MANAGEMENT THESIS ON

A study on the promotional strategies used by medical representative with respect to Cipla.

A report submitted in partial fulfillment of the requirements of THE MBA PROGRAM (The Class of 2009) ICFAI NATIONAL COLLEGE Submitted to: Mrs. Malleshwari(faculty guide) Submitted by: Mukesh Kumar Roll no: 7NBBPO19

TABLE OF Contents
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MAIN HEADINGS PAGENO.

(1)ACKNOWLEDGEMENT3 (2)CERTIFICATE.4 (3)INTRODUCTION ....5 3.1OBJECTIVE OF STUDY...5 3.2 LIMITATION5 (4)INDUSTRY PROFILE.6-23 (5)COMPANY PROFILE24-33 5.1SWOT ANALYSIS...........31-32 5.2VISION AND MISSION.........33 (6)ANALYSIS..34-51 (8)FINDINGS.52 (9)CONCLUSION...............................................53 (10)ANNEXURE.......54 10.1QUESTIONNNAIRE......54 (11)REFERENCES..55

ACKNOWLEDGEMENTS
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We cannot achieve anything worthwhile in the field of technical education unless or until the theoretical education acquired in the classroom is effectively wedded to its practical approach that is taking place in the modern industries and research institutes. It gives me a great pleasure to have an opportunity to acknowledge and to express gratitude to those who were associated with my Project. Constraints are the best source of inspiration and opportunity to explore us. This project is synergistic product of many minds. The inspiration is drawn from the working of team members and their experiences. Communication is the key towards all the responsibilities and demands of time, travel, work in competitive work. It is plus to have effective, secures communication. Project team is grateful to all personalities for stimulating and thought provoking during the entire project. For the successful completion of this project, team members feel deep senses of gratitude to Mrs Malleshwari faculty ICFAI,J.P Nagar, for motivating and inspiring to achieve the best and providing opportunity to explore ourselves. Last but not the least I would again like to express my sincere thanks to medical representatives of Cipla for their constant friendly guidance during the entire stretch of this report. Every new step I took was due to their persistent enthusiastic backing & I acknowledge that with a deep sense of gratitude. MUKESH KUMAR ICFAI-J.P NAGAR 4th SEMESTER Date: Place: Bangalore

CERTIFICATE
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This is to certify that management thesis titled A study on the promotional

strategies used by medical representative with respect to Cipla. submitted

by Mukesh Kumar Enrollment no:7NBBP019 during the semester 4 of the MBA program(The class of 2009) embodies original work done by him.

Signature of the faculty supervisor Name Designation Campus : Mrs Malleshwari : Faculty for Quantitative methods : ICFAI (J.P NAGAR)

INTRODUCTION
Management thesis is a part of our MBA program and gives us the opportunity to keep foreword our views on business. It is a component that provides an opportunity to the student to undertake research into ideas and express our opinions after research. Summer internship program is a
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extensive opportunity which is really helpful to design the MT. Financial sector is the one of the fastest growing which is helping the Indian economy to increase the pace of the GDP. Hence working with the brokerage firm a NBFC really helped me to construct the management thesis. The report will really help to understand the Indian equity market and how does it works. Report will be also helpful to understand the how the brokerage firm works and the different services provided by them. The study was conducted through the primary and secondary data. Respondents were basically from Bangalore and the customers of Religare who invest in the Indian equity market in the various form of their investment.

Objective OF THE STUDY:

To find out the promotional strategies used by medical representative with respect to

Cipla.

To find out various promotional strategies used by Cipla to acquire the market share

To find out the importance of medical representative in the pharma sector

To find out various roles played by medical representative to enhance the sales

To find out product which are doing well in the market of Cipla.

LIMITATION:
Major of the study is supported by secondary data No specific data for bribing with respect to the industry. Bias on the part of respondents will be a major drawback.
Analysis of the primary data cant be done by implementing of test

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Industry profile
The Indian Pharmaceutical Industry today is in the front rank of Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously. Playing a key role in promoting and sustaining development in the vital field of medicines, Indian Pharma Industry boasts of quality producers and many units approved by regulatory authorities in USA and UK. International companies associated with this sector have stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped to put India on the pharmaceutical map of the world. The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical companies control 70% of the market with market leader holding nearly 7% of the market share. It is an extremely fragmented market with severe price competition and government price control. The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce the complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations. Over 20,000 registered pharmaceutical manufacturers exist in the country. The domestic pharmaceuticals industry output is expected to exceed Rs260 billion in the financial year 2002, which accounts for merely 1.3% of the global pharmaceutical sector. Of this, bulk drugs will account for Rs 54 bn (21%) and formulations, the remaining Rs 210 bn (79%). In financial year 2001, imports were Rs 20 bn while exports were Rs87 bn.
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Indian companies need to attain the right product-mix for sustained future growth. Core competencies will play an important role in determining the future of many Indian pharmaceutical companies in the post product-patent regime after 2005. Indian companies, in an effort to consolidate their position, will have to increasingly look at merger and acquisition options of either companies or products. This would help them to offset loss of new product options, improve their R&D efforts and improve distribution to penetrate markets. The first Indian pharmaceutical company, Bengal Chemicals and Pharmaceutical Works, which still exists today as one of 5 government-owned drug manufacturers, appeared in Calcutta in 1930. For the next 60 years, most of the drugs in India were imported by multinationals either in fully-formulated or bulk form. The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s, and with the Patents Act in 1970, enabled the industry to become what it is today. This patent act removed composition patents from food and drugs, and though it kept process patents, these were shortened to a period of five to seven years. The lack of patent protection made the Indian market undesirable to the multinational companies that had dominated the market, and while they streamed out, Indian companies started to take their places. They carved a niche in both the Indian and world markets with their expertise in reverse-engineering new processes for manufacturing drugs at low costs. Although some of the larger companies have taken baby steps towards drug innovation, the industry as a whole has been following this business model until the present Products and business description This sector profile covers pharmaceutical end products only. These can be divided intothree categories: Prescription drugs, based on chemical compounds and prescribed or administered by healthcare professionals Over the counter (OTC) drugs, based on chemical compounds and freely sold Vaccines, based on bacteria and viruses

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The distinction between branded and generic products is also important. A branded product is the original version, produced by the innovative company that developed the product. A generic product is a copy of the original by another company. Many innovative companies have divisions that pro R&D for new drugs requires high investments. After the discovery of new chemical compounds with a therapeutic effect, a patent is filed. This protects the potential new drug against generic competition, usually for 20 years. The drug then still has to be tested in several phases of clinical trials. The total development process costs several hundred million dollars and takes over 10years. If the new drug is finally proven safe and effective, it is approved by a regulatory authority. As long as a branded product is protected by a patent, companies charge high prices to recover R&D investments and make high profits. After patent expiry, competition from cheap generics usually causes a large drop in prices. duce generics as well. R&D investments for vaccines are comparable to those for drugs. However, the production process of vaccines is more complicated and their delivery requires an advanced infrastructure (cold chain). Furthermore, the new vaccines currently used in high income countries are of a different type than those recommended for poor countries. They are much more expensive, but are preferred due to the lower risk of adverse reactions. The largest pharmaceutical markets are the US, Europe and Japan. Together, these account for 84% of the $460 billion of global drug and vaccine sales in 2003. Cardiovascular and central nervous system (CNS) medicines are the largest selling therapeutic classes. Companies and business strategies Over the last years, there have been many large mergers and acquisitions in the sector ,while many companies have divested non-core activities. Although R&D investment has strongly increased over the past decade, many large companies do not have promising R&D pipelines and increasingly pursue growth through enhanced marketing. Outsourcing of production and alliances for R&D, distribution or marketing are common business strategies.

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Within this part of the sector, it important to recognize the distinction between branded and generic producers. Branded companies are the innovative companies that carry out the Research and Development (R&D) of new drugs (or contract this process). Initially, their products are protected by patents. The clinical test data, used for the approval of the drugs, is usually protected as well. Generic companies produce drugs that they have not developed themselves. Normally these drugs are not protected by patents anymore This report focuses mainly on the branded industry. However, many branded companies have divisions or subsidiaries that produce generics as well. With regard to the products of these companies, three categories of drugs are commonly distinguished. Prescription drugs. These have to be prescribed or administered by healthcare professionals. Over the counter (OTC) drugs, also called self-medication drugs. These can be purchased without a prescription. Vaccines. These are usually regarded as a separate category next to pharmaceuticals.5 In contrast to pharmaceuticals, vaccines are not based on chemical compounds but on live bacteria and viruses. The production process of vaccines is therefore quite different and far more complicated The business of drug development Branded companies make high investments in R&D to discover new drugs. It is estimated that the development of a major drug costs up to US$ 400 million and requires as long as 10 years to be introduced into the market. The development of new drugs usually starts with the discovery of new chemical compounds with a therapeutic effect. This is the first research phase. Once the basic compounds have been identified, pharmaceutical companies obtain patent protection for their potential use in new drugs. These patents grant the exclusive right to sell and market a specific drug for a specified time period, usually twenty years. After the discovery of a new compound follows the further development into an effective and safe treatment and the testing of the new drug candidate in subsequent phases of clinical trials. Finally, a new drug has to be approved by a regulatory authority, like the Food and Drug Administration (FDA) in the case of the US. Drug approval may take 11.5 year. The estimated duration, cost and rate of success for

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the various development stages of an average drug are provided in the table below. A short description of the testing phases is given as well. Thus, when a pharmaceutical company launches a new drug on the market, it has only a limited period of time of considerably less than twenty years in which it has exclusive marketing rights. During this period companies charge high prices for the drugs to recover their R&D investments and make high profits. The production costs of drugs are never disclosed, but they are only a fraction of the exclusive marketing price of a drug. It is estimated that average manufacturing cost are usually in the order of 5% of this price. Marginal production costs are still considerably lower due to economies of scale.6 Apart from patent protection, there is usually a period of data exclusivity that protects the clinical testing data of pharmaceutical companies. This period starts at the moment a product is approved and may have a duration of five years or more. During the data exclusivity period, other companies cannot rely on the data of the company that developed the drug for the approval of a generic version. After the expiry of patent protection on a pharmaceutical product, other companies may legally copy the drug and sell a generic version. For the approval of a generic, a company has to proof that its drug is a biological equivalent of the original. This allows a company to rely on the clinical testing data of the branded company, provided that these are not protected by data exclusivity anymore. Generic producers therefore do not have to make high R&D investments and generic competition usually causes a large fall in prices. In the US, drugs face fierce competition right after the expiration of a patent. In Europe, generics are generally introduced slowly and at higher prices.7 A successful drug can generate enormous revenues for a pharmaceutical company. Some drugs, the so-called blockbusters, have sales of well over US$ 1 billion per year. Yet after the expiration of a patent, revenues can quickly diminish and companies may be forced to lower their profit margins because of generic competition. For example, in 2003 the quarterly sales revenue of its three medicines Glucophage IR, Taxol and Serzone of Bristol- Meyers Squibb dropped by 90% after patent protection expired.8 1.3 Market structure and trends The largest pharmaceutical markets are the USA, Europe and Japan. The total world market for pharmaceuticals (sales of pharmaceutical products) displayed strong growth over the past years and increased by almost 9% in 2003. Due to the ageing populations in the major markets, drug

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use will probably continue to grow. Market size estimates of regional pharmaceutical markets and of the largest selling therapeutic areas are provided in the tables below. The vaccines market The market for vaccines is somewhat different from that of other therapeutic classes. Like pharmaceuticals, the development of new vaccine products usually takes 7-12 years an costs several hundred million dollars. The development of new vaccines also requires the construction of new facilities. The strict government regulations that are imposed have profound implications for the vaccine industry, and vaccine producers have to continue to invest in production facilities in order to meet production standards. In addition, vaccines have to be kept at the right temperature during distribution and therefore the delivery of vaccines requires an advanced infrastructure (cold chain) and active support of the producer. A large majority of vaccines is procured at the national level by public health sector organizations. Large market segments may be served by a single company. Merck is the sole supplier of measles-mumps-rubella vaccines in the US, for example. Yet the demand for vaccines is difficult to forecast and may change during the actual production cycle, which is considerably longer than for pharmaceuticals. Demand for vaccines changes according to for example the severity of diseases, production lead times, regulations, and actions of competitors. The vaccines currently used in the US and other high income countries are often of a different type than those used in developing countries. For example, the US use the a celullar pertussis type and Measles-mumps-rubella (MMR) combination, whereas developing countries use whole cell pertussis vaccines and measles alone instead of MMR. The Netherlands has recently decided to start administrating the whole cell pertussis vaccine instead of the a cellular type. This is because of the higher risk of adverse reactions associated with the older vaccine types. Furthermore, high income countries use Inactivated Polio Vaccine (IPV) for routine immunization programmes, whereas developing countries use Oral Polio Vaccine (OPV).12 OPV is easier to administrate and much cheaper. It is also the preferred vaccine when a polio outbreak needs to be contained, because it causes higher immunity in the intestinal tract and is therefore more effective to interrupt the circulation of the polio virus. However, in extremely rare cases (less than 1 in a million doses), the live attenuated virus in OPV can cause vaccineassociated polio. For this reason high income countries prefer IPV for regular immunization. The
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newer vaccines, used in high income countries, are much more expensive. In some cases they cost over a hundred times more. A diphteria-tetanus-whole cell pertussis (DTwP) vaccine, for example, costs US$ 0.07 only. By contrast, the diphteria-tetanus-acellular pertussis (DTaP) vaccine that is used in high income countries, in combination with for example IPV or hepatitis B, costs over $10. Similarly, a single measles vaccine costs $0.14d R&D pipelines In principle, the quality and the marketing potential of the products in the R&D pipeline of a company determine its potential for future growth. At present, the largest 20 pharmaceutical companies have almost 700 new drugs in development.20 Over the past decade, R&D investments of the pharmaceutical industry have grown faster in the US than in Europe. In Europe, 2002 investments were Euro 20 billion, compared to 8 billion in 1990, whereas R&D investments in the US were at 28 billion in 2002, down from 5 billion in 1990. As companies are investing more heavily in the US, analysts perceive that the European pharmaceutical industry is in not in a favourable competitive position.21 Yet the increase in investment has not been matched by a comparable increase in new drug approvals, hence the R&D results of most companies are declining.22 The complexity of the investigated treatments has increased and it has become more difficult to obtain approval for new drugs due to the stricter application of existing regulations in the US by the FDA. The most common reasons for not approving a drug are negative by-effects of the drug that were identified in clinical trials and the limited added value over existing drugs.23 Worldwide drug approvals hit an all time low in 2003.24 The largest pharmaceutical companies, which have grown fastly during the 1990s, do not promising R&D pipelines while patents on successful drugs are expiring. For the period 2002-2007, the drugs on which patent protection expires in these years generate combined sales of about US$ 40 billion.25 2.3 Protection against generic competition and growth through marketing Pharmaceutical companies have several strategies to reduce or prevent competition form generic producers, which often greatly reduces the renevues from a drug. One strategy is to obtain additional patents to extend the period of patent protection, if possible. Another strategy is to fight the approval of generic drugs and charge generic producers of infringing patents or data exclusivity. For example, in 2003 Mylan, Watson and Ranbaxy Laborories, two generic producers from the US and one India, resectively, sought FDA approval to produce generic
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versions of Actos. Actos is a blockbuster diabetes drug of Takeda, Japan's largest pharmaceuticals. Another strategy to protect a drug from competition is to launch a slightly improved version or more convenient formulation of the same drug. A new patent can be obtained for this improved drug. The company then tries to persuade doctors and patients to use this improved version. The effectiveness of this strategy depends to a large extent on the marketing of the new drug. Examples of attempts to curb generic competition in this way include AstraZenecas marketing of Nexium, a slightly improved version of its out-of-patent ulcer drug Prilosec,27 and the release of Wellbutrin XR by GlaxoSmithKline, a sustained release version of its antidepressant Welbutrin that now faces generic competition.28 In the US, the growth of the industry over the last ten years has been partly based on such slightly improved new drugs, backed by massive sales and marketing operations and TV advertisement. 29 Because of the disappointing results of their R&D pipelines, pharmaceutical companies increasingly pursue growth through enhanced marketing of their drugs. Especially the large pharmaceutical companies have developed into marketing specialists that are very good at putting products into the market. The focus on growth through marketing is reflected by the high marketing expenses compared to R&D investment. The Swiss company Roche, for instance, spends 31% of its turnover on marketing against 16% for R&D.30 Corporate philanthropy and corporate responsibility programmes help to enhance a companys identity and hence such initiatives might support marketing efforts. Marketing is also a stategy to reduce generic competition in itself. By promoting the propietary brand names of patented drugs, pharmaceutical companies may be able to sustain drug sales even if these are no longer protected by patents. Restructuring and outsourcing Several companies are restructuring their businesses to cut costs. Among these are Merck, which eliminated 4,400 jobs worldwide, and Organ on, the human health division of Akzo Nobel, which cut 800 jobs in the US. The contracting of drug manufacturing to low cost producers is a common business practice in the pharmaceutical industry. These are usually located in lower cost countries, such as India, China or South Africa. It is not unusual that the production is contracted to a company that produces generics too. Hence, although the development of the generic drug

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industry in low cost countries may lead to increased competition for branded pharmaceutical companies, it also creates opportunities for cost-saving through outsourcing of production. There is a trend towards the outsourcing of R&D towards countries with lower wages too. For example, Novartis established its new R&D facility, the Novartis Institute on Tropical Diseases (NITD), in Singapore. GlaxoSmithKline linked up with the Ranbaxy, an Indian producer of competing generic drugs, for early-stage research of new drugs.31 GlaxoSmithKline is also carrying out trials for its Rotavirus vaccine in Latin America, among other reasons because trials are considerably cheaper there, whereas reasonable infrastructure is readily available. 2.5 Consolidation and specialization Over the last years, many pharmaceutical companies have been involved in large-scale margers and acquisitions and there is a trend towards further consolidation and concentration in the sector. Recent large mergers and acquisitions include the following: In 2004, UCB is to take over Celltech for US$ 2.7 billion, creating the fifth largest biotechnology company in the world In 2004, Sanofi-Synthlabo has taken over Aventis for Euro 55 billion In 2003, Pfizer acquired Pharmacia for US$ 56 billion32 In 2002, Amgen acquired Immunex for US$ 16 billion In 2001, Johnson & Johnson acquired Alza for US$ 12 billion In 2001, Broistol-Myers Squibb acquired DuPont Pharmaceuticals for US$ 8 billion In 2000, Glaxo Wellcome and SmithKline Beecham merged to from GlaxoSmithKline33 In 2000, Pfizer and Warner-Lambert merged to form the new Pfizer In 1999, Rhne-Poulenc and Hoechst merged to form Aventis34 At the same time, there is a trend towards concentration on pharmaceutical core-business and the divestment of non-core activities. Recent major divestments include the following. In 2003, Merck divested Medco Health, a provider healthcare services In 2002, Aventis sold its agrochemical business to Bayer and its animal health division to CVC Capital Partners In 2002, Novartis divested its agrochemical business to form Syngenta The consolidation leads to increased concentration of drug portfolios. For example, when RhnePoulenc and Hoechst merged in 1999, their combined portfolio included three fo the four
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medicines against sleeping sickness. The present merger between Sanofi-Synthlabo and Aventis could also lead to serious competition concerns, and in an effort to head these off SanofiSynthlabo has already agreed to sell two heart disease drugs and a manufacturing plant to GlaxoSmithKline.35 Because of the far more complicated production process and a series of litigation lawsuits in the 1980s, the number of industrialized country vaccine manufacturers has decreased over the past decades and they have consolidated into five major corporations. These are Merck & Co, GlaxoSmithKline, Aventis, Wyeth and Chiron. For some vaccines the number of producers is even lower. Yellow fever vaccines, for example, are produced exclusively byAventis, GlaxoSmithKline and UCB (formerly Celltech). Strategic alliances Strategic alliances are also common in the industry, mainly for combining the strengths of companies in different areas such as distriubution and marketing, manufacturing and R&D. For example, distribution or marketing agreements provide smaller companies, especially biotechnology companies, with access to large sales infrastructures. However, the number of alliances between biotechnology companies themselves has also been increasing, suggesting that they are becoming less dependent on large pharmaceutical companies for the marketing of their products.37 On the other hand, biotechnology companies continue to offer interesting opportunities for large companeis to improve their R&D pipelines. Pfizer recently announced a new strategy to buy biotech companies, for example.38 2.7 Expansion towards generic drugs In the first section of this report it was already mentioned that many branded companies have divisions or subsidiaries that produce generics as well. Of the twenty largest pharmaceutical companies listed in this report, only Teva Pharmaceuticals has the production of generic drugs as its main activity. However, some of the other companies are important generic producers too.

CSR issues on access to medicines for developing countries 3.1 Recent developments on TRIPS
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The protection of intellectual property is an important aspect of access to medicines. As decribed above, patents and other forms of intellectual property rights protect a innovative drugs against generic competition. The pharmaceutical industry itself stresses that access to medicines depends on many more factors than patents, including the infrastucture for the distribution of medicines. The potential effects of generic competition on drug prices in developing countries will be illustrated with a common example of anti-retroviral (ARV) therapy. Before 2001, ARV treatment would cost more or less the same in Africa as in the US and Europe, about $10,000 a year. Only a relatively small number of countries had negotiated prices in the range of $1,000 a year, after lengthy negotiations with the patent holders, who sometimes required them to keep the lower prices a secret. In february 2001, prices suddenly dropped when the Indian generics manufacturer Cipla offered ARV therapy for US$ 350 a year. India recognizes patents on drugmaking processes, not on products, so Cipla can legally produce generics as long as it uses a slightly different process.40 In August 2003 Aspen Pharmacare launched the first domestically produced generic in South Africa, a copy of Bristol-Myers Squibbs Zerit. 41 An important international framework for the protection of intellectual property is the World Trade Organization (WTO) agreement on Trade-Related aspects of Intellectual Property Rights (TRIPS). This agreement was concluded in the Uruguay round of WTO negotiations that ended in 1994. The TRIPS agreement requires all WTO members (currently 147 countries) to pass legislation that protects intellectual property, such as patent protection. It also states that signatories must protect patent holders data from unfair commercial use, but it does explicitly not oblige data exclusivity periods. Least developed countries were given until 2006 to comply with these requirements. The articles 6, 30 and 31 of the agreement are of special relevance for access to medicines in developing countries. Article 6 specifies that countries can decide whether or not to allow international exhaustion of patents. This is also called parallel importing and means that patented products may be imported from foreign markets at a lower price. Article 30 allows countries to provide exceptions to the exclusive rights conferred by a patent, provided that they do not unreasonably conflict with a normal exploitation of the patent. Industry lobbying for intellectual property protection Pharmaceutical companies have been accused of agressively lobbying against the weakening of international patent protection during TRIPS negotiations.47 A large part of the industry lobby is
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carried out by the Pharmaceutical Research and Manufacturers of America (PhRMA). It is therefore difficult to determine the lobby positions of individual pharmaceutical companies. The PhRMA is a US-based organization that represents the country's leading research-based pharmaceutical and biotechnology companies.48 Its members include all major pharmaceutical companies in the world, not just those based in the US. The PhRMA pursues a TRIPS-plus agenda, that is, provisions on intellectual property protection that go beyond the requirements of TRIPS agreement. The main issues of this agenda are the following. 49 Limitations to compulsory licensing. The protection of test data by data exclusivity periods. No approval of generic drugs until the patent on a drug has expired, also called linkage of regulatory approval with patent status. This delays the launch of generic drugs beyond patent expiry, as generic producers typically obtain approval well in advance to prepare the launch of the generic product. No exhaustion of patent rights and no export of generics. This means that patented or generic products cannot be purchased in foreign markets at lower prices. Recently the focus of the industry lobby has shifted towards the establishment and extension of data exclusivity periods. As explained before, this effectively prevents generic competition by not allowing other producers to rely on the clinical test data of the patent holder for approval of the drug. This may delay the launch of generic medicines beyond patent expiry. In line with these industry interests, the European Commission proposed in 2003 an extension of the data exclusivity period, which could threaten access to cheap generic medicines in accession countries.50 Pricing of medicines Pricing is one of the areas where pharmaceutical companies can make a major contribution to enhance access to medicines in developing countries. Lower medicine prices can considerably increase their availability to poor populations, regardless from other problems such as the weak infrastructure for the delivery of medicines in developing countries. Sales in poor countries, especially least developed countries, typically generate a very small proportion of the total sales of a pharmaceutical company. Companies could therefore supply medicines too these countries at differential, strongly reduced prices, without a substantial loss of profits. This brings two potential risks for pharmaceutical companies. Firstly, the supply of cheaper medicines in
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developing countries can result in parallel imports of these medicines into high income markets, where they can be sold by others for a much higher price. Such product diversion means that the medicines will not reach the target population and that the company will suffer reduced sales in high income countries. Most industrialized countries prohibit parallel imports without the permission of the patent holder. Some companies have taken additional steps to prevent preferentially priced medicines from being illegally re-sold at higher prices. Preferentially priced products from GlaxoSmithKline, for example, have different colours and come in different packages, sothey can be easily recognized. Secondly, the preferential prices may be used as a reference by healthcare providers in high income countries for negotiating lower prices. This is called reference pricing. Companies sometimes set preferential drug prices for least developed countries at production cost, which is normally kept secret because it is higly sensitive commercial information. The prevention of reference pricing requires political commitment from developed countries. The Accelerating Access Initiative (AAI), a partnership that searches to enhance access to ARVs, has demonstrated that this problem can be overcome. From a public health point of view, there are several concerns about the preferential pricing offers of pharmaceutical companies. In the past most pharmaceutical companies used to negotiate preferential prices on a case-by-case basis with individual countries. Such negotiations are a lengthy process often yield sub-optimal outcomes for developing countries. Individual negotiations also limit the transparency and reliability of preferential prices. Furthermore, governments may be required to offer advantages to the company inexchange, such as refraining from resorting to generic drugs, or to keep medicine prices secret. This type of negotiations for ARV prices under the AAI have caused the partnership to be heavily criticized. Furthermore, price reduction have often been limited to small numbers of products. Development organizations therefore stress the need of a generalized global system of differential prices, which covers a broad range of a companys medicines and bases eligibility on objective indicators.60 Several companies have recently adopted preferential pricing schemes for ARVs that meet the criteria of fixed prices for groups of countries, objectve eligibility criteria and transparent offers. Yet in some cases negotiations still take place on a country basis, especially with middle income countries. R&D for developing countries diseases
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The majority of R&D expenditures is aimed at treatments for diseases that are mainly prevalent in high income countries. It is estimated that only 10% of R&D investment goes to diseases of developing countries, whereas these diseases account for 90% of the global disease death burden. Many poor people suffer or die from diseases that are treatable or curable, but for which little research is being performed. These include sleeping sickness (African Trypanosomiasis), diarrhoeal diseases, schistosomiasis, chagas disease and leprosy. Compared to for example HIV/AIDS research, R&D investment for leishmaniasis, tuberculosis (TB) and malaria is also relatively low.61 The reason for this discrepancy is that there are only small markets for these medicines, which means there is little profit to be made, except for HIV/AIDS treatments. They will therefore not yield an adequate return on R&D investments. This contrasts with treatments against diseases and disorders such as hypertension, elevated cholesterol levels, depression, arthritis, allergy and schizophrenia. These treatments fall in the therapeutic areas that generate the largest sales worldwide, as indicated earlier in this report Drugs donations Many pharmaceutical companies make drug donations to developing countries. Although these may help to improve access to medicines, there are some important concerns about drug donations. Donations may have an undue influence on the choice of medicines that are used in a recipient country. If one drug is available for free and other drugs are not, the first drug might be used even though it is not the prefered treatment. Various types of restrictions may apply, such as geographic, quantitative, indication and time restrictions. Sometimes donations require the implementation of a separate donations programme and are accompanied by high administrative costs for the recipient country. Recipient countries may become dependent on medicine donations. Donations may be more costly for donor governments than the procurement of preferentially priced or generic drugs, because of tax breaks that are under certain conditions granted to the donating companies, especially in the US. Not all donation programmes qualify for tax breaks, though.

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 Donations may have a negative impact on the development of the generic drugs industry and therefore cause unfair competition. Assuming that tax breaks are not a substantial compensation for donating companies, it is generally considered that offering preferentially priced medicines at production cost is more sustainable than medicine donations, because it enables companies to recover their expenses. In addition, the decision to donate a certain medicine involves setting priorities for the use of resources available to enhance healthcare in developing countries. If companies offer preferential prices for a wide range of drugs instead, this would allow developing countries more autonomy to set their own priorities. In the past there have been several cases of medicine donations that were inappropriate and sometimes even useless for the recipients. For example, donated medicines were not requested and could not be used, they could not be identified due to inappropriate labelling, or they had a remaining shelf-life too short to be used in time. Donations may be a disguised form of medicine promotion. In one case, for example, the Swiss company Novartis announced free supplies of its cancer drug Glivec to people around the world that could not afford its costs of US$ 27,000 per year. Some estimated that this number of patients would be as high as 600,000. However, in the end only 1,500 patients outside the US benefited from these donations, of which just 11 in least developed countries. It became clear that Novartis had used Glivec as part of a marketing strategy, and even encouraged patients benefiting from the donations to press public health systems to pay high prices for the drug. In 1999 the WHO adopted a set of guidelines for drug donations. These guidelines deal mainly with the last issue, inappropriate donations due to the quality of donations. The guidelines include the following standards. No donations should be made without consent of the recipient. There should be no double standards in quality. For instance, the donation of drugs that were returned to pharmacies are not allowed After delivery, the donated drugs should have a remaining shelf-life of at least half a year. The declared value of a drug should be based upon the wholesale price of it generic equivalent, to decrease the burden of customs clearance and import duties. High standards of medical donations are promoted by the Partnership for Quality Medical Donations (PQMD). This is an
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alliance of private voluntary organizations that develops and promotes sound donation practices, represents the interests of its members and encourages the study of health and socioeconomic impacts of donations. It identified 7 key components in the comprehensive management of drug donations, including needs assessment, appropriateness of the donation, quality standards, and impact evaluation. These are consistent with the WHO guidelines, but address a broader range of issues. Some pharmaceutical companies have been addressing various types of concerns about medicine donations on an individual basis. For example, companies commit themselves to donate a drug for as long as it is needed and seek to integrate drug donation programmes into existing healthcare infrastructures. 3.6 Global Public-Private Initiatives Global Public-Private Initiatives (GPPIs) for health are partnerships of public and private actors that work together to achieve health outcomes. Although this type of collaborations is not new, they are increasingly regarded as one of the most appropriate ways to improve access to medicines in developing countries. In the past 10 years, many new GPPIs have been established. There are at present some 80 GPPIs for health. The Initiative on Public- Private Partnerships for Health (IPPPH) registers some (but not all) of these partnerships and maintains a public database with information about the registered partnerships.67 The nature of the partnerships is diverse. Often GPPIs have one or more of the following goals: Support or accellerate R&D for major diseases in developing countries Deliver medicines to developing countries for free or at preferential prices Strengthen the health care infrastructure in developing countries Coordinate the efforts of various individual partners or other partnerships GPPIs serve to bring together the expertise of different partners and to bring in additional funds to improve health in developing countries. However, there are a number of concerns about GPPIs.68 The inventory below applies mainly to partnerships that seek to improve access to medicines. Some concerns are related to the governance of GPPIs. The recipient countries and populations have sometimes very little influence on the goals and strategy of a partnership. They are often underrepresented in GPPI boards. There may be conflicts of interest and undue influence of private sector partners on public health policies. For example, the participation of pharmaceutical companies in the management
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of GPPIs may enable them to influence public health priorities and technical standards according to their commercial interests. Transparency about the governance of partnerships and the commitments and responsibilities of various partners is often low. It may not be clear to whom the management of a GPPI is accountable. The role and responsibilities of the various partners to a GPPI may not be clear. In addition, it may not be able to hold them accountable for their commitments to the partnership. The impacts of GPPIs are not always well monitored and evaluated. In 2000 the WHO secretariat adopted internal Guidelines on interaction with commercial enterprises to achieve health outcomes to deal with potential conflicts of interests. They recommend that the WHO should always consider whether a proposed relationship might involve a real or perceived conflict of interests and call for a step-by-step evaluation of the commercial enterprise.69 However, these guidelines were not always followed when new GPPIs were initiated. Other concerns are related to the strategies and impact of GPPIs. GPPIs may create parallel structures in developing countries that are an additional burden on the health sector in developing countries, instead of integrating with local healthcare infrastructures. Coordination between different GPPIs is often lacking too. GPPIs may not deliver sustainable results, because they do not strengthen the local health sector and commitments from commercial partners are usually for a maximum period of five years. GPPIs may not be linked to sector-wide approaches and national poverty reduction strategies. GPPIs may have a narrow focus and medicalize health problems. An integrated approach, including prevention of a disease, may be lacking. Furthermore, many GPPIs are focused at the enhanced delivery of medicines but do not address the underlying causes of health problems, such as unsafe drinking water, malnutrition and inadequate sanitation. Drug safety The safety of drugs is heavily regulated and companies have the responsibility to ensure that healthcare workers understand how their drugs can be safely used. Furthermore, companies have to ensure drug quality and traceability of drugs during manufacturing and distribution. In the
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case of production errors or contamination, unsafe production batches have to be withdrawn from the market. 76 For products that are sold in the US market, the FDA requires companies to observe current Good Manufacturing Practices (cGMP), a process standard for drug manufacturing. Sometimes companies have failed to comply with such standards, which has resulted in fines, litigation claims, lost contracts and the suspension of production.

COMPANY PROFILE
Cipla, originally founded as The Chemical, Industrial & Pharmaceutical Laboratories is a prominent Indian pharmaceutical company, best-known outside its home country for producing low-cost anti-AIDS drugs for HIV-positive patients in developing countries. Cipla makes drugs to treat cardiovascular disease, arthritis, diabetes, weight control, depression and many other health conditions, and its products are distributed in more than 180 countries worldwide. atorvastatin, amlodipine, fluoxetine, venlafaxine hydrochloride and metformin
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[1]

Among the hundreds of generic medications it produces for international distribution are

Khwaja Abdul Hamied, the founder of Cipla, was born on October 31, 1898. The fire of nationalism was kindled in him when he was 15 as he witnessed a wanton act of colonial highhandedness. The fire was to blaze within him right through his life. In college, he found Chemistry fascinating. He set sail for Europe in 1924 and got admission in Berlin University as a research student of "The Technology of Barium Compounds". He earned his doctorate three years later. In October 1927, during the long voyage from Europe to India, he drew up great plans for the future. He wrote: "No modern industry could have been possible without the help of such centres of research work where men are engaged in compelling nature to yield her secrets to the ruthless search of an investigating chemist." His plan found many supporters but no financiers. However, Dr Hamied was determined to being "a small wheel, no matter how small, than be a cog in a big wheel." Cipla and the Fight against HIV/AIDS in the Developing World: Today (2007), Cipla is the world's largest manufacturer of antiretroviral drugs (ARVs) to fight HIV/AIDS, as measured by units produced and distributed (multinational brand-name drugs are much more expensive, so in money terms Cipla medicines are probably somewhere down the list). Roughly 40% of HIV/AIDS patients undergoing antiretroviral therapy worldwide take Cipla drugs. Ranked third in Generic market share statistics in South African Private Sector.Because Indian law from 1972 has allowed no (end-product) patents on drugs, and provided for compulsory licensing, Cipla was able to manufacture medicines which enjoy patent monopoly in certain other countries (particularly those where large, multinational pharmaceutical companies are based). By doing so, as well as by making an executive decision not to make profits on AIDS medication, Cipla reduced the cost of providing antiretrovirals to AIDS patients from $12,000 and beyond (monopoly prices charged by international pharma conglomerates) down to around $300 per year. Today they are able to do so for under $150 per patient per year. While this sum remains out of reach for many millions of people in Third World countries, government and charitable sources often are in a position to make up the difference for destitute patients.The customary treatment of AIDS consists of a cocktail of three drugs. Cipla produces an all-in-one pill called Triomune which contains all three substances (Lamivudine, stavudine and Nevirapine), something difficult elsewhere because the three patents are held by different
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companies. One more popular fixed dose combination is there, with the name Duovir-N. This contains Lamivudine, Zidovudine and Nevirapine. Cipla was officially opened on September 22, 1937 when the first products were ready for the market. The Sunday Standard wrote: "The birth of Cipla which was launched into the world by Dr K A Hamied will be a red letter day in the annals of Bombay Industries. The first city in India can now boast of a concern, which will supersede all existing firms in the magnitude of its operations. India has lagged behind in the march of science but she is now awakening from her lethargy. The new company has mapped out an ambitious programme and with intelligent direction and skillful production bids fair to establish a great reputation in the East. " 1935: Dr K A Hamied sets up "The Chemical, Industrial and Pharmaceutical Laboratories Ltd." in a rented bungalow, at Bombay Central. 1941: As the Second World War cuts off drug supplies, the company starts producing fine chemicals, dedicating all its facilities for the war effort. 1952: Sets up first research division for attaining self-sufficiency in technological development 1960: Starts operations at second plant at Vikhroli, Mumbai, producing fine chemicals with special emphasis on natural products 1968: Cipla manufactures ampicillin for the first time in the country. 1972: Starts Agricultural Research Division at Bangalore, for scientific cultivation of medicinal plants. 1976:Cipla launches medicinal aerosols for asthma. 1980: Wins Chemexcil Award for Excellence for exports 1982: Fourth factory begins operations at Patalganga, Maharashtra

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1984: Develops anti-cancer drugs, vinblastine and vincristine in collaboration with the National Chemical Laboratory, Pune. Wins Sir P C Ray Award for developing inhouse technology for indigenous manufacture of a number of basic drugs. 1985: Cipla wins National Award for Successful Commercialisation of Publicly Funded R&D. 1991: Lauches etoposide, a breakthrough in cancer chemotherapy, in association with Indian Institute of Chemical Technology. The company pioneers the manufacture of the antiretroviral drug, zidovudine, in technological collaboration with Indian Institute of Chemical Technology, Hyderabad 1994: Cipla's fifth factory begins commercial production at Kurkumbh, Maharashtra 1997: Launches transparent Rotahaler, the world's first such dry powder inhaler device now patented by Cipla in India and abroad. The palliative cancer care centre set up by the Cipla Foundation, begins offering free services at Warje, near Pune. 1998: Launches lamivudine, becoming one of the few companies in the world to offer all three component drugs of retroviral combination therapy (zidovudine and stavudine already launched 1999: Launches Nevirapine, antiretroviral drug, used to prevent the transmission of AIDS from mother to child 2000:Cipla became the first company, outside the USA and Europe to launch CFC-free inhalers ten years before the deadline to phase out use of CFC in medicinal products 2002: Four state-of-the-art manufacturing facilities set up in Goa in a record time of less than twelve months. 2003: Launches TIOVA (Tiotropium bromide), a novel inhaled, long-acting

anticholinergic bronchodilator that is employed as a once-daily maintenance treatment for

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patients with chronic obstructive pulmonary disease (COPD). Commissioned second phase of manufacturing operations at Goa. 2005: Set-up state-of-the-art facility for manufacture of formulations at Baddi, Himachal Pradesh BOARD OF DIRECTORS : FOUNDER : Dr. K.A. Hamied (1898-1972) CHAIRMAN AND MANAGING DIRECTOR : Dr. Y.K. Hamied JOINT MANAGING DIRECTORS : Mr. M.K. Hamied, Mramar lulla NON EXECUTIVE DIRECTORS : Mr. V.C. Kotwal Dr. H.R. Manchanda Mr. S.A.A. Pinto Mr. M.R. Raghavan Mr. Ramesh Shroff Mr. Pankaj Patel CODE OF CONDUCT: As required under revised Clause 49 of the Listing Agreement the following code of conduct has been approved by the Board of Directors and is applicable to the Directors and Senior Management of the Company ETHICAL CONDUCT: All directors and senior management employees shall deal on behalf of the Company with professionalism, honesty, integrity as well as high moral and ethical standards. Such conduct shall be fair and transparent and be perceived to be as such by third parties

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CONFLICT OF INTEREST: Any director or senior management employee of the Company shall not engage in any business, relationship or activity, which might detrimentally conflict with the interest of the Company TRANSEPERENCY: All directors and senior management employees of the Company shall ensure that their actions in the conduct of business are totally transparent except where the needs of business security dictate otherwise. Such transparency shall be brought about through appropriate policies, systems and processes. LEGAL COMPLIANCE: All directors and senior management employees of the Company shall at all times ensure compliance with all the relevant laws and regulations affecting operations of the Company. They shall abreast of the affairs of the Company and be kept informed of the Company's compliance with relevant laws, rules and regulations. In the event that the implication of law is not clear, the course of action chosen must be supported by eminent legal counsel whose opinion should be documented

Shareholding Pattern The company has an equity capital base of Rs. 60.2 crore and the number of shares outstanding amount to 6.02 crore. The face value per share is Rs. 10 and the current market price is hovering around Rs. 1,075. The market capitalisation as on May 14, 2001 was Rs. 6468.27 crores. The promoters are holding 41.2% stake in the company. The free float available in the market is 46.8%.
Business Overview

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The present businesses of Cipla can be broadly classified into:

Domestic branded formulation sales (74% of total sales; 19-20% operating profit margin) Domestic unbranded formulation sales (7% of total sales; over 10% operating profit margin) Exports (19% of total sales; around 38-40% operating profit margin). Breakup of exports is as follows: o Europe (25%) o US (32%) o Africa (17%) o Middle East (14%) o Asia (7%) and o Australia (5%)

Cipla has been relatively low profile on its R&D initiatives compared to the domestic peers, all of whom have set their sights on discovering new chemical entities (NCEs). But lately, R&D spend of Cipla has increased by 25% to Rs. 300 mn (4% of sales) and the company has an R&D team of 200 people. In future the R&D expenditure is expected to grow at a faster pace compared to sales and might rise to over 5% of sales. The business environment for Cipla has become highly competitive in the last few years. The major factors affecting Cipla are as folows:

New Drug R&D costs are prohibitive, which has made MNCs to spread their R&D costs through Mergers / Acquisitions. In Indian Pharmaceutical Sector prices of over 60% of the Drugs/Formulations is controlled by the government through DPCO. For Cipla DPCO coverage is around 55% Low entry barriers in the bulk drugs market has led to a situation of over-capacity, which has made major domestic players, shift their focus towards formulations segment. As a result Cipla , which is earning nearly 80-85 percent of its sales from formulations is facing increasing competition. With the focus on post 2005 era, MNCs are strengthening their position in India through marketing tie-ups with local majors and fully owned subsidiaries. This can lead to even higher degree of competition.

The management of Cipla has consistently demonstrated its vision in backing the right strategy and consistently de-risking the business. This is reflected in the choice of therapeutic groups and the individual products that it has focussed on, the marketing route adopted for its export business and the kind of R&D projects taken up by the company. All this has translated into superior topline growth, higher profit margins and one of the most impressive returns on equity among its peers. Exports will be the key growth driver in the coming years - The exports of the company are expected to move up from 19% of sales in FY00 to 40-50% of sales by FY05.
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Increase in the R&D efforts - R&D spend of Cipla increased by 25% to Rs. 300 mn (4% of sales) and the company has an R&D team of 200 people. Going forward, the R&D spend will grow at a faster pace compared to sales and rise to over 5% of sales.

Swot analysis of cipla

Strengths 1. Low cost of production. 2. Large pool of installed capacities 3. Efficient technologies for large number of Generics. 4. Large pool of skilled technical manpower. 5. Increasing liberalization of government policies. Opportunities 1. Aging of the world population. 2. Growing incomes. 3. Growing attention for health.
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4. New diagnoses and new social diseases. 5. Spreading prophylactic approaches. 6. Saturation point of market is far away. 7. New therapy approaches. 8. New delivery systems. 9. Spreading attitude for soft medication (OTC drugs). 10. Spreading use of Generic Drugs. 11. Globalization 12. Easier international trading. 13. New markets are opening. Weakness 1. Fragmentation of installed capacities. 2. Low technology level of Capital Goods of this section. 3. Non-availability of major intermediaries for bulk drugs. 4. Lack of experience to exploit efficiently the new patent regime. 5. Very low key R&D. 6. Low share of India in World Pharmaceutical Production (1.2% of world production but having 16.1% of world''s population). 7. Very low level of Biotechnology in India and also for New Drug Discovery Systems. 8. Lack of experience in International Trade. 9. Low level of strategic planning for future and also for technology forecasting. Threats 1. Containment of rising health-care cost. 2. High Cost of discovering new products and fewer discoveries. 3. Stricter registration procedures. 4. High entry cost in newer markets. 5. High cost of sales and marketing. 6. Competition, particularly from generic products.

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7. More potential new drugs and more efficient therapies. 8. Switching over form process patent to product patent.

VISION AND MISSION

VISION : To heal India and to become the biggest and the most admired pharmaceutical company in India. MISSION: Cipla commits itself to endeavour to satisfy our customers' needs in every manner possible: through excellent service, by developing and marketing an effective, reliable and safe product and by offering our product at a price affordable to all patients. We further commit ourselves to contributing to continued medical education and research into new drug delivery systems in the belief that this contribution will improve technical
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know-how and ultimately benefit all patients in India. We intend to be the employer of choice in the pharmaceutical sector developing our most valuable asset, human capital, irrespective of race, colour or creed so that they may realise their full potential and ambitions. We pledge personal respect, fair compensation and a clean and safe working environment. It is our wish that we be recognised as innovators in the field of pharmaceutical marketing rather than just followers, be the investors pick and achieve sustainable above average returns to the investor. It is our dream that through our policy of dedication and commitment we will create an environment whereby Cipla Medpro will come to be recognised as the preferred partner in medicine.

ANALYSIS DIFFERENT PROMOTIONAL TOOLS

Promotional mix It is helpful to define the five main elements of the promotional mix before considering their strengths and limitations. Advertising Advertising is any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to persuade and to inform.

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The two basic aspects of advertising are the message (what you want your communication to say) and the medium (how you get your message across) Direct marketing Direct marketing creates a direct relationship between the customer and the business on an individual basis. Personal Selling Personal selling refers to oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale". Sales Promotion Sales promotion refers to the provision of incentives to customers or to the distribution channel to stimulate demand for a product. Public Relations Public relations is the communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly Factors that determine the type of promotional tools used Each of the above components of the promotional mix has strengths and weaknesses. There are several factors that should be taken into account in deciding which, and how much of each tool to use in a promotional marketing campaign: (1) Resource availability and the cost of each promotional tool Advertising (particularly on television and in the national newspapers can be very expensive). The overall resource budget for the promotional campaign will often determine which tools the business can afford to use.
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(2) Market size and concentration If a market size is small and the number of potential buyers is small, then personal selling may be the most cost-effective promotional tool. A good example of this would be businesses selling software systems designed for supermarket retailers. On the other hand, where markets are geographically disperse or, where there are substantial numbers of potential customers, advertising is usually the most effective. (3) Customer information needs Some potential customers need to be provided with detailed, complex information to help them evaluate a purchase (e.g. buyers of equipment for nuclear power stations, or health service managers investing in the latest medical technology). In this situation, personal selling is almost always required - often using selling teams rather than just one individual.

THE VALUE OF THE REPRESENTATIVE EMPLOYED BY THE CIPLA TO THE HEALTH CARE PROFESSIONAL
INTRODUCTION The definition of our customer is changing and it is necessary for the pharmaceutical industry to refine its vision of the behaviour driving each influencer in the network in which a variety of stakeholders participate. Exclusively targeting only doctors is no longer acceptable and other health care professionals, payers, administrators and patients are becoming increasingly important. THE ROLE OF THE MEDICAL REPRESENTATIVE Medical representatives perform several valuable services for the health care professional and in so doing contribute to the success of the health care professional and his or her practice. They ensure that doctors and pharmacists are introduced to new and improved medicines and reminded of other products available for the treatment of different diseases and conditions. The medical representative provides the health care professional with detailed scientific and clinical information. Services are provided free of charge as part of the value provided by the research
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based pharmaceutical industry. Other health care professionals e.g. physiotherapists and nurses may also be visited in the future as new prescribing requirements of the Medicines Act are implemented. Medical representatives are well trained and possess adequate medical and technical knowledge to detail their companys products in an accurate, responsible and ethical manner as prescribed by individual companys ethos, the Code of Marketing Practices to be published in terms of Section 18C of the Medicines Act (Act 101/1965) and subject to approval of the regulations to this Act. The pharmaceutical representative channel medical doctors evaluation of, and enquiries about the medicines to the manufacturer, including any reports of adverse events associated with the companies products. The medical representative is an important partner in improving the health status of the patient and the most important objective is to build a relationship of trust between all the health care stakeholders and the pharmaceutical company. VALUE OF THE MEDICAL REPRESENTATIVE Marketing of pharmaceuticals serves an essential function in the health care delivery system. Many doctors, pharmacists and other health care professionals learn about new medicines, and about ongoing research in their areas of specialisation, largely through effective and personalised interaction with prescribers and dispensers and ensuring that individual preferences are catered for. The medical system benefits significantly from this form of education, e.g.: to enable doctors and other health care professionals to learn timely and accurately about new therapies and diagnostic tools; to keep up with medical advances; to provide a mechanism for doctors to get prompt answers to their questions about medical research and the proper use of medicines; to provide doctors the opportunity to learn about new indications for existing products and updates on side effects, warnings and other essential prescribing information; to provide accurate and balanced clinical data based on approved comparative clinical studies on medicines regarding safety and efficacy against standard treatment regimens and placebo.

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If an appointment with a medical representative is used correctly the representative could assist in making the most efficient use of the health professionals time. This is done by stating a clear objective for the interview; for example any one or more of the following: Introduction of a new product or indication; Obtaining more clinical and cost effective information about established products; Discussing other services available such as CPD training; Probing for experiences with the companys products, particularly the newer ones, and implement the standard operating procedure in the event of a complaint or adverse event; Provide solutions to problems by networking with various resources Other services offered by the Representative Being a major link between the pharmaceutical industry on the one hand and the doctor and pharmacist on the other, the pharmaceutical representative can arrange a number of services, such as to: provide additional technical, clinical and scientific information about products; arrange literature searches about company products and comparative clinical studies; advise, when appropriate, on the reporting of adverse reactions; initiate liaison on proposed clinical trials; discuss clinical data or issues of concern regarding the pharmaceutical company and/or its products and services; provide information to the prescriber/dispenser on the national or international pharmaceutical industry; provide facts on diseases and the pharmaceutical product development process; discuss applicable pharmaco-economic data; provide support in practice management and issue resolution; help doctors to interact with payers. TRAINING OF THE MEDICAL REPRESENTATIVE A medical representative is a well trained person with a background in life sciences, often at degree level, such as in a pharmacy, nursing, pathology, laboratory, or other paramedical disciplines. Medical Representatives must acquire a full knowledge of the companies products,

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pass internal company examinations which normally comprises of anatomy physiology, disease processes, microbiology, pharmacology, and information on the pharmaceutical industry. The training of medical representatives is a continuous process and individuals will undergo company training when new products are introduced. Attending in-company conferences is mandatory to allow interaction between representatives to exchange views on improved customer support.

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PROMOTION AND MARKETING OF PHARMACEUTICAL PRODUCTS Pharmaceutical marketing is an essential part of the R&D process that brings new products into medical practice. More importantly, it serves a critical educational role in our health care delivery system and is a vital extension of the process of searching for and developing new and better means of preventing and treating illness. Promotion and the dissemination of educational information ensures that the full benefits of the years of work, and enormous expenditure in terms of skills and money to discover and develop a new medicine, will be made available timely to patients. Currently the estimated cost to discover and develop a medicine is approximately R5 billion and it requires about 10 12 years to develop and register a new chemical entity, leaving approximately 8-10 years for product exclusivity to provide the necessary funding for future innovation. The medical representatives services are an important part of the process of ensuring that patients benefit from current and new medicines. Promotion is a useful element in the process whereby physicians and pharmacists become aware of and allow them to evaluate and decide on the selection of medicines. It is well known truism that no matter what the investment cost of a new medicine, it means absolutely nothing if the patient is not treated with it. Claims and comments made by manufacturers are based on medical and scientific evidence, approved by regulatory authorities, and conform to legal and ethical standards

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Promoting Medical Products in a Changing Healthcare Environment BY CIPLA

During the past few years, several medical product sponsors have acquired or entered into agreements with healthcare organizations or pharmacy benefits management companies (PBMs). Cipla often use such healthcare organizations/PBMs to promote their products, including the dissemination of promotional labeling and advertising. FDA generally does not exercise jurisdiction over materials disseminated by individuals or entities that are not in any way affiliated with a medical product sponsor. However, when a medical product sponsor is involved in promotional activities performed by healthcare organizations/PBMs, the sponsor should not be permitted to avoid regulation by changing the form through which their communications are accomplished. Accordingly, this document provides guidance to medical product sponsors by describing circumstances in which they may be held responsible for promotional activities performed by healthcare organizations/PBMs that violate the Federal Food, Drug, and Cosmetic Act (the Act) and regulations promulgated there under Generally, a medical product sponsor will be held responsible for promotional activities performed by its healthcare organization or PBM subsidiary that violate the Act or regulations (e.g., the dissemination of false or misleading labeling or advertising). Promotional labeling and advertising disseminated by the subsidiary are subject to the existing post marketing reporting requirements Under certain circumstances, a medical product sponsor may Subsidiary used herein is to be interpreted in its broadest sense to include any corporate relationship, in whole or in part, and a company unit, division, subsidiary company, or any other entity within or attached to a corporation. be held responsible for promotional activities performed by other persons (other than subsidiaries) that violate the Act or regulations. In determining whether violative promotional activities performed by non subsidiary healthcare organizations or PBMs are attributable to a medical product sponsor, the agency will consider a number of factors, including, among others, the relationship between the sponsor and the healthcare organization/PBM, and whether the sponsor has control of or influence over the activities of the

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healthcare organization/PBM or the content of the violative material disseminated by the healthcare organization/PBM. These factors are described below: 1. Relationship The agency will consider the nature of the sponsors relationship with the healthcare organization/PBM (e.g., whether that relationship is defined by a contract or other agreement). For example, if a contract between the sponsor and the healthcare organization/PBM to promote the sponsors product(s) exists, the sponsor will generally be responsible for promotional activities performed by the healthcare organization/PBM that are violative. 2. Control and Influence of Information Content and Distribution The agency will consider whether the sponsor has control of or influence over the promotional activities of the healthcare organization/PBM. For example, the agency will examine whether the sponsor scripted the disseminated information, targeted points for emphasis, or otherwise acted to control or influence the content of the information; whether individuals involved in designing or disseminating promotional materials are also involved in advising or otherwise assisting the sponsor with respect to sales or marketing of the sponsors product; whether similar messages are contained in promotional materials disseminated by the sponsor directly; whether the targeted audience was determined by the sponsors sales or marketing department; and whether any complaints have been raised regarding attempts by the sponsor to influence the content of disseminated information.

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Pharmaceutical marketing in cipla

Pharmaceutical marketing is the business of advertising or otherwise promoting the sale of pharmaceuticals or drugs. Evidence show that marketing practices can negatively effect both patients and the health care profession. Many countries have measures in place to limit advertising by pharmaceutical companies. The marketing of medication has a long history. The sale of miracle cures, many with little real potency, has always been common. Marketing of legitimate non-prescription medications, such as pain relievers or allergy medicine, has also long been 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 profession 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 hospitals. An important part of these efforts was marketing to medical students. Physicians are perhaps the most important players 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 pharmaceutical sales force. A medium-sized pharmaceutical company might have a sales force of 1000 representatives. The largest companies have tens of thousands of representatives around the world. Sales representatives called upon physicians regularly, providing information and free drug samples to the physicians. This is still the approach today; however, economic pressures on the industry are causing pharmaceutical companies to rethink the traditional sales process to physicians. Pharmaceutical companies are developing processes to influence the people who influence the physicians.There are several channels by which a physician may be influenced, including selfinfluence through research, peer influence, direct interaction with pharmaceutical companies, patients, and public or private insurance companies. There are also web based instruments that can be used to determine the influencers and buying motives of physicians. Cipla specialize in data and analytics for pharmaceutical marketing.

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Individual research Physicians 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 applications. They also rely upon pharmaceutical-branded e-detailing sites, pharmaceutical sales and non-sales representatives, and scholarly literature. Scholarly literature can be in the form of medical journal article reprints, often delivered by sales representatives at their place of employment or at conference exhibitions. Peer influence

Key opinion leaders

Key opinion leaders (KOL), or "thought leaders", are respected individuals, such as prominent medical school faculty, who influence physicians through their professional status. Pharmaceutical companies generally engage key opinion leaders early in the drug development process to provide advocacy and key marketing feedback.Some pharmaceutical companies identify key opinion leaders through direct inquiry of physicians (primary research).

Colleagues

Physicians acquire information through informal contacts with their colleagues, including social events, professional affiliations, common hospital affiliations, and common medical school affiliations. Some pharmaceutical companies identify influential colleagues through commercially available prescription writing and patient level data Doctor dinner meetings are an effective way for physicians to acquire educational information from respected peers. These meetings are sponsored by some pharmaceutical companies. Direct physician contact with pharmaceutical sales representatives Currently, there are approximately 200 pharmaceutical sales reps in the in Bangalore pursuing some 830,000 pharmaceutical prescribers. A pharmaceutical representative will often try to see a

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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 organization, 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 optimization, call planning, and sales forces effectiveness. 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 techniques 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 knowledgeable than primary care reps. Physician targeting Marketers attempt to identify the universe of physicians most likely to prescribe a given drug. Historically, this was done by measuring the number of total prescriptions (TRx) and new prescriptions (NRx) per week that each physician writes. This information is collected by commercial vendors. The physicians are then "deciled" into ten groups based on their writing patterns. Higher deciles are more aggressively targeted. Some pharmaceutical companies use additional information such as:

profitability of a prescription (script), accessibility of the physician, tendency of the physician to use the pharmaceutical company's drugs, effect of managed care formularies on the ability of the physician to prescribe a drug, the adoption sequence of the physician (that is, how readily the physician adopts new drugs in place of older, established treatments), and the tendency of the physician to use a wide palette of drugs influence that physicians have on their colleagues.

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Data for drugs prescribed in a hospital are not usually available at the physician level. Advanced analytic techniques are used to value physicians in a hospital setting. Opinion Leader Influence Mapping Alternatives to segmenting physicians purely on the basis of prescribing do exist, and marketers can call upon strategic partners who specialize in delineating which characteristics of true opinion leadership, a physician does or does not possess. Such analyses can help 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 plans for instance, ultimately advancing patient care. Sales force size and structure Marketers must decide on the appropriate size of a sales force needed to sell a particular portfolio of drugs to the target universe. Design the optimal reach (how many physicians to see) and frequency (how often to see them) for each individual physician. Decide how many sales representatives to devote to office and group practice and how many to devote to hospital accounts. Additionally, the customers are break into different classes, each classes are differtiate from their prescription behaviour and of course, their business potential. Private and public insurers Public and private insurers affect the writing of prescriptions by physicians through formularies that restrict the number and types of drugs that the insurer will cover. Not only can the insurer affect drug sales by including or excluding a particular drug from a formulary, they can affect sales by tiering, or placing bureaucratic hurdles to prescribing certain drugs. Direct marketing to patients Since the late 1970s, direct-to-patient marketing of prescription drugs has become important. Many patients will inquire about, or even demand to receive, a medication they have seen advertised on television. In the India, recent years have seen an increase in mass media advertisements for pharmaceuticals. Expenditures on direct-to-consumer (DTC pharmaceutical
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advertising) have more than quintupled in the last seven years since the FDA changed the guidelines, from $700 million in 1997 to more than $4.2 billion in 2005. Use of medical representatives for marketing products to physicians and to exert some influence over others in the hierarchy of decision makers has been a time-tested tradition. Typically, sales force expense comprises an estimated 15 percent to 20 percent of annual product revenues, the largest line item on the balance sheet. Despite this mammoth expense, the industry is still plagued with some very serious strategic and operational level issues.

STAGES OF MATURITY OF MEDICAL RERESENTATIVE

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Pharma Marketing Process and its Challenges IN CIPLA

While many pharmaceutical companies have successfully deployed a plethora of strategies to target the various customer types, recent business and customer trends are creating new challenges and opportunities for increasing profitability. In the pharmaceutical and healthcare industries, a complex web of decision-makers determines the nature of the transaction (prescription) for which direct customer (doctor) of pharma industry is responsible . Essentially, the end-user (patient) consumes a product and paysthe cost . Use of medical representatives for marketing products to physicians and to exert some influence over others in the hierarchy of decision makers has been a time-tested tradition. Typically, sales force expense comprises an estimated 15 percent to 20 percent of annual product revenues, the largest line item on the balance sheet. Despite this other expense, the industry is still plagued with some very serious strategic and operational level issues. From organizational perspective the most prominent performance related issues are enlisted below: a) .Increased competition and unethical practices adopted by some of the propaganda base companies. b). Low level of customer knowledge (Doctors, Retailers, Wholesalers). c). Poor customer (both external & internal) acquisition, development and retention strategies d). Varying customer perception. e). The number and the quality of medical representatives d). Very high territory development costs. f). High training and re-training costs of sales personnel. g).. Very high attrition rate of the sales personnel. h). Busy doctors giving less time for sales calls. i). Poor territory knowledge in terms of business value at medical representative level . j). Unclear value of prescription from each doctor in the list of each sales person. k). Unknown value of revenue from each retailer in the territory l). Absence of ideal mechanism of sales forecasting from field sales level, leading to huge deviations

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m). Absence of analysis on the amount of time invested on profitable and not-soprofitable customers and lack of time-share planning towards developing customer base for future and untapped markets. Patents Patents are a vital aspect of the global pharma industry. Patent protection is essential to spur basic R&D and make it commercially viable. But, only the developed nations endorse product patents. Most third world countries have patent laws but enforcement is totally lax. New Drug Approval (NDA) Prior to launching 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 registration process. WTO Due to pressure from the developed countries, across the world uniformity in patent laws is being implemented under WTO (World Trade Organization - earlier GATT i.e. General Agreement on Tariffs & Trade). Presently, different countries have different patent types and life period. WTO has decided upon 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 for 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 their new products. THE COMPETITION The level of competition on day to day basis in very high in Acute segment however the degree of competition in not as much as high in Chronic therapy area. As doctor has to prescribe drug for a long time in chronic cases and patient is suppose 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. CIPLA Business Strategies
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Whats the secret behind successes? For one, the company operates in niche formulations (chronic) segments such as psychiatry, cardiovascular, gastroenterology and neurology. While most of the top Indian companies have focused on antibiotics and antiinvectives (acute), CIPLA focused on therapeutic areas such as depression, hypertension and cancer. The company has introduced the entire range of products and has gained leadership position in each of these areas. Being a specialty company insulates CIPLA Pharma from the industry growth. The first quarter results for FY02 explain this to some extent. While the industry was affected to a large extent by a slowdown in the domestic formulations market, CIPLA logged a growth of 26% in revenue. The bases of marketing strategies can be best described in these two models in both acute and chronic segments: (i) Super Core Model involving the search for, and distribution of a small number of drugs from Chronic Threapy Area that achieve substantial global sales. The success of this model depends on achieving large returns from a small number of drugs in order to pay for the high cost of the drug discovery and development process for a large number of patients. Total revenues are highly dependant on sales from a small number of drugs. This model incorporates highly specialized approach in all the manner . Initially the competition is seems more at entry level but since growth is stable and more in this area ; every company is striving very hard to enter in this area. The major strategy in this model involves right focus to highly specialized customer by well trained team. (ii) Core Model in which a larger number of drugs from Acute Threapy Area are marketed to big diversified markets. The advantage of this model is that its success is not dependant on sales of a small number of drugs. Here presenting a large number of product and taking the advantage of opportunity cost is one of the important strategy. Other strategy includes daily reminders to cross the perceptual filter and get the brand name in to the sub-conscious state of mind . .

Marketing approaches of Super Core Model

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In pharmaceutical market there has been a significant shift from Acute towards Chronic Threapy area. Chronic segments are driving the growth of the market as leading prescribers in these segments are specialists as opposed to general practioners. This is evident from high growth rates achieved by firms like CIPLA , Dr.Reddy Laboratories and Dabur Pharma Ltd. Who have focused on these segments The doctor's prescription has become just the starting point in determining what drug the retailer dispenses. During last five years pharma companies have started identifying the hidden potential of oncological market also. A number of drugs have been launched into the oncological market by pharmaceutical companies, including new biological drugs and drugs that can be used as a support for patients undergoing cytotoxic chemotherapy. As a matter of fact, pharmaceutical companies are merging, and, through the merging process, the portfolio of the new companies changes. Medical representatives are rearranged throughout the new companies. Field force also required to ensure good availability of their products to convince doctors and PUSH their products i.e. from to Stockist to Retailer to Doctor. It has been observed that sometimes there are more than fifteen or sixteen representatives in a day are meeting with their customer and requesting for same type of products. Although field force visits are important for an update on drugs and their use. The doctors are, in general, sneaking away, trying to hide from sales representatives, since there are too many and they are too pushy and there is too little time, and the representatives probably have noticed that the reluctant doctors have always less time for short meetings and less interest and tend to reduce the time of the visit. SECONDARY SALES * 2 OPENING STOCK= ORDER The relationship between clinicians and representatives has always been good and pharmaceutical companies have provided, and still provide, the major economical support for customers' continuous medical education. Something needs to be done to find a

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solution to this problem that takes into account the needs of both pharmaceutical companies and their representatives on one side and physicians on the other, for a better professional interaction.

CIPLA PRODUCT DOING WEE IN THE MARKET

PRODUCT Farobact pruflox I pill viatran levozon crisanta maxiflo FOR Hiv disease Oral anti bacterial agent Contraceptive pill Gram negative bacteria Repiratory tract Pregnancy Asthama

MAJOR COMPETITOR OF CIPLA 1. RANBAXY 2. GLAXO SMITH KLINE 3. LUPIN 4. SERDIA 5. NOVARTIS 6. SUN PHARMA 7. AURBINDO PHARMA 8. CADILLA 9. BIOCON 10.TORRENT 11 ABOTT 12 PHARMED
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FINDINGS
Indian companies are putting their act together to tap the retail generic markets in the

regulated high margin markets of the developed countries. Due to its size, the US market will remain the most lucrative market for the Indian companies
Indian drug makers, with their chemistry skills and low-cost manufacturing, have an edge

in the business. Indian firms are arguably the worlds best in drug development (of both APIs and finished dosages). With their superiority established in process development, they are refining their legal skills to fight the innovator companies in patent challenges The other important ingredient is marketing/ distribution
Cipla Ltd holds its strength in Active Pharmaceutical Ingredients(APIs) and formulations

development and manufacturing in both the domestic and international markets. Cipla is also a major exporter of technology, which is presently sold to companies in Canada, Germany, UK, and USA, among others Medical representative play an important role to enhance the sale of a pharma company. Medical representatives are the key contacts between the pharmaceutical industry and the medical profession. They have the responsibility of promoting their companies major products directly to GP's and hospital doctors. They do this via face to face meetings or medical presentations at various types of meetings. All representatives tend to work what is a called a 'territory'. A territory is your area, or you and your territory team area. As sometimes companies have double manned territories rather than single manned territories. The territory size, geography etc varies according to companies. The day to day work of the representative tends to be target based around, sales, call rates and other objectives set around individual personal development plans
The image of the product and the company that a doctor forms is directly related to the

degree of professionalism of the medical representative.

Hospital doctors have an appointment system for seeing medical representatives. As so

many other companies are trying to see the same customers, MR should be well organize.

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CONCLUSION
There can be various ways through which a business organization can achieve success in the market, but all those ways can be comprised into as above, then it can be rightly said that it revolves specifically around three parties or more; the triangular linkages or the relationship between these three parties (company, customers and competitors) determine the success and failure of business organization. In the medium to long run, the domestic pharmaceutical market will be largely driven by the increasing prevalence of chronic segment. The domestic industry is principally being driven by the chronic segment which has grown by 17.8% this year. The basis of success in any competitive context can be, at the most, elemental level commercial success; and commercial success can be derived either from a cost advantage or a value advantage or ideally from a combination of both. In other words, the organization with Competitive Advantage tends to be the cost leader in the industry or a seller of most differentiated products amongst all the players. At last the role of supply chain is very prominent in both the phases (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 market 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 account segmentation. A company can use account segmentation to identify market segments Such as Acute & Chronic therapy market. which is well positioned to serve and then organize its product range and even SKUs and service in a superior way. Doing the management thesis was quite fruitfull and informative which made me understand the Indian pharma sector and understand the work of a medical representative in detailed manner.

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ANNEXURE(QUESTIONNAIRE)
NAME: AGE: GENDER: DESIGNATION: YEARS OF EXPERIENCE: Q1. How many doctors do you visit in a single day? 1. 1-5 2. 5-10 3. 10-15 4.15-20

Q2. How many chemist do you visit in a single day? 1. 1-5 2. 5-10 3. 10-15 5. 15-20

Q3. Who is the major customers for you? 1. Doctors 2. Chemist 3.both

Q4. How do you explain your products to doctors? 1. Verbally 2. Print bouchers 3.articles proofs
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Q5. Do you provide samples of medicine to your doctors for new product? 1. Regularly 2. Sometimes 3. Rarely 4. Never

Q6. Do you provide samples of medicine to the chemist? 1.Regularly 2.sometimes 3. Rarely 4.Never

Q7. How many products do you have to promote in a single day? 1. 1to5 2. 5-10 3.10-15 4. 15-20

Q8. Your company invests majorly to promote their product on which tool? 1.TV 2. Print 3.newspaper 4. Public relation 5.publicity 6.keeping more MR

Q9. How many doctors demands fringe benefits to promote your products?

1.80-100% 2. 60-80% 3. 40-60% 4.20-40% 5.1-20%

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REFERENCES WEBSITE REFFERED

http://www.cipla.com/ http://en.wikipedia.org/wiki/Cipla http://www.bharatbook.com/detail.asp?id=44690 http://www.iitk.ac.in/infocell/announce http://www.news.pharma-mkting.com/ http://www.pharmabiz.com/article/detnews www.allaboutmedicalsales.com

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