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INTRODUCTION

The pharmaceutical industry is the worlds largest industry due to worldwide revenues
approximately US$2.8 trillion. Pharma industry has seen major changes in the recent years that
place new demands on payers, providers and manufacturers. Customers now demand the same
choice and convenience from pharma industry that they find in other segment. Indian
Pharmaceutical Industry is poised for high consistent growth over the next few years, driven by a
multitude of factors. Top Indian Companies like Ranbaxy, DRL CIPLA and Dabur have already
established their presence.
The pharmaceutical industry is a knowledge driven industry and is heavily dependent on
Research and Development for new products and growth. However, basic research (Discovering
new molecules) is a time consuming and expensive process and is thus, Dominated by large
global multinationals. Indian companies have only recently entered the area. The Indian
pharmaceutical industry came into existence in 1901, when Bengal Chemical & Pharmaceutical
Company started its maiden operation in Calcutta.
The next few decades saw the pharmaceutical industry moving through several phases, largely in
accordance with government policies. Commencing with repackaging and preparation of
formulations from imported bulk drugs, the Indian industry has moved on to become a net
foreign exchange earner, and has been able to underline its presence in the global pharmaceutical
arena as one of the top 35 drug producers worldwide. Currently, there are more than 2,400
registered pharmaceutical producers in India. There are 24,000 licensed pharmaceutical
companies. Of the 465 bulk drugs used in India, approximately 425 are manufactured here. India
has more drug-manufacturing facilities that have been approved by the U.S. Food and Drug
Administration than any country other than the US. Indian generics companies supply 84% of
the AIDS drugs that Doctors without Borders uses to treat 60,000 patients in more than 30
countries.

The main purpose of doing this project was to know about the customer perception while buying
any drug or taking any medical facility. This helps to know in detail about consumer perception
towards pharmaceuticals company mainly Globus remedies Ltd. and Radico remedies right from
their inception stage, growth and future prospects.
It also helps in understanding consumer awareness towards pharma companies brands and
products, because this project is based on consumer perception

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Customer perception

Customer perception refers to how customers view a certain product based on their own
conclusions. These conclusions are derived from a number of factors, such as price and overall
experience. When it comes to influencing consumers to purchase a product, their perception of
the brand must be taken into account. This perception may vary based on the customer or a
certain demographic of customer. Customer perception can be developed from a variety of
factors, such as their own personal experience or how they have heard other people experienced
the product. The Internet has transformed how people experience brands and build their
perceptions. Social media and review websites provide access to reviews and details that help
customers form their own perceptions about brands and their products.

Establishing an emotional connection with customers by welcoming new customers and


following-up favorable customer reviews, questions and complaints with personalized messages
from a team member is a good way to engage customers. Another option is creating an online
community or forum to engage customers in conversations regarding the products and services
of the host business and other related businesses. It is important to include a range of
perspectives and content as opposed to self-promotion when using such platforms. Another good
tip for engaging customers is coordinating and using e-mail, direct mail and website content to
reach customers with the same message. Using multiple means of communication allows a
business to connect with a broader range of customers and to reinforce its message. Using
customer quotes on websites and posting valuable content on a regular basis are key to making
online efforts a successful part of customer engagement.

There are various few ways by which consumers perception can be affected:
1. Advertisements
2. Reviews.
3. Public Relations.
4. Social Media.
5. Personal Relations.
6. Other channels.
As a consumer we are all unique and this uniqueness is reflected in the consumption pattern and
process purchase. The study of consumer behavior provides us with reasons why consumers
differ from one another in buying using products and services. We receive stimuli from the
environment and the specifics of the marketing strategies of different products and services, and
responds to these stimuli in terms of either buying or not buying product. In between the stage of

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receiving the stimuli and responding to it, the consumer goes through the process of making his
decision.

STRENGTH WEAKNESS
Product diversity Low Prices
Extensive distribution network. Questionable practices
Corporate Social responsibility. Weak brand awareness
Successful marketing and Low profit margins
advertising
Complementary product sales
Proactive and progress

OPPORTUNITY THREAT
Increasing demand for medicines. Decreasing profit margins.
Further expansion through Strong dollar.
acquisitions. Strong competition.
Growing medicines and healthcare Government rules and
products consumption around the regulations.
world.

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OBJECTIVE OF THE STUDY
Every organization has to achieve its organization goals. For this it is very essential for an
organization to know about the view of consumers and their competitive products. This survey
research may also aimed as to estimate potential buyer for the product. The objective of the study
is as under:-

1. To know the market share of Globus remedies and Radico remedies.


2. To know the perception of customers regarding medicines.
3. To determine the customer satisfaction regarding medicines.
4. To determine the factors influencing the choice of customers regarding medicines.

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SCOPE OF THE STUDY
.
To carry out market survey of customer perception towards Globus
remedies and Radico remedies. For this purpose the geographical area
selected is East Delhi locality. Data is collected through a structured
questionnaire.
For conducting the research survey method is used among the Delhi area to know about
the perception of consumers towards Globus remedies ltd, and Radico remedies.
There were 50 respondents who are the regular consumers of medicines and drugs.

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COMPANY PROFILE

Globus remedies ltd. Is an ISO & GMP certified company of North India with more than 10
years of experience in the pharmaceutical formulations.
Under the able guidance of Dr. Anil Verma, a visionary and social activist with more than 20
years of medical experience, committed for welfare of mankind, Globus group was established in
the year 2000. Since then Globus has witnessed new horizons and achieved many landmarks.
Globus remedies ltd. operating manufacturing activities at the state-of-the-art plant in the
EXCISE FREE ZONE of Sansarpur Terrace, Himachal Pradesh. Our manufacturing area
spread over 50000 sq ft., amidst most picturesque valley in the Himalayas. Our organizational
capabilities and intent are strongly reflected in the products we manufacture. With highly
synchronized production facilities we are able to achieve desired results.

MS Globus Remedies Ltd. is a pharmaceutical marketing company based in capital city of India,
New Delhi. Its in the year 2010 they completed a decade of success and hard work. In the year
2000 they started the journey with a handful of products from a small town of U.P and today we
have made our presence felt in almost all states of India. Dr Anil Verma, a health care
professional, established this organization with a mission to develop & generate better health
services amongst the masses.
Globus office is located in the national capital region, Ghaziabad, U.P and our two
manufacturing divisions, Medirose Drugs & Pharmaceuticals and Globus Care Pharma, are
located at excise free zone of Sansarpur Terrace, Himachal Pradesh. At present they have more
than 500 products in their kitty.

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They cater to over 20 therapeutic areas that include Antibiotics , Analgesics , Antipyretics ,
Cardiovascular , Musculoskeletal , Central nervous system , Alimentary System , Respiratory
System , Hormonal , Metabolic and Nutritional Range & many other products in form of tablet ,
Capsule , Syrup , Suspension , Dry Syrup , Dry Injections , Ointments and Sachets. They are
GMP and ISO 9001-2008 certified and manufacture pharmaceutical formulations in accordance
with WHO norms.

COMPANIES & DIVISIONS

Globus Remedies
Incepted in the year 2000 as a marketing company with a wide product range. It also started
manufacturing food products in 2003.

Globus Health-care
Launched in the year 2004 as a marketing division. It offers comprehensive range of products in
various therapeutic areas.

Medirose Drugs and Pharmaceuticals-


Established in 2007, Medirose is a manufacturing unit of Globus. It is an ISO 9001-2008 & GMP
certified company. It manufactures Tablets, Capsules, Syrups and Injections.

Globus Care Pharma-

With the purpose to cater growing market of ointments and dry powder this plant was started in
the year 2008. It also produces Tablets, Capsules and Syrups.

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An organizations capabilities and intent are strongly reflected in the product it manufactures.
Using the finest manufacturing facilities Globus manufactures and markets a wide range of
products. Globus Remedies bears a commitment to develop its marketing practices in conformity
with the needs of their patients, physicians and business partners.

Medicines are effective only when used in an appropriate manner. Their sales and marketing
practices emphasize on educating health care professionals and consumers about their products
thus generating the right demand.
Globus policies are based on the principles of maintaining business ethics and compassion. We
believe in developing greater transparency and partnering to facilitate access to health care
information and medicines.
With a determined, diligent & efficient workforce, Globus Remedies is moving ahead to make
our motive a reality i.e. our mission, a healthy nation.

TOP PRODUCTS

CARQUE
MEGABOLPLUS
MEGAPREE
ROBITRAX
GLOZYME
LYCOMIN
GLOPAN
CALCIBUS
GLOCEF
SEROFIN
PANPRIDE

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FRANCHISE
Today, they are reckoned as one of the ecstatic Pharmaceutical Franchisee Services providers
based in India. We provide Franchisee for Pharma Company in national market. Their authorize
proven methods to their esteemed clients of starting up a business for some amount of fee and
profit. Their Franchisee Marketing services are the way with which they have spread their
business prospects in every nook and corner of the Nation.

TERMS AND CONDITIONS

Their expectation of Business will be Rs.50000 (Fifty Thousand) monthly from the area
allotted to you initially. It will be reviewed after four months.

The Party should work in allotted area only. Globus may cancel rights in case of any
infiltration outside allotted area.

Globus reserves all rights to change MRP, Trade price, discounts, net etc. without any
prior notice.

Payment should be given in advance.

Orders will be executed in full or in part, within 3 working days of placing the order,
depending upon the availability of stock and at the rates ruling on the date of execution.

Orders should be placed in writing by courier/post/ fax/ e-mail. D.L. No., C.ST. No. &
Road Permit (if applicable) / Waybill should be sent along with order.

Services of trained Marketing Professionals in Delhi for training of your representatives


will be provided free of cost. Lodging and meal for candidates will have to be born by you.

Promotional Material, M.R. Bags, Samples & Gifts will be provided at cost.

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Central Sales Tax @ 2% will be charged extra. Form must be submitted in advance for
each quarter of the financial year.

Company will have written agreement covering all the conditions, so that you are safe
and can operate freely in the assigned area for the years to come.

Company will provide special offer / volume discount or free goods from time to time
subject to sole discretion of the company.

You should preferably have Membership of Druggist & Chemist Association of your
area. Company will not share any expenses for local NOC or donation to association.

COMPANY CONTACT

Globus Office Address


14/11 , Site-4, Industrial Area,
Sahibabad, Ghaziabad (U.P) 201 010
Call - +91-120-4217614-17
+91-9212494127
+91-9212494368
+91-8427642618
+91-8527368286
Mail Id- globusremedies@yahoo.co.in , info@globusremedies.com

Medirose Drugs & Pharmaceuticals


51, Industrial Area, Phase-III,
Sansarpur Terrace (H.P) 256 501
Call - +91-01970-256206-07
Mail Id mdpglobus@gmail.com

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INDUSTRY PROFILE

The pharmaceutical industry develops, produces, and markets drugs or pharmaceuticals licensed
for use as medications. Pharmaceutical companies are allowed to deal in generic or brand
medications and medical devices. They are subject to a variety of laws and regulations regarding
the patenting, testing and ensuring safety and efficacy and marketing of drugs.

HISTORY

The earliest drugstores date to the middle Ages. The first known drugstore was opened by
Arabian pharmacists in Baghdad in 754 and many more soon began operating throughout the
medieval Islamic world and eventually medieval Europe. By the 19th century, many of the
drugstores in Europe and North America had eventually developed into larger pharmaceutical
companies.
Most of today's major pharmaceutical companies were founded in the late 19th and early 20th
centuries. Key discoveries of the 1920s and 1930s, such as insulin and penicillin, became mass-
manufactured and distributed. Switzerland, Germany and Italy had particularly strong industries,
with the United Kingdom, the United States, Belgium and the Netherlands following suit.
Legislation was enacted to test and approve drugs and to require appropriate labeling.
Prescription and non-prescription drugs became legally distinguished from one another as the
pharmaceutical industry matured. The industry got underway in earnest from the 1950s, due to
the development of systematic scientific approaches, understanding of human biology (including
DNA) and sophisticated manufacturing techniques.

RESEARCH & DEVELOPMENT

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Drug discovery is the process by which potential drugs are discovered or designed. In the past
most drugs have been discovered either by isolating the active ingredient from traditional
remedies or by serendipitous discovery. Modern biotechnology often focuses on understanding
the metabolic pathways related to a disease state or pathogen, and manipulating these pathways
using molecular biology or biochemistry. A great deal of early-stage drug discovery has
traditionally been carried out by universities and research institutions.
Drug development refers to activities undertaken after a compound is identified as a potential
drug in order to establish its suitability as a medication. Objectives of drug development are to
determine appropriate formulation and dosing, as well as to establish safety. Research in these
areas generally includes a combination of in vitro studies, in vivo studies, and clinical trials. The
amount of capital required for late stage development has made it a historical strength of the
larger pharmaceutical companies.
Often, large multinational corporations exhibit vertical integration, participating in a broad range
of drug discovery and development, manufacturing and quality control, marketing, sales, and
distribution. Smaller organizations, on the other hand, often focus on a specific aspect such as
discovering drug candidates or developing formulations. Often, collaborative agreements
between research organizations and large pharmaceutical companies are formed to explore the
potential of new drug substances. More recently, multi-nationals are increasingly relying on
contract research organizations to manage drug development.

THE COST OF INNOVATION

Drug companies are like other companies in that they manufacture products that must be sold for
a profit in order for the company to survive and grow. They are different from some companies
because the drug business is very risky. For instance, only one out of every ten thousand
discovered compounds actually becomes an approved drug for sale. Much expense is incurred in
the early phases of development of compounds that will not become approved drugs. In addition,
it takes about 7 to 10 years and only 3 out of every 20 approved drugs bring in sufficient revenue
to cover their developmental costs, and only 1 out of every 3 approved drugs generates enough
money to cover the development costs of previous failures. This means that for a drug company
to survive, it needs to discover a blockbuster (billion-dollar drug) every few years. Drug
discovery and development is very expensive; of all compounds investigated for use in humans
only a small fraction are eventually approved in most nations by government appointed medical
institutions or boards, who have to approve new drugs before they can be marketed in those
countries. In 2010 18 NMEs (New Molecular Entities) were approved and three biologic by the
FDA, or 21 in total, which is down from 26 in 2009 and 24 in 2008. On the other hand, there
were only 18 approvals in total in 2007 and 22 back in 2006. Since 2001, the Center for Drug
Evaluation and Research has averaged 22.9 approvals a year. This approval comes only after
heavy investment in pre-clinical development and clinical trials, as well as a commitment to
ongoing safety monitoring. Drugs which fail part-way through this process often incur large
costs, while generating no revenue in return. If the cost of these failed drugs is taken into
account, the cost of developing a successful new drug (new chemical entity, or NCE), has been
estimated at about 1.3 billion USD (not including marketing expenses). Professors Light and
Lexchin reported in 2012, however, that the rate of approval for new drugs has been a relatively
stable average rate of 15 to 25 for decades.

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Industry-wide research and investment reached a record $65.3 billion in 2009. While the cost of
research in the U.S. was about $34.2 billion between 1995 and 2010, revenues rose faster
(revenues rose by $200.4 billion in that time).

CONTROVERSIES

Due to repeated accusations and findings that some clinical trials conducted or funded by
pharmaceutical companies may report only positive results for the preferred medication, the
industry has been looked at much more closely by independent groups and government agencies.
In response to specific cases in which unfavorable data from pharmaceutical company-sponsored
research was not published, the Pharmaceutical Research and Manufacturers of America have
published new guidelines urging companies to report all findings and limit the financial
involvement in drug companies of researchers.US congress signed into law a bill which requires
phase II and phase III clinical trials to be registered by the sponsor on the clinicaltrials.gov
website run by the NIH.Drug researchers not directly employed by pharmaceutical companies
often look to companies for grants, and companies often look to researchers for studies that will
make their products look favorable. Sponsored researchers are rewarded by drug companies, for
example with support for their conference/symposium costs. Lecture scripts and even journal
articles presented by academic researchers may actually be "ghost-written" by pharmaceutical
companies.
Researchers who have tried to reveal ethical issues with clinical trials, or publish papers showing
harmful effects of drugs and who saw themselves as whistleblowers have faced or been
threatened with lawsuits from drug companies, or have lost their jobs. For example, Dutch
medical researcher Dr. Koos Stiekema was sued by the pharmaceutical company Organon for
violating his confidentiality agreement, after he discussed his concerns about a clinical trial
design with three ethics committees in 1999. Organon's other experts agreed that the trial design
was safe, and a court in Amsterdam awarded Organon 550,000 for the trial-delay costs that
resulted from Stiekema's disclosures. The award was overturned on appeal; the court ruled that
Stiekema's breach of confidentiality was "justified by a higher interest. In the United States,
corporate whistle blowers are given a percentage of any fines levied.
Since 2008, pharmaceutical companies have been increasing the cost of name-brand
prescriptions to offset declining revenues as out-of-patent drugs become available as generics.
Simultaneously, pharmaceutical manufacturers are taking increasing advantage of tax havens to
avoid taxation.

PATENTS & GENERICS

Depending on a number of considerations, a company may apply for and be granted a patent for
the drug, or the process of producing the drug, granting exclusivity rights typically for about 20
years. However, only after rigorous study and testing, which takes 10 to 15 years on average,
will governmental authorities grant permission for the company to market and sell the drug.
Patent protection enables the owner of the patent to recover the costs of research and
development through high profit margins for the branded drug. When the patent protection for
the drug expires, a generic drug is usually developed and sold by a competing company. The
development and approval of generics is less expensive, allowing them to be sold at a lower
price. Often the owner of the branded drug will introduce a generic version before the patent

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expires in order to get a head start in the generic market. Restructuring has therefore become
routine, driven by the patent expiration of products launched during the industry's 'golden era' in
the 1990s and companies' failure to develop sufficient new blockbuster products to replace lost
revenues.

MERGERS, ACQUISITIONS, & CO-MARKETING OF DRUGS

A merger, acquisition, or co-marketing deal between pharmaceutical companies may occur as a


result of complementary capabilities between them. A small biotechnology company might have
a new drug but no sales or marketing capability. Conversely, a large pharmaceutical company
might have unused capacity in a large sales force due to a gap in the company pipeline of new
products. It may be in both companies' interest to enter into a deal to capitalize on the synergy
between the companies.

MARKETING

Pharmaceutical companies commonly spend a large amount on advertising, marketing and


lobbying. In the US, drug companies spend $19 billion a year on promotions. Advertising is
common in health care journals as well as through more mainstream media routes. In some
countries, notably the US, they are allowed to advertise directly to the general public.
Pharmaceutical companies generally employ sales people (often called 'drug reps' or, an older
term, 'detail men') to market directly and personally to physicians and other health care
providers. In some countries, notably the US, pharmaceutical companies also employ lobbyists
to influence politicians. Marketing of prescription drugs in the US is regulated by the federal
Prescription Drug Marketing Act of 1987.
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. These five public sector drug-manufacturing units under the Ministry of Chemicals and
Fertilizers are: Indian Drugs and Pharmaceutical Limited (IDPL), Hindustan Antibiotics Limited
(HAL), Bengal Immunity Limited (BIL), Bengal Chemicals and Pharmaceutical Limited (BCPL)
and Smith Stan Street Pharmaceutical Limited (SSPL). In addition, there are a number of
pharmaceutical manufacturing units under the control of state governments such as Goa
Antibiotics Ltd. and Karnataka Antibiotics Ltd. For the next 60 years, most of the drugs in India
are 24,000 licensed pharmaceutical companies. Of the 465 bulk drugs used in India,
approximately 425 are manufactured here.

In future it will be a growth period of the Indian Pharmaceutical Industry. The growth is expected
to emerge from three major areas:
1. Contract research and development services.
2. Export led business of generics and bulk drugs and
3. Growth in specialty therapeutic areas in the domestic market.

ADVANTAGE INDIA

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As regards the pharmaceutical marketing in the world, India is becoming one of the front runner
destinations because of its second largest population in the world, the pace of development of its
economy, adoption of Technological advancements, economical medical treatment cost and also
availability of world renowned physicians etc. Following are the advantages of Indian Health
care Scenario: Competent workforce: India possesses a skillful work force with high managerial
and technical competence.
Cost-effective chemical synthesis: The track record for development, particularly in the area of
improved cost-beneficial chemical synthesis for various drug molecules is excellent. Legal and
Financial Framework: India is a democratic country with a solid legal framework and strong
financial markets. There is already an established international industry and business community.
Information and Technology: It has a good network of world-class educational institutions and
established strengths in Information Technology. Globalization: The country is committed to a
free market economy and globalization. Above all, it has a 70 million middle class market, which
is constantly growing.
CONSOLIDATION

After many years, the international pharmaceutical industry has discovered great opportunities
in India. The process of consolidation, which has become a popular phenomenon in the world
pharmaceutical industry, has started taking place in the Indian pharmaceutical industry as well.
BOOMING SALES India is gaining importance as a manufacturer of pharmaceutical. Between
1996 and 2006, sales of pharmaceutical were up by 9% per annum and thus expanded much
faster than the global pharmaceutical market as a whole. Demand in India is growing markedly
due to rising population figures, the increasing number aging population and the development of
incomes. As 109 a production location, the country is benefiting from its wage cost advantages
over western competitors, when it comes to producing medicines.
MEDICAL TOURISM

The concept of medical tourism is an age old concept. In this digital era, half a million people
travel across the globe for health purposes. People from developed and affluent countries are
moving out of their own countries to other destinations, seeking solitude, natural and holistic
remedies and Eco friendly experiences. Medical Tourism is one such new area that is ripe with
potential. Medical travel: When an individual travel across the border and outside ones
customary environment to seek health care services. Medical Tourist: Upon arrival, such an
individual is called a medical tourist. Medical Tourism: Traveling to a destination in another
country to receive medical, dental and surgical care because the destination enables better access
to care, provides higher quality care or offers the same treatment at a more affordable price. India
is economical medical tourism hub, major or minor, and is equal to the major hubs in terms of
quality of staff and equipment. Prices average at a fifth of the United States, with particular deals
in dentistry and diagnostic imaging, which approach a tenth the price. India deals with a higher
proportion of major surgery tourists than minor surgery and checkup tourists than the other major
hubs, which has given rise to specialist hospitals across India .These hospitals are far out of the
reach of most Indians and cater specifically to foreign tourists for very specific needs for
example some 110 centers will focus strongly on the heart surgery while others will deal with
joint replacement. Medical tourism is actively promoted by the governments official policy.
Indias National health policy 2002, for example, says, To capitalize on the comparative cost
advantage enjoyed by domestic health facilities in the secondary and tertiary sector, the policy

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will encourage the supply of services to patients of foreign origin on payment. The rendering of
such services on payment in foreign exchange will be treated as deemed exports and will be
made eligible for all fiscal incentives extended to export earnings. Best hospitals for medical
tourism in India: The list is not exhaustive but illustrative.
1) Apollo Hospital, Chennai
2) Indraprastha Apollo Hospitals, New Delhi
3) Escorts heart Institute and Research Center, New Delhi
4) Max Super Specialty Hospital, New Delhi
5) Wockhardt Hospital and Kidney Institute, Kolkata

DEVELOPMENT OF INDIAS PHARMACEUTICAL INDUSTRY

Up until the 1970s, Indias pharmaceutical market was mainly supplied by large international
corporations. Only economical bulk drugs were produced domestically by state-owned
companies founded in the 1950s and 60s with the help of the World Health Organization (WHO).
These state-run firms provided the foundation for the sectors growth since the 1970s. Back then,
Indian government aimed to reduce the countrys strong dependence on pharmaceutical imports
by flexible patent and to create a self-reliant sector. In addition, it introduced high tariffs and
limits on imported medicines and demanded that foreign pharmaceutical companies reduce their
shares in their Indian subsidiaries to two-fifths.

Large Market Share for Generic Drugs

As there was no efficient patent protection between 1970 and 2005, many Indian drug producers
copied expensive original preparations by foreign firms and produced these generics by means of
alternative production procedures. This proved more cost-efficient than the expensive
development of original preparations as no funds were required for research, which contained the
financial risks. This spending may come to as much as EUR 600 m for only one drug. This kind
of money could previously only be raised by large corporations in the industrial countries. The
competitiveness of generics producers is based on cost-efficient production. In this field, Indian
companies are currently in top position. At 119 one-fifth, Indias share in the global market for
generic drugs is considerably higher than its share in the overall pharmaceutical market (approx.
2%). At the same time, Indias pharmaceutical companies gained know-how in the manufacture
of generic drugs. Hence the name pharmaceutical cy of the poor which is frequently applied to
India. This is of significance for the domestic market as disposable income is as little as EUR
1,900 per year for roughly 140 million of the total of 192 million Indian households, which
means the majority of Indians, cannot afford expensive western preparations.

Exports of Pharmaceutical Products

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In 2006, Indias pharmaceutical industry exported products worth EUR 3 billion, up from only
EUR 650 m in 1996, which was due to the fact that demand for low-cost generic drugs is
strongly on the rise, above all in the US, Europe and Japan. At 22%, export growth in 2006 was
even twice as high as the global average and in Germany (roughly 11% each). Meanwhile,
Indias export ratio has reached 32% about double the figure registered ten years ago. For some
time now, India has exported more pharmaceutical products than it imports. Over the last ten
years, the export surplus has risen from about EUR 370 m to currently just under EUR 2 billion.
Slightly over 80% of the drugs are sold to the US and Europe, where Indian companies are
benefiting from the populations purchasing power as well as regulatory changes (greater cost-
consciousness). By contrast, traditional sales markets such as Russia, Southeast Asia, Africa and
Latin America have lost its importance. However, only 60 production locations of Indias
pharmaceutical sector have been certified by the World Health Organization, which implies they
comply with the strict quality standards imposed by the US Food and Drug Administration
(FDA), Compliance with FDA standards is the precondition for selling products on the important
US market.

POPULATION GROWTH AND PHARMACEUTICAL BUSINESS IN


INDIA

Indias pharmaceutical sector is receiving a major boost from population growth. According to
UN estimates, the population total looks set to rise from 1.1 billion at present to 1.4 billion in
2020. Up until 2020, India will see as many children being born as there are people living in
Germany, France, the UK and Italy together. By 2025, India will probably have overtaken China
as the world's most populous Country. Its population growth results, not least from higher life
expectancy. This is attributable, among other things, to improved preventive health care. Of
course, though, average life expectancy in India is still markedly lower than in western countries.
While the figure is 64 years for men and 66 years for women in India, life expectancy in
Germany is 76 years for men and 82 years for women. The ageing of the population in India
offers considerable market opportunities. According to a UN estimate, the share of people over
the age of 65 in the total population will rise from 5% currently to 8% in 2025. This would mean
roughly 55 million more people aged 65 and over, than today. As a result, typical age-related
illness will be wide spread.

Upcoming Extra-Urban Markets in India Rural Market Coverage

Indian pharmaceutical companies are eyeing the global markets and employing tactics to grab a
piece of the international consumers' wallet. But for long, rural market in India was unattended
by most of the pharmaceutical companies. The top companies cover over 80% in urban markets
but rural reach is around 30% whereas 70% of Indian population stays in rural market. This fact
is been realized by most of pharmaceutical companies and thus they have started focusing now
on rural coverage either through the separate division or through existing field force.
Marketing Activities of Pharmaceutical Companies in Rural Areas
Rural marketing activities of many pharmaceutical companies have been traditionally restricted
to markets with stocks of the concerned product; and stocking them with the chemists or
dispensing doctors. Not much emphasis was given to employing novel marketing strategies to
woo the rural Indian doctors and patients. The pharmaceutical industry as such needs a lot of

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facilities and experts. As these facilities and experts are available only in the urban areas, our
market comprises predominantly of urban areas (70 percent of the total market) and hardly 30
percent in rural areas. About 70 percent of India resides in villages, which (according to various
sources) comes approximately to 74, 26,17,747 of the whopping 1.1 billion of the total Indian
population. In India, only 30 percent of the population has access to quality medicines and the
treatment gap in almost 122 every chronic disease segment is more than 65 percent. Therefore,
the opportunity is huge. The best and the largest of pharmaceutical companies used to reach only
Class 1 and II towns. Still in many pharmaceutical companies, marketing in the villages possibly
includes some unplanned taxi tours or they leave it to the stockiest network to make the goods
available without any doctor promotion in the rural areas. Hence, the villages present a huge
untapped market. The rural market is indeed very large and is growing. There is an estimated 20
million middle class households spread across 6, 00,000 villages in rural India, which is equal to
the number of middle class households in urban India. In addition, the disposable income in rural
India is much more as compared to urban areas. Food, shelter and primary education are virtually
is spent on these. As a consequence, the spend on health care in rural India is also increasing.

THE RURAL MARKET AREA

Given the potential of the rural markets, these days, companies are more open to reaching the
rural consumer than even before. However, most of the products that are being advertised and
marketed aggressively are the low risk-low involvement products like pain balms, lozenges,
cough and cold syrups. The high risk-high involvement products like cardiac or cancer products
are not advertised or marketed through media as regulations 123 prevent this. However,
companies have often taken the community-welfare route to educate the rural consumers about a
particular disease segment and make them aware of the treatments available. Companies are
conducting health care workshops in the rural areas by tapping the doctors there. Such
programmes offer mutual advantages to both the parties concerned. The doctors benefit through
the increased footfall of prospective patients and companies benefit through the brand awareness
and possibility of increased prescriptions. For instance, Sorento Health care Communications has
been associated with Piramal Health Care (PIL) for over the last two years for an Epilepsy
outreach programme launched under the banner 'Reach More, Teach More'. With an 85 percent
treatment gap in epilepsy management in India, PIL was keen to make the most of the
opportunity by spreading its reach to towns beyond their current coverage. Strepsils lozenges has
chosen to build brand awareness in the villages through traditional means like billboards at bus
stands, branding buses, hoardings, promotions at jatras and melas.High fundas of metro
marketing do not work in rural markets and companies should focus more on what the rural
customer/consumer understands and what he likes. One of the strategies implemented by the
company is by organizing a 'healthy baby' contest.

A good example of rural promotion of health care products is the Goli Ke Humjoli Campaign,
which helped trigger the sales of a whole range of oral contraceptive brands. The entire market
grew by a good 22 percent and created an excellent platform for low-priced contraceptives in
India.

18
LITERATURE REVIEW

A Boom for Online Medicine India

Getting medicines is being the challenge in todays hectic schedule for every working
professional as the retail stores opens from 10AM to 10 PM which is exactly the working timing
for majority of us and due to which some time we skip our required medications too calling on
retail store does not guaranties us that we will be getting our medicines. In an age where we buy
even our groceries online, aspiring entrepreneurs saw this as an opportunity to jump in the sector
of online pharmacy, however Indian Drug and Cosmetic act was created in 1940 they didnt
mention anything related to online pharmacy since they did not see internet coming as this big.

There has been several question about legality of selling drugs online and there has been couple
of ban in few online pharmacy too. Amit Nigam Founder of Drugvilla said Online pharmacy is

19
a revolutionary change to how Indian buy medicines and will change their perception to look for
alternative generic substitute there are medicines. Substitutes are always been the questions to
buy of not. The basic difference has been to the quality index and weather they will suffice the
requirements or not. Drug villas find substitute option help user to see alternate drugs with the
price comparison and there sometimes a variation of 50-90% of the actual cost of the medicine.

Drug villa helps you to find exact substitute from brands like Cipla, Lupin, GSK, Torrents as
they are the companies you can trust with the quality standards .Drugvilla operating on brick and
click model as of now caters Delhi NCR and with the capital funding of 75000 USD from parent
company Akcent India Group. Is majorly focused with the medicine marketing companies and is
being the good help in there availability on discounted prices. The business model of Drugvilla
to directly delivering medicines to either hospital exit gates or patients convenient places with
both pre and postpaid order has been successful so far with the referral programs being initiated
with Medanta Medicity and Mediclinic. We are getting near about 70 to 80 orders a day with the
average value of order being 2500 INR resulting in daily online sales of 175000 to 200000 INR,
and with the profit amount we are planning to expand our services to all metro cities in India
majorly catering corporate hospital patients. Said Amit.

RESEARCH PAPER
Sunil mani, editor
It is generally held that firms in developing countries such as those in India does not necessarily
innovate in the sense of doing R&D that results in the release of new products and processes. At
best they are assumed to be introducing incremental innovations defined as adaptation-of known
technologies to local conditions as these may be new to the Indian firms although not new to the
universe in which these firms are located. Consequent to this line of thinking measuring
innovation using conventional indicators such as R&D expenditures, patent grants, technology-
content of exports has always been problematic. Although this is the general rule, there are
certain notable exceptions in terms of firms creating new technologies on their own. The
pharmaceutical industry in India, despite the copycat image that is heaped on it rightly or
wrongly, has managed to be one of the most innovative among the country's manufacturing
establishments. Indian pharmaceutical companies enjoyed two 'home-grown' advantages namely,

20
much cheaper manufacturing facilities and world-class medicinal chemistry skills, honed by
years of reverse engineering. The industry is currently one of the fastest growing and is a major
recipient of US patents. For such an industry, the concept of a sectoral system of innovation
makes eminent sense. Against this perspective, the purpose of this paper is to attempt at mapping
out the sector system of innovation of India's pharmaceutical industry. Such an exercise would
allow us to identify the sources of innovation in the industry. The paper is structured into four
sections. The first section outline some important features of this industry. The second section
maps out the sectoral system of innovation (SSI) of the industry and focuses on three
components of the SSI. The third section measures the performance of the innovation system in
terms of a number of, albeit, conventional indicators. The fourth and concluding section sums up
the main findings of the paper.

Features of India's pharmaceutical industry


The pharmaceutical Industry in India is one of India's foremost science-based industries with
wide ranging capabilities in the complex field of drug manufacture and technology. The country
produces pharmaceutical formulations and over 400 active chemicals used in the
manufacturing of drugs (namely Active Pharmaceutical Ingredients). A wide range of
pharmaceutical machinery too is available in the country. The value of the
pharmaceutical market in India was U.S.$ 6.0 billion in 2004 representing two per cent of
global market, and ranking fourth in terms of volume and thirteenth in value terms. .The
industry has been exhibiting an excellent growth performance especially over the last
decade. The structure of the industry is such that that an entire range of firms according to
type of ownership (foreign and Indian) and according to scale (large, medium and small)
occupy the manufacturing landscape of this industry. The industry has three key characteristics
that are worth examining:
The industry is dominated by formulations;
The industry is very active in the world-wide market for generics; and
The country is self-sufficient in most drugs as judged by a growing positive trade balance;

Domination of formulations
The Indian pharmaceutical industry is divided into two broad categories on the basis of
form/usage into bulk drugs1 and formulations. The industry is dominated by formulations.
Although it is the development of the bulk drugs sector that is actually the most important
achievement of the pharmaceutical industry in India and it has led to the transformation of the
industry.

Growing contract research


There are two dimensions to this. First, is R&D outsourcing by Western MNCs to Indian entities
and second is the growth of clinical trials. R&D outsourcing is being done primarily to
minimize the expenses, time and risk involved in R&D. The estimations from industry sources
reflect that the cost of bringing one new molecule into the market amounts to USD 1 billion. The

21
European Federation of Pharmaceutical Industries and Associations (EFPIA) estimates that, on
an average out of 10,000molecules developed in laboratories, only one or two will successfully
pass all stages of drug development and be commercial. Pharmaceutical companies looking
for effective solutions, thus, prefer outsourcing to low-cost, developing countries rather than
persisting with expensive R&D efforts in the West. Alliances with local companies, contractual
outsourcing arrangements and establishing local subsidiaries37are good options for enterprises
thinking of utilitarian the strong intellectual potential in India and indeed in China too.
"Contract research organizations (CROs) are a popular option and carry out medical and
scientific studies on a contractual basis for multiple clients," says Frost& Sullivan Industry
(http://pharmaceuticals.frost.com). These outsourcing activities in developing countries amount
to 20.0 to 30.0per cent of total global clinical trials. Access to specialized skills in both
countries and work hours on a 24/7 basis underpins their competitive advantage. In addition,
better management from the start reduces development risks. Recent amendments to Schedule Y
of Drugs and Cosmetics Rules of India, 1945, signify a progressive attitude on the part of the
Indian Government, clarifying the environment for clinical research in the country attain
international standards in pharmaceutical research. India, at the moment, is the most preferred
destination for clinical research because of its heterogeneous huge but treatment patient
population; English-speaking western educated investigators (physicians) and track record of
sincerity in meeting regulatory and recruitment, and most importantly well accepted good
quality auditable data. While the global pharmaceutical companies are increasing their clinical
trial investments in India, many small and big regional Pharma companies are considering
India in their drug development initiatives. There is a perceptible change in the old mindset of
people - from skepticism to acceptance - of the capability, skill-sets and quality of data in Indian
trials. Cost-effectiveness, competition and the increased confidence on capabilities and skill
sets have propelled many global pharmaceutical players (Pfizer, Novartis, Astra Zeneca,
Eli Lilly, GSK, Aventis, Novo Nordisk to name but a few) to expand their own clinical research
investment and infrastructure in India. Evaluating the business progression and futuristic
projections of top notch services firm like38Ernst & Young, McKinsey, Strategic Associates etc.,
while global pharmaceutical companies and Contract Research Organizations (CRO)
are opening up their branches / offices, the small bio-tech, pharmaceutical and Research
and Development (R&D) companies are looking for preferred partners to conduct their
research activities in India. The report captures the striking regulatory change i.e. the
amendment of Schedule Y (2005), which is a step towards harmonizing the Indian
regulatory framework with international Good Clinical Practice (GCP) for all the
stakeholders in clinical research including the sponsors, CROs, Site Management
Organizations (SMOs), Institutional Ethics Committees (IECs), Investigators and the
subjects participating in clinical trials in India
The country can accommodate these business expansions because of the availability of huge
talent pool of Investigators and clinical research professionals India's growth in pharmaceutical
and bio tech manufacturing, and contract research supported by IT skills has led to promising
out sourcing in various other segments including Clinical trial data management,
statistical analysis. The clinical research industry in the country is currently valued at$100
million ( 83 million) and is almost doubling each year, reflecting the shifting focus of the

22
pharmaceutical outsourcing industry to Asia. The findings are published in a recent report
analyzing the clinical research industry and 33 leading contract research organizations (CROs) in
India, put together by US pharmaceutical consulting firm, Proximare12.A previous barrier to
outsourcing to India has been that accompanied worried about probable loss of control in
processes and proprietary12 In fact there are no official sources of data on the number of contract
organizations in India.39knowledge and delays due to regulatory hold-ups. Recent
amendments to Schedule Y of Drugs and Cosmetics Rules of India, 1945, signify a
progressive attitude on the part of the Indian Government, clarifying the environment for
clinical research in the country. Executives at large and small pharmaceutical and bio tech
companies are increasingly becoming intrigued about India and how they can leverage it to
launch high quality products in a quicker and more cost-effective manner.

Mainak Mazumdar
The Indian pharmaceutical sector flourished under the process patent regime of 1970 with
supportive policies of the government of India that were in force for more than four decades.
Taking flexible provisions of the patent act of 1970 (that recognized only process patent), the
Indian firms reverse-engineered the patented innovative products. In most cases, they could
eventually come out with better version for the same products. The comparative advantage of the
industry was therefore an outcome of the patent act of 1970, which facilitated the Indian
producers to create a niche for themselves (Chaudhuri, 1997, 1999; Kumar and Pradhan, 2002).
This situation has however, changed in the recent past. Under the Trade Related Aspect of
Intellectual Property Right (TRIPS), India amended the Patent Act of 1970 first in 1995, and
subsequently in 2005, thereby paving the way for product patenting. Secondly, as a part of the
liberalization policy of 1991, the Drugs and the Cosmetic Act was also amended. The amended

23
act abolished the industrial licensing requirements for all varieties of drugs and reduced the
scope of price control. The act also paved the way for removal of trade restriction with automatic
approval for foreign ownership up to 100 percent and foreign technology arrangement. While
these changes have brought forth increased competition in the pharma sector from the
multinational enterprises (MNEs), it has also opened new opportunities for the Indian
pharmaceutical firms. In order to compete effectively with the MNEs Indian firms need to
change their age-old strategies. The new emphasis of the domestic firms should be on research
and development (R&D) to come out with new products or process, to shift its operational base
in the global market, to integrate with the raw-material industry and reduce transaction cost at
different stages of manufacturing. In addition, they can also consider collaboration with foreign
firms or merger with firms that allows vertical integration. The implementation of some of these
moves however, requires new investment in plant and machinery. Consequently, a large number
of small firms that largely populates the Indian pharmaceutical industry may not be able to adopt
such strategies. Hence, they may not remain competitive. The important question that arises in
this context is whether the small firms are indeed left behind in the process of competition, on
the other hand, large firms that have adopted some of the new policies for future development
have actually succeeded. More specifically, we wish to examine whether in the liberalized
regime only a handful of firms, performed better in maximizing its output while many others
have lagged behind. This can be studied by undertaking an efficiency analysis. In efficiency
analysis, we estimate a frontier with the input output bundle of the best performing firms in the
sample. Any shortfall of output that a firm produces with the one that is given by the frontier is
its inefficiency. In a sense, the efficiency of the firms captures their ability to catch up with the
best performing firms in the sample that employ similar level of inputs. Apart from measuring
the efficiency of the firms we also compute the productivity of the firms in our paper. The
productivity of a firm defined as the ratio of output to the level of inputs it employs is also
closely related to efficiency.

A change in the productivity can happen through two routes; one is the change in efficiency in
the level of production and the other is the technological change. While the former is understood
as the ability of an inefficient firm to catch up with the frontier firms, the latter is understood as
the shift in the production possibilities of the frontier firms itself due to technological innovation.
Thus by undertaking productivity analysis,we can assess to what extent the firms in the industry
has experienced technological innovation by investing in R&D or by installing advanced plants
and machinery. We can also analyze whether such innovation has increased the efficiency gap
between the frontier firms and other firms in the sample. A few authors have so far concentrated
on the efficiency issue in the context of Indian pharmaceutical industry. Using firm level data for
the period 1990 to 2001, Chaudhuri and Das (2006) estimated the efficiency of the Indian
pharmaceutical sector using the parametric frontier approach. The study has shown that the mean
efficiency scores of the industry have improved over the subperiod 1999 to 2001 against the

24
sub-period 1990-1998. Further, it identifies that large sized firms or firms exporting more of their
product in the international market have reduced their inefficiency. The non-parametric DEA
approach has also been applied by Majumder (1994), Saranga, and Phani (2002) to study the
output efficiency of the Indian pharmaceutical sector. Majumder (1994) studied the capabilities
and resource utilisation of the firms by employing the DEA methodology. The study however
covers only nine large firms and use data at the pre-liberalization era. The higher level of
inefficiency of the public sector firms as compared to the private players are the main findings of
the study. In this paper, we wish to explore the efficiency related issues by not only estimating
the efficiency of the pharmaceutical firms but also their technological and the productivity
changes. More precisely, we would like to examine how the adoption of new strategies affects
the efficiency and technical change of the firms. Also, the existing studies do not consider the
fact that access to technology may differ across the firms due to investment in R&D, or due to
small scale of operation. A single frontier is often constructed by considering all firms in the
industry to compute their efficiency levels. The present study evaluates the relative efficiency of
the Indian pharmaceutical firms by acknowledging the differences in their investment capacity.
This has been achieved by estimating its efficiency relative to a group specific frontier as well as
the global frontier. By adopting this new approach, the paper contributes to the applied empirical
research.

Joel Lexchin, associate professor


Clinical research sponsored by the pharmaceutical industry affects how doctors practice
medicine.1 An increasing number of clinical trials at all stages in a product's life cycle are funded
by the pharmaceutical industry,2 3 probably reflecting the fact that the pharmaceutical industry
now spends more on medical research than do the National Institutes of Health in the United
States.4 Most Pharma economic studies are either done in-house by the drug companies or
externally by consultants who are paid for by the company.
Results that are unfavorable to the sponsorthat is, trials that find a drug is less clinically
effective or cost effective or less safe than other drugs used to treat the same conditioncan

25
pose considerable financial risks to companies. Pressure to show that the drug causes a favorable
outcome may result in biases in design, outcome, and reporting of industry sponsored research.7
A recent systematic review of the impact of financial conflicts on bio medical research found that
studies financed by industry, although as rigorous as other studies, always found outcomes
favorable to the sponsoring company.8 However, this review looked for papers published only in
English, excluded reports in letters and abstracts, and looked at studies funded by other
industries. We reviewed the relation between the source of funding of the research and the
reported outcomes and investigated whether quality of the methods in studies funded by
pharmaceutical companies differs from that in other studies.

Methods
Study selection
We included only studies that specifically stated that they analyzed research sponsored by a
pharmaceutical company, compared methodological quality or outcomes with studies with other
sources of funding, and reported the results in quantitative terms. Outcomes of interest were
conclusions about differences in drug effectiveness, adverse effects, cost outcomes, or
publication status between industry funded trials and other trials. Work published in any
language was eligible for inclusion. Some studies analyzed both pharmacological and non-
pharmacological trials and combined research funded by drug companies and other industries
into one group. In these cases, if most were non-pharmaceutical trials and were funded by other
industries they were excluded.

Search strategy
We searched Medline from January 1966 to December 2002 using a combination of terms as
both MESH subject headings (exploded) and key words (clinical trials, conflict of interest,
drug industry, financial support, publication bias (subject heading only), research
design, and research support.) We searched base from January 1980 to December 2002 using
a combination of terms as subject headings (exploded) and key words (clinical trials (subject
heading only), drug industry, ethics, financial management, methodology, and ethics.
To find more studies, we scanned the reference lists from each of the articles and searched the
Cochrane methodology register. We placed messages on two email drug discussion groups,
contacted content experts, and searched our personal libraries. In cases where the reported results
were incomplete, we contacted the lead author and asked for further details. A single author (JL)
did the initial selection of studies and sent copies of each of these studies to the other three
authors for validation of the inclusion criteria.

Data collection
From each study, we extracted the study design, type of research assessed in the study, design of
research assessed in the study, search strategy used to locate research, time period covered, drug
or drug class, disease, number of industry and non-industry funded articles analyzed in each
study, how industry funding was defined, criteria used to assess methodological quality of the

26
research, results with respect to methodological quality or outcome of the research, and primary
purpose of study. We provide a critical description of each included study, but do not assess
methodological quality. Since our included studies had a variety of designsthat is, cohort
collections of trials, meta-analyses, and economic studiesand since we included letters and
abstracts with limited descriptions of methods, we had no valid and reliable quality assessment
instrument available for assessing their methodological quality. We did not use a component
approach to assess their quality since this approach applies to randomized controlled trials.

Haritha Saranga
The Indian Pharmaceutical Industry (IPI) will be going through a major shift in its business
model, from the year 2005 onwards, as the existing Process Patent regime gives way to the
Product Patent regime, in order to comply with the Trade Related Intellectual Property Rights
System (TRIPS) agreement. As a result, IPI, comprising of more than 20,000 players, is slowly
consolidating with mergers, acquisitions and alliances; and getting ready to adapt to the new
environment. In such a dynamic environment it would be imperative to examine whether there
are any common firm level factors which aid in the survival and growth of a firm. This assumes
crucial importance due to the fact that it is almost impossible for any firm to control the factors

27
which affect the industry as a whole. This is particularly true when the changes are driven due to
the process of globalization and not due to any policy changes of individual governments. With
this objective, we have used Data Envelopment Analysis (DEA) on a sample of 44 companies
that have survived at least the past one-decade, to determine the best practices in the Indian
Pharmaceutical Industry. The results of DEA have been analyzed along with their Compounded
Annual Growth Rate (CAGR) to see if internal efficiencies and growth rate are related in the
Indian Pharmaceutical Industry. We have also used regression analysis to see the correlations
between various inputs/outputs and the growth rates. Various models of DEA like Constant
Returns to Scale (CCR), Variable Returns to Scale (BCC) and Assurance Region (AR) are used
to substantiate the results obtained

The Changing Environment


During the early 1990s, markets were opened by removing restrictions on imports and abolishing
licenses in 1994 for all the bulk drugs and formulations for all the sectors. The MNCs now
automatically can have up to 74% foreign equity and more favorable conditions are to follow in
future with the advent of product patent regime and exclusive marketing rights (EMRs). In a
situation like this, there is a lot of speculation that the indigenous companies that have developed
the Indian pharmaceutical industry into a formidable part of Indian economy and a major source
of foreign income are going to have tough times ahead and most of the small scale companies
may have to close down, and the multinational companies will be dominating and monopolizingc
the industry once again. There is a justified reason for this, and that is, so far Indian companies
have made use of the cheap labor and the reverse engineering skills under the favorable
conditions of process patent regime and developed generic replicas to drugs that were under
patent in developed countries, which then were sold in the domestic markets and exported to
other unregulated markets elsewhere in the world. This generic business enabled them to
compete with multinational companies in India and abroad and resulted in good revenues.
However, once the product patent regime begins in 2005, one is not allowed to reverse engineer
drugs that are patented after 1995, and the revenues from this business will suffer. Whereas, the
multinational companies in India, which have an impressive new product portfolio will get 5
exclusive marketing rights to sell their products at higher prices and will be in a position to
dictate the terms. Given the above, survival of Indian companies depends on producing generics
of off patented drugs and export the same to regulated markets. This is possible only if these
firms are able to formulate these products at much lower prices allowing then to face competition
from established players in the international markets. Other than this, avenues like contract
research and manufacturing for multinational companies have become popular business models
for many small scale and medium scale firms. Therefore internal efficiencies along with timely
marketing strategies and long term visions are going to play a major role in dictating the survival
and growth of companies in various segments of pharmaceutical industry. We concentrate on the
role of internal efficiencies in the growth of these firms as marketing strategies and long term
visions may not be quantifiable accurately. The main question which we try to answer is Do
internal efficiencies have any role to play in the growth of a firm in a constantly changing
dynamic environmental context. Cost Structure/Performance indicators of Indian

28
pharmaceutical industry The pharmaceutical industry is characterized by low fixed asset intensity
and high working capital intensity (ICRA 2002).

Nitika Pant
India is an increasingly influential player in the global pharmaceutical market. Key parts of the
drug regulatory system are controlled by the states, each of which applies its own standards for
enforcement, not always consistent with others. A pilot study was conducted in two major cities
in India, Delhi and Chennai, to explore the question/hypothesis/extent of substandard and
counterfeit drugs available in the market and to discuss how the Indian state and federal

29
governments could improve drug regulation and more importantly regulatory enforcement to
combat these drugs.

Methodology/Principal Findings

Random samples of antimalarial, antibiotic, and antimy cobacterial drugs were collected from
pharmacies in urban and peri-urban areas of Delhi and Chennai, India. Semi-quantitative thin-
layer cinematographer and disintegration testing were used to measure the concentration of
active ingredients against internationally acceptable standards. 12% of all samples tested from
Delhi failed either one or both tests, and were substandard. 5% of all samples tested from
Chennai failed either one or both tests, and were substandard. Spatial heterogeneity between
pharmacies was observed, with some having more or less substandard drugs (30% and 0%
respectively), as was product heterogeneity, with some drugs being more or less frequently
substandard (12% and 7% respectively).

Conclusions/Significance

In a study using basic field-deplorable techniques of lesser sensitivity rather than the most
advanced laboratory-based techniques, the prevalence of substandard drugs in Delhi and Chennai
is confirmed to be roughly in accordance with the Indian government's current estimates.
However, important spatial and product heterogeneity exists, which suggests that India's
substandard drug problem is not ubiquitous, but driven by a subset of manufacturers and
pharmacies which thrive in an inadequately regulated environment. It is likely that the drug
regulatory system in India needs to be improved for domestic consumption, and because India is
an increasingly important exporter of drugs for both developed and developing countries. Some
poor countries with high burdens of disease have weak drug regulatory systems and import many
HIV/AIDS, tuberculosis and malaria drugs from India.

ARTICLES

Basing marketing strategies on relationships with doctors wont suffice


anymore. Sea changes in the pharmaceutical industry are prompting a total
rewrite of the marketing playbook.

30
One doesnt need a thermometer to take the temperature of contemporary rhetoric against the
pharmaceutical industry. The white-hot title of author and physician Ben Goldacres 2012 book
Bad Pharma: How Medicine Is Broken, and How We Can Fix It says it all. Bristling with
outrageous examples of slanted or suppressed research and corrupt marketing and sales tactics,
Goldacres book paints a picture of a hopelessly wayward medical industry awash in dirty
money. He shines a light on the more negative aspects of the industry, which do exist, says
Marcel Carsten, The Unilever Chaired Professor of Marketing at INSEAD. Some marketing and
sales practices are unethical; some research is misused. But the animus expressed toward Big
Pharma these days is at an unfair level, Carsten suggests. No industry is snow-white. There are
issues in the food industry, around obesity, in the tobacco industry, and in the financial services
industry with the global economic crisisThe world would have been a worse place without big
pharma. It is out of that more constructive spirit that Corstjens and his co-author Edouard
Damiere titled their new book Good Pharma: How Marketing Creates Value in Pharma. He
warns, If you keep emphasizing problems in the industry and push for more controls, companies
will be more risk-averse, which will result in less innovation. Rather than tightening the reins,
Corstjens and Damiere write, companies should intensify their marketing efforts while adhering
to industry best practices. But they should do so with awareness of the fundamental changes
currently underway within the industry, which are rendering the old rulebook obsolete.

Should Drug Makers be required to Take FDA Advice on Pivotal Trials?


Existing regulations do not require a company to meet with the agency to review their late-stage
studies, which are known as Phase III trials in industry parlance. Yet such advance meetings can
generate useful recommendations for improving clinical trials and a group of researchers
believes there is good reason for drug makers to be required to meet with the FDA and follow it
suggestions.

31
Why? In their view, clinical trial designs could be enhanced and, therefore, study results may be
bolstered if drug makers were mandated to submit all study protocols to the FDA for review,
according to a research letter published in the latest issue of the Journal of the American Medical
Association. The researchers came to this conclusion after finding that 20% of recent new drug
approvals occurred without any meeting between the FDA and drug makers seeking to market
their experimental medicines. And even when meetings did occur, drug makers did not comply
with 25% of the recommendations made by the FDA about study designs or a primary outcome.
The protocol is like a recipe, says Steven Woloshin, a professor at the Geisel School of
Medicine at Dartmouth. If you faithfully follow a bad recipe, you get a bad cake. You want to
make sure the recipe is as good as possible. Not having FDA routinely vetting the study
protocol to make sure [a trial] is big enough, [runs] long enough, has meaningful outcome
measures, etc., [can] seem like a missed opportunity. And the same goes for not ensuring that
sensible FDA suggestions for improving study design are followed. In reaching their
conclusion, the researchers reviewed FDA memos; minutes of meetings; checklists; and medical,
statistical and summary reviews for all 35 new drugs that were approved between Feb. 1, 2011,
and Feb. 29, 2012. They identified all FDA comments and analyzed recommendations about
study designs or primary outcomes. Of the 35 FDA approvals, drug makers met with the agency
to review pivotal studies for 28. In other words, drug makers did not seek an agency review for
one out of five late-stage studies. Of the 28 approvals, the FDA made recommendations about
primary outcomes or study design such as dosing, the length of a study of controls for 21 of
the medicines approved. The researchers also found the FDA made a total of 53
recommendations and 51 of those would have increased study quality, such as offering specific
measures to assess toxicity, adding controls or lengthening studies to assess outcome durability.
However, drug makers complied with only 40 of the 53 recommendations. Put another way, they
did not follow recommendations 25% of the time.

Synergy Pharmaceuticals Announces Positive Results of SP-333 Phase 2 Trial


in Patients with Opioid-Induced Constipation.
Synergy Pharmaceuticals Inc. SGYP, +4.05% today announced positive top-line results from a
phase 2 trial assessing safety, efficacy and dose-response of three different once-daily oral SP-
333 tablets (1.0, 3.0 and 6.0 mg) compared with placebo in 289 patients with opioid-induced
constipation (OIC). Preliminary analysis of the data indicates SP-333 met the studys primary

32
endpoint and demonstrated statistically significant improvement in mean change from baseline in
the number of spontaneous bowel movements (SBMs) during Week 4 of the treatment period.
SP-333 was safe and well tolerated at all doses. SP-333 is the first and only GC-C agonist to
demonstrate efficacy in treating OIC patients, said Gary S. Jacob, PhD.., Chairman and CEO of
Synergy Pharmaceuticals Inc. Synergy now has a clinically validated platform technology
consisting of two very unique GC-C agonists plecanatide and SP-333 both analogs of the
natural GC-C agonist, uroguanylin, with proven efficacy and excellent tolerability for treating a
variety of gastrointestinal conditions. We look forward to evaluating the full data set over the
coming weeks and plan to present additional results at an appropriate scientific meeting.

Trial Results
SP-333 3.0 and 6.0 mg doses demonstrated statistically significant improvement in mean change
from baseline in the number of SBMs during Week 4 of the treatment period (increase from
baseline of 3.2, 3.4 and 1.8 for 3.0, 6.0 mg and placebo dose groups, respectively; p= 0.009 and
0.005 for the comparison of 3.0 and 6.0 mg SP-333 with placebo). SP-333 treatment effect was
immediate and sustained throughout the four weeks. Additionally, SP-333 3.0 and 6.0 mg dose
groups showed statistically significant improvement in a key secondary endpoint analysis of
complete spontaneous bowel movement (CSBM) frequency (increase from baseline of 2.54, 2.39
and 1.36 for 3.0, 6.0 mg and placebo dose groups, respectively; p= 0.003 and 0.01 for the
comparison of 3.0 and 6.0 mg SP-333 with placebo). All doses were safe and well tolerated with
only four serious adverse events reported (2 for placebo, 1 for the 3.0 mg and 1 for the 6.0 mg
dose groups). Diarrhea incidence was low and was the most commonly reported adverse event
(4.0%, 5.4%, 9.7% and 0% for 1.0, 3.0, 6.0 mg and placebo dose groups, respectively). Only two
patients withdrew from the study due to diarrhea (both in the 6.0 mg dose group).

Asia Pacific market: shares mostly higher on China stimulus hopes.


Headline equities of the Asia Pacific market closed mostly higher in lacklustre trade on
Thursday, 27 November 2014, on hopes that China government would loose monetary policy
further to support the world's second-biggest economy stimulus in China after last week's
surprise cut in interest rates. Investors appeared to shrug off data showing weaker industrial
profits, as the markets kept their upward momentum following an interest rate hike by the central
bank late last week. That action has raised hopes China will take further measures to prevent

33
growth from dropping below 7%. China's industrial profit swung to a decrease in October, as net
income for the top companies fell 2.1% from a year earlier, compared to a 0.4% increase for
September profit, the National Bureau of Statistics data showed on Thursday. On a year-to-date
basis, the companies' profit growth slowed to 6.7% in the January-October period, compared
with a 7.9% rise in the first nine months, and a 10% increase in the first eight months, official
data showed. Many of the market participants opted sideline ahead of meeting of the
Organisation of the Petroleum Exporting Countries (OPEC) later in the global day and as of the
US Thanksgiving holiday. The US markets closed on Thursday and open for shortened trade on
Friday. Japanese share market finished softer for second consecutive day, as profit booking
continued after climbing a highest level since 2008 on Tuesday and as yen appreciation against
the greenback. However, a record close on Wall Street overnight supported the Nikkei at lower
levels. The Nikkei 225 Stock Average declined 0.78% to 17248.50. The yen strengthened against
the dollar and the euro Asian trade on Thursday in thin trade amid the U.S. Thanksgiving
holiday. The dollar was at Y117.35 from Y117.72 late Wednesday in New York. The euro was at
Y146.74 from Y147.24. As the dollar eased to Y117.37, down from Y117.85 at the Wednesday
Tokyo stock close, investors sold the forex-sensitive names, with Sharp Corp falling 2.4% and
Sony Corp down 1.9%. Some tech exporters bucked the trend, however, supported by gains
overnight for their U.S. shares, with Panasonic Corp. added 0.4% after its American depository
shares (ADS) added 0.7%, while Toshiba Corp rose 1% after its ADS gained 0.9%. Shares of
auto-parts maker. Takata Corp fell 4.8% on its regulatory troubles in the U.S., and Honda Motor
Co shaved 3.3% on reports the company had recalled cars with Takata airbags in early 2002, two
years earlier than previously thought. On the upside for automotive, however, SPK Corp. rallied
4.9% on reports the auto-parts trader would continue its practice of annual dividend hikes at least
until fiscal 2019. China-linked shares weakened on reports that China is expected to lower its
economic growth target for the first time in three years. Citing Communist Party sources, the
reports said China will cut its target by 50 basis points to around 7%. China's Central Economic
Work Conference is slated to decide its 2015 growth target next month. Hitachi Construction
Machinery fell 1.9%, while Kubota lost 2.5%.

Dr Jagashetty abhors breach of Uniform Code of Pharmaceutical Marketing


Practices by doctors.
Following the probe by the Medical Council of India and its orders to call for 300 doctors across
the country for interrogation on violating the Uniform Code of Pharmaceutical Marketing
Practices issued in June 2011, Dr. BR Jagashetty, National Advisor for drugs control and project
in-charge for the implementation of two schemes of Central Drugs Standards Control

34
Organization (CDSCO) has now come down heavily on the prevalence of this unethical practice.
Although the allegation is on doctors accepting bribe, receiving gifts like cars and flats besides
embarking on foreign jaunts sponsored by pharma companies, the investigation is currently
undertaken by the Medical Council of India, and if pharma companies have engaged the doctors
into this practice, the act is heinous and difficult to prove. But the fact of the matter is that it is
against the ethics of medical profession, Dr Jagashetty told Pharmabiz. The medical
professionals should refrain from such disreputable moves and should be dealt with stern action,
he added. From the pharma industry front the violation of Uniform Code of Pharmaceutical
Marketing Practices needs to be investigated, pointed out Dr. Jagashetty. According to the
industry observers, it is stiff competition and the new DPCO 2013 which are making the sector
opt for unethical methods to generate their revenues by wooing medical practitioners to prescribe
their drugs by greasing palms. Out of the 300 doctors around 100 appeared before MCI's ethics
committee on November 17, 2014. The Councils ethics committee in its last meeting called for
150 doctors to appear for interrogation, but only 109 appeared. A panel member indicated that
these doctors would be given three chances and have been asked to appear with their bank
statement. If the doctors fail to appear, their names would be struck off from Council records.

ICYMI: Inside Indian pharma's push to reform and modernize addressing the
clinical and regulatory challenges of fixed-dose combination drugs.

This is not the best moment for the biopharmaceutical industry in India. In the last two years,
there have been reports of product recalls, failed manufacturing-facility inspections, revoked
approvals and over $500 million in fines for Ranbaxy Labs, one of the top pharma manufacturers

35
in India, for falsified generic drug data. However, as Bio Pharma Dive has pointed out before,
strenuous reform efforts are underway. And quite frankly, the world depends on the productivity
of Indian pharmaceutical manufacturers to meet the need for affordable generic drugs. In fact, in
the U.S. alone, 40% of all OTCs and generics are imported from India, including fixed-dose
combination (FDC) drugs.

Regulatory inconsistency

In 2001, Indian authorities enacted a regulatory rule requiring that drug manufacturers prove that
a drug is both safe and effective, including FDCs. But that rule was subsequently downgraded in
2005. Indian laws governing the creation and approval of FDCs are inconsistent with World
Health Organization (WHO) guidelines. While the WHO guidelines focus on scientific efficacy
and safety data, as well as the ability to make a solid case for medical necessity, convenience is
an acceptable basis for approval of FDCs in many Indian states.

When marketing an FDC drug, there are many angles that may seem compelling at face value,
but offer little in the way of therapeutic benefit. There's a tendency for the "more is better" logic
to dominate the discussion, without regard for drug/drug interactions or non-therapeutic
redundancies. For example, pediatric formulations of nimesulide and paracetamol, both NSAIDs,
can not only induce hypothermia, but lead to shock. With respect to adult formulations, the
combination of the NSAID diclofenac and serratiopeptidase, which is often used as an anti-
inflammatory, can lead to serious gastrointestinal (GI) bleeding. In addition, FDCs of quinolones
and nitromidazoles are heavily prescribed to treat all types of infections, ranging from dental
infections, to GI infections, to pelvic inflammatory disease, despite the fact that this combination
has not been validated. This type of FDC is often prescribed when there is not a precise
diagnosis, but it is clear that some type of infection is occurring. The result is an exponential
increase in antibiotic resistant organisms and infections that can become untreatable. Selling two
drugs at once is a more profitable proposition than selling just one.

Medicine marketing in Kerala turning into a monopoly of north Indian


Pharma companies.

The medicine marketing in Kerala is gradually becoming the monopoly of big manufacturing
companies from north Indian states as small scale units in the state are not able to make a

36
foothold in the field due to lack of support from government. The government procurement
agency, Kerala State Medical Services Corporation (KMSCL), whose operation has now come to
a standstill, is not supporting the domestic manufacturing units as is done in neighboring states,
say industry sources. So, the state is not capable of manufacturing the required quantity of drugs
for its use and the situation is benefited by manufacturers from north India.
Secondly, since internal feud is going on in the trade body, All Kerala Chemists & Druggists
Association (AKCDA), the system of purchase and sale of drugs in Kerala is in big trouble now.
Lack of proper coordination by government, unorganized status of the traders and the declining
situation of small scale manufacturing companies has totally crippled the conventional system of
marketing. Taking advantage of this unsteady condition, big players and MNCs are eyeing
Kerala as their propitious market for their products.
Besides, the industry sources point out several other factors that support a favorable market
condition for outside manufacturers, especially from north India. According to them eighty
percent of the total requirement is procured by KMSCL from Pharma companies from north
India. But now, the functioning of KMSCL has reached a standstill due to internal problems in
the corporation and it has affected its business. Doctors in the government hospitals are helpless
in directing the patients to the hospital pharmacies, so they advise the patients to get the
medicines from outside.
Several civil and criminal cases are pending with the court against the officials of AKCDA,
hence there is no unity among its office-bearers and their supporters. So, the situation in Kerala
paves way for a monopolistic marketing condition for a few Pharma companies from other
states. The traders organization is not able to coordinate its members and resolve their problems.
This situation also helps the outside marketers to create a strong foothold in Kerala.

Big Pharma increasingly collaborating with Indian companies.

Even as multinational Pharma majors are looking for new ways to squeeze costs along the whole
value chain, joint ventures with Indian companies are increasingly becoming the norm, reports

37
The Pharma Letters India correspondent.Collaborations with India present a huge opportunity
for foreign investors, both in terms of joint production for the global market and supply for the
growing domestic market. The changes in the global landscape brought about by the increasing
cost of health care, and drying R&D pipelines has also added to the momentum.

Foreign companies are increasingly looking at local partners to work with, in order to increase
their presence in India,'' said Kamlesh Patel, chairman of the Gujarat chapter of the Indian Drug
Manufacturers' Association. The Indian consumer's rapidly increasing purchasing power and the
countrys changing epidemiological profile is ensuring that Big Pharma can suitably improve
their drug price and volume mix by being present in India,'' he added.Noting that there were
issues of cost optimization that were troubling multinationals, Mr Patel said that most drug
majors were eager to have their fingers in many pies. For instance, generics or even vaccines,
multinationals are eager to get into businesses that are different. They are also looking for
profitable growth, for which there has to be a focus on emerging markets, which ensure good
margins.''

Corruption tars drug industry drive to improve access for poor.

The world's top drug makers have improved access to medicines in developing countries,
according to a report on Monday, but their good work is undermined by a sorry record of
unethical behavior. The Access to Medicines Index, which ranks the 20 leading pharmaceutical

38
companies every two years on how well they get treatments to the poor, said the industry's
progress had been "uneven". Eighteen of the firms monitored were the subject of settlements or
fines for corrupt behavior, unethical marketing or breaches of competition law in the last two
years. "Commitment to ethical behavior does not correlate with performance," the report said,
adding that companies were still reluctant to disclose details of drug patents.
The independently compiled index, which had a skeptical reception from drug manufacturers
when it started in 2008, is now widely tracked by drug makers and investors, who see it as a
proxy for companies' long-term success in emerging markets. The contradictory advances and
the problems facing the industry are evident at GlaxoSmithKline, which retained its long-
standing top spot in the index, while simultaneously featuring in a major bribery scandal in
China.
"Corruption is terrible, but it also takes attention away from the fact that these companies are
doing quite a lot of good stuff," said Jayasree Iyer, research head at the Access to Medicine
Foundation, based in the Netherlands. Denmark's Novo Nordisk moved up to the No. 2 spot,
reflecting its coordinated approach to providing diabetes care at an affordable price in poorer
countries. Sanofi and Pfizer were the biggest fallers down the rankings, while Japanese drug
makers came bottom, as in previous assessments. As well as access for existing medicines, the
index also assesses research into new drugs. Here it found work on many tropical diseases was
still neglected, an issue highlighted recently by the lack of drugs and vaccines for Ebola. While
drug companies have been criticized over the years for not doing enough to ensure access in poor
countries, the issue is moving up the agenda, with all top-20 companies having a board member
responsible for access activities. Emerging markets are a growing focus for pharmaceutical
companies as growth in Western markets slows.

Indian Pharma companies need to tap unexplored markets to boost revenues.


As part of risk mitigation strategies, Indian companies should export untapped markets
such as South America, GCC, CIS, Japan, etc. in addition to the US and Europe

39
Indian pharmaceutical companies have capitalized on export opportunities in regulated and semi-
regulated markets and pharma exports from India grew at a CAGR in excess of 20% from 2006
to 2012. Currently, India is the third-largest exporter of Active Pharmaceutical Ingredients
(APIs). Indian pharma exports are expected to bring in an estimated $25 billion by the end of
2014.

Changes in the global landscape brought about by the increasing costs of healthcare and drying
R&D pipelines have been able to create a number of opportunities for Indian players. The US
and EU markets have been the largest importers of Indian products, but increasing scrutiny in
these geographies is threatening export revenues and Indian companies would have to look at
risk mitigation strategies. Further, the global environment, both from a regulations and a business
perspective is changing rapidly and Indian pharmaceutical companies will be required to adapt
their business models and operating strategies accordingly. It would be upon these companies to
choose the most adequate lever to tap into newer markets as a part of their expansion strategy in
the future. Understanding market dynamics will be imperative in determining the extent of
growth and reach that Indian companies will be able to achieve.

With Indian products competing with their global counterparts in terms of quality, India has been
able to establish a global footprint. Indian companies operating in the west have been able to do
so successfully, but, markets such as Japan, parts of South America, Gulf Cooperation Council
(GCC) and Commonwealth of Independent States (CIS) still remain untapped and can be
explored.

BOOKS

40
The Role of Perception in Consumer Behavior

Seminar paper from the year 2004 in the subject Business economics - Marketing, Corporate
Communication, CRM, Market Research, Social Media, grade: 1, 3, Galway Mayo Institute of
Technology, course: Consumer Behavior, 15 entries in the bibliography, language: English,
abstract: Our modern world is very complex, and so is the business world. There are many things
that influence the behavior of the consumer. These influences can be religion, ethnic group,
social class, age, gender, values, etc. But what is even more important than the different stimuli
itself is how consumers perceive, process, interpret and store the stimuli. This work will describe
what perception is, how consumers perceive and how this scheme can be used by marketers.
What is perception? In general, perception is gathering information through our senses, which
are seeing, hearing, touching, tasting, smelling and sensing. Through these senses we can
perceive things, events or relations. But as there are so many different stimuli only a small
portion of them are noticed and an even smaller amount can really reach our attention. And that's
where it is necessary to talk about the difference between Sensation and perception. Although the
distinction between sensation and perception is not that easy as it was believed in former times, a
rough distinction can be made. Sensation is the immediate response of our sensory receptors to
such basic stimuli as light, color, etc.
Perception is the process by which these stimuli are selected, organized and interpreted. When
talking about perception we always have to keep in mind that we perceive the world not as it is,
but as we think it is. That means that there are innumerable perceived worlds out there. This
statement is based on the fact that every human being relates the observed world to its past
experiences, its values, etc. Perception is more than just gathering information about a certain
event at a certain time

Competitiveness of the EU Market and Industry for Pharmaceuticals.

41
Background
Pharmaceuticals save lives and improve the quality of life of people. The pharmaceutical
industry is also a key sector for the European economy. The sector is a major employer and it
combines a large production value with high levels of innovation. It follows that the functioning
the pharmaceutical market is crucial for Europe. The examination of market functioning was the
focus of the Pharmaceutical Sector Inquiry carried out by the Competition Directorate General of
the Commission published in July 2009. The Inquiry concluded that improvements were possible
which would add up to 3 billion in gains for European consumers. The current study
investigates the competitiveness and functioning of the EU market of pharmaceuticals as part of
the market monitoring of the pharmaceutical market in the European Union and as a follow-up to
the Single Market Review. The study is divided into two volumes. This Volume II of the study
focuses on the competitiveness of the sector. It describes the main characteristics of the sector,
the trends and developments in the EU pharmaceutical markets, the competitive position of the
industry and the main prospects for its future development, with a special focus on R&D and
innovation. It follows that the functioning the pharmaceutical market is crucial for Europe. The
examination of market functioning was the focus of the Pharmaceutical Sector Inquiry carried
out by the Competition Directorate General of the Commission published in July 2009. The
Inquiry concluded that improvements were possible which would add up to 3 billion in gains
for European consumers. The current study investigates the competitiveness and functioning of
the EU market of pharmaceuticals as part of the market monitoring of the pharmaceutical market
in the European Union and as a follow-up to the Single Market Review. The study is divided into
two volumes. This Volume II of the study focuses on the competitiveness of the sector. It
describes the main characteristics of the sector, the trends and developments in the EU
pharmaceutical markets, the competitive position of the industry and the main prospects for its
future development, with a special focus on R&D and innovation. Next to the competitiveness of
the industry and the functioning of the market, the regulatory system has important implications
on the sector and hence on economic welfare. As this issue has received somewhat less attention
in other studies, ECORYS puts particular emphasis is on the implications of the regulation of
pharmaceuticals in the EU for economic welfare. In this way the study builds upon the outcomes
of the Pharmaceutical Sector Inquiry. This study also complements the (forthcoming) evaluation
of the European Medicines Agency (EMEA) with its focus on the process of marketing
authorisation in the EU.
On the supply side, a distinction can be made between two types of producers: originator
companies and generic companies:
Originator companies undertake research into new pharmaceuticals, develop them from the
laboratory to marketing authorisation and sell them on the market. These companies range from
very large multinationals to SMEs concentrating on certain niche products.
Generic companies use a business model aimed at the development of a medicine which is
identical or equivalent to originator products. Generic companies market their products as soon
as the originator product encounters loss of exclusivity, and their products are sold at a much

42
lower price than the original product. Generic companies active on the European market tend to
be significantly smaller than originator companies.
The difference in business models between originator and generic companies is also reflected in
their cost structure: whereas for generic companies manufacturing costs account for the largest
share of the costs, for originator companies research and development, marketing and sales
together account for a much larger share of total costs than the manufacturing process. There is a
clear focus on research and innovation in the sector. R&D is very important in the life cycle of
drugs as it takes some 12 to 14 years on average to develop a new medicine. On a global scale,
the pharmaceutical sector is the highest R&D spending sector. Given the importance of R&D in
the sector and the high costs and risks associated with it, access to capital is important for the
sector. Especially SMEs are dependent on external sources of finance, notably when they first
enter the market. Venture capital and grants are among the most important sources of funding in
the discovery and development of new drugs. The sector is heavily regulated. Important
examples of policies and regulation are patent protection, and pricing and reimbursement
policies.

The pharmaceutical sector in the EU


Value added
The pharmaceutical sector occupies an important position in the EU economy with value added
production of 70.5 billion (2006), accounting for some 4% of total manufacturing value added.
This share is much higher in some Member States, such as Belgium, Denmark, Sweden and
Slovenia, reaching between 8.5 and 10% of manufacturing value added. The value added of the
sector has grown significantly, with a nominal compound annual growth rate of 7% in the period
from 2002-2006. The pharmaceutical sector also accounts for over 600,000 jobs (2006), some
2% of total manufacturing employment in the EU.

R&D
The sector is even more important in terms of R&D and innovation and thus, in terms of its
potential contribution to meet the ambitions of the Lisbon Agenda. The sector accounts for some
18% of EU R&D and 33% of total high-tech R&D, and is also among the fastest growing sectors
in terms of real business R&D expenditure. The sector records the second highest R&D intensity
(as measured by the share of R&D in value added). Data for the period 1995-2008 show that
R&D intensity has increased considerably during this period. In the period 1995-2003, the sector
recorded the highest growth in R&D intensity of all high-tech sectors in the EU, and available
data for 2004-2008 suggest a further increase in the R&D intensity.

Trade
Whilst the US is still the most important market in terms of the total value of pharmaceutical
sales, the value of EU pharmaceutical production surpasses that of the US. This is reflected in the
EUs strong position in international trade of pharmaceuticals, with a significant and growing
trade surplus of some 32 billion. The EUs external exports accounting for over 70% of total

43
world trade in pharmaceuticals. Its exports are not concentrated towards a limited number of
markets: while the US is clearly the most important export destination, the EU exports
significant amounts to other countries as well, and as a result the EU accounts for a major share
of imports in many countries, including many of the emerging countries that experience high
growth in pharmaceutical sales. Within the EU, notably Germany, France, Ireland, the UK, and
Belgium show a size able trade surplus in the sector.

Market structure
In terms of market structure, the sector is moderately concentrated. It is characterized by a
relatively small group of big pharmaceutical companies that represent a significant share of the
annual European turnover: in 2006, companies with more than 250 employees represented some
10% of the total number of enterprises, but accounted for more than 80% on the EU
pharmaceutical turnover. Strikingly, the number and share of small enterprises (less than 20
employees) has increased over the last decades, but their share in total EU turnover has
decreased.

44
Marketing Management

Introduction
Todays central problem facing business is not a shortage of goods but a shortage of customers.
Most of the worlds industries can produce far more goods than the worlds consumers can buy.
Overcapacity results from individual competitors projecting a greater market share growth than
is possible. If each company projects a 10 percent growth in its sales and the total market is
growing by only 3 percent, the result is excess capacity. This in turn leads to hyper competition.
Competitors, desperate to attract customers, lower their prices and add giveaways. These
strategies ultimately mean lower margins, lower profits, some failing companies, and more
mergers and acquisitions. Marketing is the answer to how to compete on bases other than price.
Because of overcapacity, marketing has become more important than ever. Marketing is the
companys customer manufacturing department. But marketing is still a terribly misunderstood
subject in business circles and in the publics mind. Companies think that marketing exists to
help manufacturing get rid of the companys products. The truth is the reverse, that
manufacturing exists to support marketing. A company can always outsource its manufacturing.
What makes a company prosper is its marketing ideas and offerings. Manufacturing, purchasing,
research and development (R&D), finance, and other company functions exist to support the
companys work in the customer marketplace. Marketing is too often confused with selling.
Marketing and selling are almost opposites. Hard-sell marketing is a contradiction. Long ago I
said: Marketing is not the art of finding clever ways to dispose of what you make. Marketing is
the art of creating genuine customer value. It is the art of helping your customers become better
off. The marketers watchwords are quality, service, and value. Selling starts only when you
have a product. Marketing starts before a product exists. Marketing is the homework your
company does to figure out what people need and what your company should offer. Marketing
determines how to launch, price, distribute, and promote your product/service offerings to the
marketplace. Marketing then monitors the results and improves the offering over time. Marketing
also decides if and when to end an offering. All said, marketing is not a short-term selling effort
but a long term investment effort. When marketing is done well, it occurs before the company
makes any product or enters any market; and it continues long after the sale.Lester Wunderman,
of direct marketing fame, contrasted selling to marketing in the following way: The chant of the
Industrial Revolution was that of the manufacturer who said, This is what I make, wont you
please buy it? The call of the Information Age is the consumer asking, Marketing hopes to
understand the target customer so well that selling isnt necessary. Peter Drucker held that the
aim of marketing is to make selling superfluous. Marketing is the ability to hit the mark. Yet
there are business leaders who say, We cant waste time on marketing. We havent designed the
product yet. Or We are too successful to need marketing, and if we were unsuccessful, we
couldnt afford it. I remember being phoned by a CEO: Come and teach us some of your
marketing stuffmy sales just dropped by 30 percent. Here is my definition of marketing:

45
Marketing management is the art and science of choosing target markets and getting, keeping,
and growing customers through creating, communicating, and delivering superior customer
value. Or if you like a more detailed definition: Marketing is the business function that
identifies unfulfilled needs and wants, defines and measures their magnitude and potential
profitability, determines which target markets the organization can best serve, decides on
appropriate products, services, and programs to serve these chosen markets, and calls upon
everyone in the organization to think and serve the customer.
In short, marketings job is to convert peoples changing needs into profitable opportunities.
Marketings aim is to create value by offering superior solutions, saving buyer search and
transaction time and effort, and delivering to the whole society a higher standard of living.
Marketing practice today must go beyond a fixation on transactions That often leads to a sale
today and a lost customer tomorrow. The marketers goal is to build a mutually profitable long-
term relationship with its customers, not just sell a product. A business is worth no more than the
lifetime value of its customers. This calls for knowing your customers well enough to deliver
relevant and timely offers, services, and messages that meet their individual needs. The function
of marketing is typically organized as a department within a business. This is good and bad. Its
good because it brings together a number of skilled people with specific abilities for
understanding, serving, and satisfying customers. Its bad because other departments believe that
all marketing is done in one department.

Business-to-Business Marketing
Most marketing is business-to-business (B2B) marketing even though textbooks and business
magazines devote most of their attention to business-to-consumer (B2C) marketing. The
disproportionate attention to B2C has been justified by saying that (1) B2C is where most of
modern marketing concepts first arose, and (2) B2B marketers can learn a lot by adopting B2C
thinking. While these two statements are true, B2B is having its own renaissance, and maybe
B2C marketers have a lot to learn from B2B practices. B2B, in particular, has focused more on
individual customers, and B2C is increasingly moving into one-to-one customer thinking. The
sales force is the main driver in B2B marketing. Its importance cannot be overestimated,
especially when selling complex customized equipment such as B-47s or power plants or selling
to large national and global accounts. Todays companies increasingly assign national and global
account managers to manage their largest customers. Account management systems will grow in
the future as more of the worlds business becomes concentrated in fewer but larger companies.
But today B2B companies also are driven to replace high-cost sales calls with less expensive
contact channels such as tele and videoconferencing and Web-based communications, where
possible. As videoconferencing improves and costs come down, companies will reduce the
number of field visits to customers and save on the high costs of transportation, hotels, dining
out, and entertaining.

Communication and Promotion


Among the most important skills in marketing are communication and promotion.
Communication is the broader term, and it happens whether planned or not. A salespersons attire

46
communicates, the catalog price communicates, and the companys offices communicate; all
create impressions on the receiving party. This explains the growing interest in integrated
marketing communications (IMC). Companies need to orchestrate a consistent set of impressions
from its personnel, facilities, and actions that deliver the companys brand meaning and promise
to its various audiences. Promotion is that part of communication that consists of company
messages designed to stimulate awareness of, interest in, and purchase of its various products
and services. Companies use advertising, sales promotion, salespeople, and public relations to
disseminate messages designed to attract attention and interest. Promotion cannot be effective
unless it catches peoples attention. But today we are deluged with print, broadcast, and
electronic information. We confront 2 billion Web pages, 18,000 magazines, and 60,000 new
books each year. In response, we have developed routines to protect ourselves from information
overload. We toss most catalogs and direct mail unopened into the wastebasket; delete unwanted
and unread e-mail messages; and refuse to listen to telephone solicitations.-Thomas Davenport
and John Beck point out in The Attention Economy that the glut of information is leading to
attention deficit disorder (ADD), the difficulty of getting anyones attention.11 The attention
deficit is so pronounced that companies have to spend more money marketing than making the
product. This is certainly the case with new perfume brands and many new films. Consider that
the makers of The Blair Witch Project spent $350,000 making the film and $11 million to market
it. As a result, marketers need to study how people in their target market allocate their attention
time. Marketers want to know the best way to get a larger share of consumers attention.

47
RESEARCH METHODOLOGY
Research Problem
The lack of well-developed processes or techniques for problem formulation, as is common to
other stages of marketing research, is a grave difficulty, especially for the beginner. Fortunately,
an active, curious mind can do much to overcome this deficiency. The greatest difficulty,
perhaps, is that this stage of research has no specific boundaries. Without some knowledge and
data, only crude and probably faulty formula are possible.

RESEARCH DESIGN

EXPOLATORY RESEARCH
Exploratory Research is one in we dont know about the problem, we have to find about the
problem and then work on solving the problem.

DESCRIPTIVE RESEARCH
Descriptive Research is one in which we know about the problem, we just have to find the
solution to the problem.

In this project report exploratory research is used.

DATA COLLECTION SOURCES


THERE ARE TWO TYPES OF METHOD OF DATA COLLECTION

PRIMARY DATA

SECONDARY DATA

PRIMARY DATA
Primary data is that which is collected for the first time and thus happen to be originated in
character.

METHODS OF COLLECTING PRIMARY DATA

Questionnaire Method

48
Direct Interview Method

Observation Method

SECONDARY DATA
Secondary data refer to the data that has been already collected by any other person or
researcher.

METHODS OF COLLECTING SECONDRY DATA


Books, Journals, Magazines, Newspapers

Industry reports

Companys internet site

Some other relevant study material and website

Primary Data is used in this Project report.

49
DATA ANALYSIS

1. Which factor influence you in buying any medicine from Globus remedies
Ltd. And Radico Remedies?

Factors No. of
Respondents
1 Price 14
2 Brand Image 10
3 Quality 26
Total 50

Column 1
30

25

20

15

10

0
Price Brand Image Quality

50
2. Which Brand you ask first after entering the Pharmacy Store?

Brand Name No. of


Respondents
1 Cipla 21

2 Ranbaxy 14

3 Globus 13
Remedies
4 Radico 2
Remedies
Total 50

51
COLUMN 2
25

20

15

10

0
Cipla Ranbaxy Globus Remedies Radico Remedies

3. What do you feel about quality of Globus Remedies Ltd. Over Radico
remedies?

Quality of Globus No. of


Remedies respondents
1 Very Good 13
2 Good 19
3 Satisfactory 16
4 Poor 2
Total 50

52
COLUMN 3
20

18

16

14

12

10

0
Very Good Good Satisfactory Poor

4. If the desired product of medicine is not available at particular shop, How


will you respond?

Respond No. of respondent


1. Take another product 13
2. Visit next shop 24
3. Suggest to have same 7
product
4. Postpone Decision 6
Total 50

53
COLUMN 4
30
25
20
15
10
5
0

5. Your satisfaction level with Globus remedies ltd?

Highly satisfied 32
Satisfied 14
Not satisfied 4
Total 50

54
COLUMN 5
35

30

25

20

15

10

0
Highly Satisfied Satisfied Not satisfied

6. Your satisfaction level with Radico remedies?

Highly satisfied 15
Satisfied 25
Not satisfied 10
Total 50

55
Column6
30

25

20

15

10

0
Highly Satisfied satisfied Not satisfied

7. Which brand you find reliable in OTC segment?

Brand Name No. of Respondent

1 Cipla 21

2 Ranbaxy 17

56
3 Globus remedies 9

4 Other 3

Toatl 50

Coloumn 7
25

20

15

10

0
Cipla Ranbaxy Globus remedies ltd Other

8. Do advertisements of Globus remedies ltd and Radico remedies products


makes any effect on you?

Factors No. Of respondents

Yes 36

57
No 14

Total 50

coloumn 8
40

35

30

25

20

15

10

0
Yes No

9. Which sort of advertisements attracts you most?

Factors No. of respondents


News paper 15

58
Magazines 5

Hoardings 10

Social Media 20

Total 50

Coloumn 9
16

14

12

10

0
News paper Magazines Hoardings Social Media

10. Commonly you will buy any medicines on prescription of?

Factors No. of respondents


1. Your Doctor 21

59
2. Suggested by friend or 5
relative
3. Suggested by Chemist 19

4. your family tested old one 5

Total 50

column 10
25

20

15

10

DATA INTERPRETATION

Most of the consumers prefer quality while buying any medicine.


Most of the consumers demands the product of cipla.

60
Most of the consumers reviewed Globus remedies ltd. Good as compare to Radico
remedies
Most of the consumers would like to visit next shop in case they did not get the desire
product.
Most of the consumers are highly satisfied with Globus remedies.
Most of the consumers are just satisfied with Globus remedies.
Most of the consumer observed Cipla more reliable in OTC segment.
Most of the consumers are affected by the advertisements by Globus remedies and
Radico remedies.
Most of the consumers are attracted through social media.
Most of the consumers buy medicines prescribed by their doctors.

SUMMARY AND CONCLUSION

LIMITATIONS

61
The process employed to select the sample was simple random sampling. Simple random
sampling refers to that sampling technique in which each and every unit of the population
has an equal and same opportunity of being on the sample.

In simple random sampling, which item gets selected is just a matter of chance. Random
sampling technique is generally employed to extract the fruitful results.

Marketing and sales of pharmaceutical products is very different from other products such as
say groceries, cosmetics, food items, vehicles, etc.

Pharmaceutical products (apart from over the counter OTC drugs) can only be obtained from
a chemist on a doctors prescription.

The process of pharmaceutical marketing, market segmentation, targeting and brand


differentiation is considered to be challenging compared to the consumer marketing.

SUGGESTIONS

Pharmacy can be defined as Complex matrix of process, operations and organization,


involved in the discovery development and manufacture of drug and medication.

62
The pharmaceutical industry is the lifeline industry, which plays a very important role in
building strong human capital of country and very essential for economic growth and
development.

The industry is moving towards basic research driven expert oriented global presence and
providing wide range of value added quality product and services.

Considering the complexities in marketing process in pharmaceutical business, while


launching a new formulation in the existing markets or launching new formulations in the
new markets, product differentiation is necessary for proper brand promotion.

Since, for the prescription products, the end-customer, i.e. patient or his/her relatives are
unable to take any decision and the product is necessarily recommended by the expert, i.e.
physician or doctor.

CONCLUSION
Ensuring high standards in the promotion of medicines is important to consumers health
and helps to save money for health providers and patients. Without proper controls
consumers can be subject to misleading or inaccurate claims and the promotion of
expensive branded medicines that have no greater medical value than cheaper non-
branded products. Whilst the pharmaceutical industry clearly has an important role to

63
play in tackling the health challenges their involvement in the promotion of medicines
presents a serious conflict of interest.

It is equally important that health professionals have access to independent and up to date
advice on medicines so that they can make informed judgments about the most
appropriate medication for patients. Governments must make continued medical
education (CME) a priority and alleviate the need for doctors to rely on industry-
dominated information provision mechanisms helps to create a level playing field and
prevent unscrupulous companies from manipulating the market through irresponsible
marketing.

Provide transparent and verifiable information on the precise nature of relationships and
associated funding for all stakeholder groups, including health professionals, pharmacists,
students, journalists, clinical research organizations and patient groups. Implement,
improve and monitor legislation in line with the WHO Resolution on the Rational Use of
Medicines and the WHO Ethical Criteria for Medicinal Drug Promotion. Support the
provision of independent information on drugs for consumers and health professionals.
Implement and enforce a ban on gifts to doctors. Enforce strict sanctions that will deter
poor corporate practice in drug promotion. Take measures to improve the transparency of
drug companies marketing activities and seriously address the conflict of interest
encountered in drug companies funding of medical education. Big Pharma generally
demonstrates good efficiency within operations, maintains a high talent level of its
management and demonstrates consistency in performance. The executive remuneration
seem to be relatively stable at first glance this includes off-payroll earnings such as
stock options and their potentially dilutive capacity. Ostensibly, pensions liability and
actuarial assumptions seem reasonable. Finally, there is consistency in accounting
procedures (e.g. treating depreciation straight line or accelerated) which collectively
build confidence in investors. Externally, the strength of its competitors, long-term
business prospects, monopolistic or controlling stake of market, economies of scale, a
resistance to substitution from competitors or alternative practices make it a very
attractive investment entry point.

BIBLIOGRAPHY
WEBSITES:

64
http://www.globusremedies.com/

http://www.indiamart.com/globusremedies/

http://pharmawheel.com/pharmawheel/f/globus/BUSINESS%20PROMOTION
%20agreement.pdf

http://www.drugtodayonline.com/jobs/drug-manufacturer/globus-remedies-ltd.html

MAGAZINES:

Pharma biz

Pharma guide India

Pharma Bio World

Pharma info

ANNEXURE

Questionnaire for Consumers:

Name ____________________________
65
Age ____________________________

Sex ____________________________

Address ____________________________

Q1 which factor influence you in buying any medicine from Globus remedies Ltd.
And Radico Remedies?
A) Price B) Brand Image C) Quality

Q2 Which Brand you ask first after entering the Pharmacy Store?
A) Cipla B) Ranbaxy C) Globus remedies ltd D) Radico remedies

Q3 what do you feel about quality of Globus Remedies Ltd. Over Radico remedies?
A) Very Good B) Good C) Satisfactory D) Poor

Q4 If the desired product of medicine is not available at particular shop, how will
you respond?
A) Take another product B) Visit another shop C) suggest to have same product D) Postpone

Q5 your satisfaction level with Globus remedies ltd?


A) Highly Satisfied B) satisfied C) Poor

Q6 your satisfaction level with Radico remedies?


A) Highly Satisfied B) satisfied C) Poor

Q7 which brand you find reliable in OTC segment?


A) Cipla B) Ranbaxy C) Globus remedies Ltd. D) Other

66
Q8 Do advertisements of Globus remedies ltd and Radico remedies products
makes any effect on you?
A) Yes B) No

Q9 which sort of advertisements attracts you most?


A) Newspaper B) Magazines C) Hoardings D) Social Media

Q10 Commonly you will buy any medicines on prescription of?


A) Your doctor B) Suggested By friend C) Suggested by Chemist D) Your family tested old
one

67

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