receptors (LDL receptors) on hepato cytes. This increases LDL uptake by the hepatocytes, decreasing the amount of LD L-cholesterol in the blood. Like other statins, atorvastatin also reduces blood levels of triglycerides and slightly increases levels of HDL-cholesterol. In cli nical trials, drugs that block cholesterol uptake like ezetimibe combine with an d complement those that block biosynthesis like atorvastatin or simvastatin in l owering cholesterol or targeting levels of LDL. Why is this medication prescribe d? Atorvastatin is used along with diet, exercise, and weight-loss to reduce the risk of heart attack and stroke and to decrease the chance that heart surgery w ill be needed in people who have heart disease or who are at risk of developing heart disease. Atorvastatin is also used to decrease the amount of cholesterol ( a fat-like substance) and other fatty substances in the blood. This will decreas e the risk of stroke, heart attack, and other heart diseases because when there are high levels of cholesterol and other fats in the blood, these substances may build up along the walls of the blood vessels and decrease or block blood flow to the heart. Atorvastatin is in a class of medications called HMG-CoA reductase inhibitors (statins). It works by slowing the production of cholesterol in the body. What special dietary instructions should I follow? Eat a low-cholesterol, low-fat diet, which includes cottage cheese, fat-free milk, fish, vegetables, po ultry, and egg whites. Use monounsaturated oils such as olive, peanut, and canol a oils or polyunsaturated oils such as corn, safflower, soy, sunflower, cottonse ed, and 31

soybean oils. Avoid foods with excess fat in them such as meat (especially liver and fatty meat), egg yolks, whole milk, cream, butter, shortening, pastries, ca kes, cookies, gravy, peanut butter, chocolate, olives, potato chips, coconut, ch eese (other than cottage cheese), coconut oil, palm oil, and fried foods. Avoid drinking large amounts (more than about 1 quart, 1 liter every day) of grapefrui t juice while taking atorvastatin. What side effects can this medication cause? Atorvastatin may cause side effects. diarrhea constipation gas headache joint pa in Some side effects can be serious. The following symptoms are uncommon: muscle pain, tenderness, or weakness lack of energy fever chest pain nausea extreme ti redness unusual bleeding or bruising loss of appetite pain in the upper right pa rt of the stomach flu-like symptoms yellowing of the skin or eyes rash hives itc hing difficulty breathing or swallowing swelling of the face, throat, tongue, li ps, eyes, hands, feet, ankles, or lower legs hoarseness Atorvastatin may cause o ther side effects. Call your doctor if you have any unusual problems while takin g this medication. What storage conditions are needed for this medicine? Keep th is medication in the container it came in, tightly closed, and out of reach of c hildren. Store it at room temperature and away from excess heat and moisture (no t in the bathroom). Throw away any medication that is outdated or no longer need ed. Talk to your pharmacist about the proper disposal of your medication. 32

RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. It m ay be understood as a science of studying how research is done scientifically. I n it I study the various steps that are generally adopted by a researcher in stu dying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research methods or techniques but also the methodology. RESEARCH DESIGN The following research is Descriptive Research whi ch is based on facts and figures. This project is done according to the descripti ve research design. Design maybe broadly classified into: - Exploratory research - Conclusive research Conclusive research is typically more formal and structure d than exploratory research. It is based on large representative samples and tha t data obtained are subjected to a quantitative analysis. The findings from this research are considered to be conclusive in nature in that they are used as inp ut into marginal decision making. As the name implies, major objective of descrip tive research is to describe something usually market characteristics and time. D escriptive research is pre planned and structured. It is typically performed on large representative samples. A descriptive design requires a clear specificatio n of the who, what, when, where, why and way (the Ws of research). Descriptive res earch assumes that the research has much prior knowledge about the problem solut ion. SAMPLING DESIGN: Type of research: Exploratory Study by a questionnaire sur vey. (Chemist) Sample Unit: chemist Sampling type: Stratified Random Sampling Sa mple size: 100 (chemist /retailer) In this project non-probability sampling is b eing used. The methods being used is convenience sampling. Since I have not been given a list of particular chemists that must be targeted therefore, I am able to target anyone that fits into my different sample populations. DATA COLLECTION METHOD: Mainly Primary data was used in my research and a bit of secondary data for understanding the background of my research. Primary Data: Two types of pri mary data, i.e. Questionnaire method and Interview method was used in the survey . Primary data are generally information gathered or generated by the researcher for the purpose of the project immediately at hand. These methods are used with customers to acquire the real information, which is current and effective, and it helps a lot in the planning and selling. Secondary Data: Data, documents, rec ords, or specimens that have been collected, are in existence prior to the begin ning of the study. It had information about our product and its terms and also d etails about the other competitor companies of our product existing in the 33

same market. This information was extracted from facts and figures already there , from magazines, internet, Newspaper & journals etc. DATA ANALYSIS TECHNIQUE: T he data were analyzed through simple cross tabulation and unvaried techniques. V isual displays of the data were done through pie charts and histograms Analysis has been done through the following steps. - Preparing and organizing the raw da ta. - Summarizing the data contained in the categories. - Determining whether si gnificant differences exist between categories. - Explaining why difference exis ts. - Making recommendations. In the present study data was stored and tabulated in absolute numbers as well as percentages and presented in bivariate and multi variate data to obtain more meaningful conclusions. RESEARCH LIMITATIONS: Though every effort was put in to make this report authentic in every respect, there w ere few uncontrollable factors that might have had their influence on the final report. The various limiting factors are-: The study was mainly conducted in Nor th Delhi. So, the sample size taken for the analysis may not represent the whole population. The retailer some often does not provide actual information require d for the project work. Most of the Questionnaire is poorly filled. The data cou ld be gathered from secondary source thus any error in the information would hav e also got replicated in this report. As the data was gathered from the secondar y sources, the validity of the data could not be tested. Time constraint was the major limitation faced by the researcher. However, every effort is made to ensu re that these do not in any way adversely affect the results of the study and in ject an element of objecting in the report. 34

ANALYSIS: After meeting the chemists, interviewing them, collecting the data and studying the project in depth following conclusions about the amoxicillin propensity has been made: 1. Type of the business deal in: Retail Wholesale Both Objective: to know the type of business in which the respondent deals, because a ccording to the demand of the survey, the respondent must be dealing either with retail pharmacy or retail + wholesale both only. Their responses are shown in t he following graph along with the table. 16 84 retail wholesale both G1: type of business 2. Which pharmaceutical company comes first at top in your mind in terms of CV drug? Ranbaxy Lupin Cipla Dr. Reddy Objective: - This question was asked with the objective to know which company le ads in the market in terms of sales of cardiovascular drug. 35

pharma company 60 50 40 30 20 10 0 ranbaxy dr reddy lupin cipla G2: pharma company in cardiovascular segment 3. Why do you think this company is leading at the moment? Price Margin Quality Availability Object: To know chemist perception towards drug company. Series 1 80 70 60 50 40 30 20 10 0 price quality margin availability Series 1 G3: chemist perception towards drug company 4. Which statin molecules are mostly prescribed by the Doctors? Atorvastatin Simvastatin Rosuvastatin Others Object: to know which statin is most frequently sold in the market. 36

Rxs statin molecule others 15% Simvastatin 9% Atorvastatin 44% Rosuvastatin 32% G4: type of which statin mostly sold in the market 5. In Delhi which are the mos t selling Atorvastatin? STORVAS ATOCOR TONACT OTHERS . Object: to know which atorvastatin brand is most frequently sold in the market ATORVASTATIN BRAND 40 35 30 25 20 15 10 5 0 STORVAS TONACT ATOCOR OTHERS 13 28 22 ATORVASTATIN BRAN D 37 G5: Atorvastatin brand mostly sold in the market 37

6. Which Composition (mg) of Atorvastatin is mostly selling? 5 20 10 40 Object: to know which atorvastatin composition is most frequently sold in the ma rket COMPOSITION OF ATORVASTATIN 40 MG 8% 20 MG 13% 5 MG 24% 10 MG 55% G6: types of Atorvastatin composition 7. Which combination of Atorvastatin salt is most frequently sold in the market? Atorvastatin Atorvastatin + Ezetimibe Ato rvastatin + Finofibrate others Object: to know which atorvastatin composition is most frequently sold in the ma rket 38

COMPOSITION OF SALT 70 60 50 40 30 20 10 0 COMPOSITION OF SALT G7: types of Atorvastatin combination 8. How many strips are selling per week of Atorvastatin? STORVAS ATOCOR TONACT OTHERS Objective: The objective of asking this question was to know the approximate ave rage weekly sale. AVG SALES PER CHEMIST SHOP (STRIP/WK) 30 25 20 15 10 5 0 STORVAS ATOCOR TONACT OTHERS AVG SALES PER CHEMIST SHOP (STRI P/WK) G8: Sales of Atorvastatin per shop 39

FINDINGS In Atorvastatin therapy STORVAS (RANBAXY) captured maximum market share because of their product quality, followed by TONACT (LUPIN) and ATOCOR (DR REDDY) rest of market captured by others. From the sales data, CV patients are increase day by day. In India cardiovascular segment is nearly 14% which was published in rep uted journal and newspaper. In CV segment Atorvastatin play a very vital role, w hereas Rosuvastatin gives tough competition in statin-war. In Delhi 10 mg Atorva statin is mostly sold. From this data it is easily analysed that CV patients tak ing Atorvastatin when they were dictated as CV risk factor patients. Post MI and ACS patients also taking Atorvastatin in the form of 40 mg tab. 40

CONCLUSION There can be various ways through which a business organization can achieve succ ess in the market, but all those ways can be comprised into as above, then it ca n be rightly said that it revolves specifically around three parties or more; th e triangular linkages or the relationship between these three parties (company, customers and competitors) determine the success and failure of business organiz ation. In the medium to long run, the domestic pharmaceutical market will be lar gely driven by the increasing prevalence of chronic segment. The basis of succes s in any competitive context can be, at the most, elemental level commercial suc cess; and commercial success can be derived either from a cost advantage or a va lue advantage or ideally from a combination of both. In other words, the organiz ation with Competitive Advantage tends to be the cost leader in the industry or a seller of most differentiated products amongst all the players. If we have to compete with our rivals then we have to make concrete marketing strategy and fol low it strictly. We also have to keep a keen watch on our rivals strategy and tak e steps according to them. Besides we also have to work on other possible areas of marketing like maintain good relation with doctors & chemists that can streng then our sales. At last the role of supply chain is very prominent in both the p hases (in acute as well as in chronic). But the successes of any pharmaceutical industry; when a company changes its concentration from Acute to Chronic therapy mar ket depend on competitiveness of supply chain. Supply Chain Managers can provide considerable value to their companies by understanding the customers delivery requirements. A very powerful tool for understanding these requirements is accou nt segmentation. A company can use account segmentation to identify market segme nts Such as Acute & Chronic therapy market. Which is well positioned to serve an d then organize its product range and even SKUs and service in a superior way. 41

RECOMMENDATIONS Pharmaceutical companies are taking care to satisfy the above factor however but a little extra care & also monitor the feedback provided by its marketing execu tives then the results will boost up. In my view following key factors may be he lpful in increasing the sales of a company, these are: Frequent Doctors intaining better relations with the doctors. Samples & Gifts. Availability of pr oducts with retailers. Company should give more profit to the chemists The compa ny should work more on replacement schemes, replacement of expired medicines. Co mpany should keep in mind about cost factor Dosage. Advertisement in medical jou rnals. Quality assurance. Before launching a new product company should provide information to the chemists by arranging get together & Seminars. 42

Annexure Dear Sir, Questionnaire for the Retailers (Chemist and Druggist)

As part of our two-year PGDM program at Integrated Academy of Management and Tec hnology, Ghaziabad. I have undertaken a project work to study Comparative study o f various brands in Atorvastatin therapy. I would be grateful if you spare few mi nutes in filling up the following questionnaire. All information provided by you remains completely confidential. Name of the chemist __________________________ ____________ Location ____________________________________________ Mob: . 1. T ss deal in: Retail Wholesale Both 2. Which pharmaceutical company comes first at top in your mind in terms of CV d rug? Ranbaxy Cipla Lupin Dr. Reddy 3. Why do you think this company is leading at the moment? Price Margin Quality Availability 4. Which statin molecules are mostly prescribed by the Doctors? Atorvastatin Simv astatin Rosuvastatin Others 5. In Delhi which are the most selling Atorvastatin? STORVAS ATOCOR TONACT OTHER S . 6. Which Composition (mg) of Atorvastatin is mostly selling? 5 10 20 40 7. Which combination of Atorvastatin salt is most frequently sold in the market? Atorvas tatin Atorvastatin + Finofibrate 43

Atorvastatin + Ezetimibe others 8. How many strips are selling per week of Atorvastatin? STORVAS ATOCOR TONACT O THERS 44

Bibliography: Books & Journal: KOTHARY, Research methodology,2nd edition,2007 Naresh K. Malhot ra , Introduction to Market Research Walker-Mullins-Boyd-Larreche, Marketing str ategy, 5th edition, TATA Mcgraw- Hill Marketing Research- Cooper and Schindler. M arketing Management, by Keller Kotler Deutsche bank report: Indias pharmaceutical industry on course for globalization. Research paper on Critical Challenges & Iss ues in Patent Documentationby Ashutosh Nigam (Asst Professor, Dept of Management Studies,Vaish College of Engineering, Rohtak) Drugs and Pharmaceuticals: Interna tional Pharmaceutical Industry-A Snapshot,Jan 2004, ICRA Presention by Jerry A. Rosenblatt, PhD onPredicting 2008: Global Pharma Market Forecast Global Practice L eader, Forecasting & Opportunity Assessment November 14, 2007 Website: www.scribd.com www.wikipidia.org www.ncbi.nlm.nih.gov www.mims.com/ www .medlineindia.com www.bharatbook.com/.detail.asp?=44690 www.news.pharma-mkting.c om/ www.oppi.com www.capitaline.com www.altavista.com www.site.securities.com ww w.pharmainfo.com www.etintelligence.com www.pharmainfo.net www.kpmg.de www.info. shine.com www.equitymaster.com www.expresspharmaonline.com 45