PROJECT REPORT

ON

“MARKETING STRATEGY OF PHARMACEUTICAL

UNDER THE GUIDANCE OF: SUBMITTED BY:

MR. SUNIT MADAN HIMANSHU MOHNIA
(Business Development Manager) REG. NO.: 200620703

SYMBIOSIS CENTRE FOR DISTANCE

LEARNING (SCDL), PUNE
ACADEMIC YEAR: 2006

1
 ACKNOWLEDGEMENT

The present work is an effort to throw some light on “Marketing Strategy of

Pharmaceutical Industry”. The work would not have been possible to come to the
present shape without the able guidance, supervision and help to me by number of
people.

With deep sense of gratitude I acknowledge the encouragement and guidance received
by my organizational guide Mr. Sunit Madan (Business Development Manager)

I convey my heartfelt affection to all those people who helped and supported me
during the course of completion of my Project Report.

HIMANSHU MOHNIA
Reg. No.: 200620703

2
 NO OBJECTION CERTIFICATE

This is to certify that Mr. Himanshu Mohnia is permitted to use relevant

data/information of this organization for his project in fulfillment of the Post Graduate

Diploma in Business Administration Specialization – Marketing Management Batch:

(2006)

We wish him all the success.

Signature of the competent authority

of the Institute / Organization

Mr. Sunit Madan

(Business Development Manager)
Place: New Delhi

Date:

3
 DECLARATION BY THE LEARNER

This is to declare that I have carried out this project work myself in part fulfillment of
the Requirement for the Post Graduate Diploma in Business Administration
Specialization – Marketing Management Batch: (2006) Program of SCDL.

The work is original, has not been copied from anywhere else and has not been
submitted to any other University/Institute for an award of any degree/diploma.

Date: Signature:

Place: New Delhi Name: Himanshu Mohnia

REG NO. 200620703

4
 CERTIFICATE OF SUPERVISOR (GUIDE)

Certified that the work incorporated in this Project Report “Marketing Strategy of
Pharmaceutical Industry” submitted by Mr. Himanshu Mohnia is his original
work and completed under my supervision. Material obtained from other sources has
been duly acknowledged in the Project Report.

Date: Signature of Guide:

Place: Mr. Sunit Madan

(BUSINESS DEVELOPMENT MANAGER)
Zydus Neurosciences, Cadila Healthcare Ltd.

5
 EXECUTIVE SUMMARY

The Indian pharmaceutical industry is highly fragmented -- there are now more than
20,000 domestic manufacturers of end-use pharmaceuticals, particularly because of
the industry's low capital requirement and the lack of product patents. Only about 300
of these are in the organized sector. This structure causes intense competition,
especially in the bulk drug markets, with profitability falling as demand expands.

The import of finished pharmaceuticals is almost negligible, and confined to very

specific types like anti-cancer drugs. In 1994, the import of drugs, pharmaceuticals
and intermediates was estimated at $450 million, and included the following:
antibiotics, penicillin and its salts, erythromycin and its preparations, vitamins and
provitamins, vaccines (polio, human and veterinary), preparations containing insulin,
caustic and other hormones, and tetracycline and its preparations. For value purposes,
drugs in India are generally classified into two categories -- bulk drugs and
formulations. Due to India's low overhead costs, bulk drugs comprise the largest
sector in the country's pharmaceutical market. India’s bulk drug sector also makes up
about 6% of the international bulk drug market. Drug intermediates are used as raw
materials for the production of bulk drugs, which are either sold directly or retained
by companies for the production of formulations. Formulations can be subdivided into
generic drugs and branded or "ethical" drugs, the latter of which are made under
process patent and sold under a separate brand name. Expected short-term growth for
the two types of drugs has been 20% for bulk drugs and 15% for formulations.

Pharmaceutical Industry is one of the most intense knowledge driven industry, which
is continuously in a state of dynamic transition. Indian pharmaceutical industry is
climbing up the value chain from bringing a pure reverse engineering industry focus
on domestic market. The industry is moving towards basic research driven expert
oriented global presence and providing wide range of value added quality product and
services. The pharmacy formulation market varies radically from the consumer
market in many ways. The rules governing the pharmacy market are different except a
few over-the-counter (OTC) drugs. Pharma companies are not allowed to publicly
market their products. Marketing has to be restricted to promotional campaigns,
advertisement only in medicinal magazines, journals etc., through medical
representatives.

6
 TABLE OF CONTENT
Chapters Page Nos.
1. Introduction 01-05
2. Objectives and Scope 06-07
3. Limitations 08-09
4. Theoretical Perspective 10-59
5. Methodology and Procedure of work 60-62
6. Analysis of Data 63-85
7. Findings, Inferences and Recommendations 86-90
8. Conclusion 91-93
9. Summary of the Project Report 94-95

10. Annexure 96-109

i. Questionnaire 97
ii. Proposal 102
iii. References 107
iv. Lit of figure 108
v. Lit of Table 109

7
 CHAPTER -1
INTRODUCTION

8
 INTRODUCTION

PHARMACEUTICAL MARKETING IN INDIA: A

MACROSCOPIC VIEW

Drug & pharmaceutical industry plays a vital role in the health care of the any
country. Rapid growth of this industry requires further attention because even after 50
years of independence, India, with around 15 percent of the World population,
accounts for less than 2 percent of the drug production in the world. Annual per capita
consumption of medicine in India is less than 2% of that in Japan. Health care
expense in India is a dismal 0.8 percent of GDP compared with 12.4 percent in U.S.A.
6.5% in Japan and 6.2 percent in the U.K, despite higher incidence of disease and
malnutrition. The poverty and disease in India on one hand calls for higher standard
of healthcare and pharmaceuticals production and on the other, stultifies the growth of
industry due to poor affordability of an average Indian. Drug & Pharmaceutical
industry has therefore, encountered a tough situation which most industry have always
found difficult, to provide abundant quantity of quality products at low prices.

The Indian Pharmaceutical industry, valued at $46.2 billion has been witnessing
attractive growth rate of 15% to 20% consistently over the past decade. This growth
was build by India's large population, increasing allocation of income to healthcare
spending and exports. Exports which currently accounts for 20% of the production
value has grown by a compound annual growth rate of 34% in the past few years due
to competitive price advantages from India's low labor and other input cost

The Indian market for pharmaceutical products stands at an enormous $58.8 billion.
The big 10 companies account for over 30% of that, take away 45 marketer and
average sales don't even come any where near the $2.5 million marks, that's how
fragmented its is some 50,000 brands from over 20,00 companies growing fast
enough to embarrass rainy day mushrooms and enough diseases to savage Indian
population all several times over and turn Dr. Dolittle into Dr. Don't care.

9
GOVERNMENT POLICIES

In a country lacking the assurance of free health care for all (not to talk of an effective
health insurance system), it is the poor patient's family who must pay the bill. This
was the justification for the policy. But it killed any incentive to invest in R& D
(Research and Development), which makes global drug manufacturers what they are:
leader of mankind's war on disease. India's per capital consumption of drugs is said to
be just $3. In the US its over $100 and in Japan, over $400. India has about 20% of
the world's disease burden (with just 16% of its population). Western spending is high
because in a system where the government pays the bills, the patients get themselves
prescribed all sorts of pills for ailments that aren't terribly serious. But why is Indian
spending so low? Only 35% of the population has access to modern (read allopathic)
medicines. India has alternative system of medicines, Ayurveds, e.g. are not quacks,
neither are homeopaths who make their own medicines.

India also exports sizable quantities of drugs & pharmaceuticals. More companies are
now venturing into traditional health care systems beside modern medicine. With the
launching of new drugs policy, all bulk drug formulation and intermediaries except
five bulk drugs have been de-licensed. Many drugs that were hither to under price
control have been taken out of such control. Actually the list of controlled drugs has
been halved and is limited to 73 items.

Higher rate of return has been allowed for those drugs that are still under price
control. Companies with 51 percent foreign equity have been brought on par with
wholly Indian companies, automatic clearance would be given for 51 percent foreign
equity automatic approval would be given for foreign technology agreement as well.
Earlier such companies had restriction on the product they could manufacture or
import. A National Drug Authority is to be set up to monitor quality control and
rational use of medicine. A national pharmaceutical pricing authority is also to be set
up to fix prices in respect of drug, which would continue to be under price control
(Ramaswamy & Meerakumari 1988).

Recent budget proposal has announced a 10 percent drop in the peak customs duty,
which will benefit formulators and transnational pharmaceutical companies with high
raw material import contents, but falling traffic barriers also threaten the future of the

10
bulk drug players. However, the 8 percent increase will not have a negative impact on
formulators as the increase will enable a full set off under MODVAT (Modified
Value Added Tax). Similarly, the 10 percent reduction in the tax on income from
royalty and technical fees paid to foreign companies may not affect domestic
companies at all. But high spenders on R & D like RanbaxyTM, CiplaTM and
WockhardtTM will gain. This along with the rising of investment limits in overseas
joint ventures and offices under the Export Earners Foreign Currency Account, will
provide a strong dose of incentive for India's pharmaceutical companies to go global.
(Sakaria 1988)

The Indian pharmaceutical sector is likely to witness major changes as a result of

liberalization and pressure from GATT (General Agreement on Trade and Tariff) and
WTO (World Trade Organization). Price control are gradually being dismantled with
less than 50% of the drugs coming under purview of DPCO. This number is likely to
decrease further. In addition, as a signatory to WTO by 2010, India will be require to
follow the same product patent laws governing the west. MNCs (Multinational
Companies) in the past, have been constrained in launching new products because of
strict patents enforcement law governing their home countries. Product patent will
provide greater freedom to introduce new an advance international portfolio products.
Indian pharmaceutical companies on the other hands are likely to suffer as a result of
patent protection. It will become increasingly difficult for them to introduce new
product without investing in basic research. Intensive research requires large
investment that can be only recover by spreading costs over a greater volume, there
by reducing average costs. However, because of high industry fragmentation and a
lack of research, few domestic company are able to reap the benefit of scale.

To end the dominance of foreign drug companies, the Indian government enacted a
series of policies designed to foster self-sufficiency in the production of basic drugs.
Because these measures lowered barriers to entry, thousands of medium and small
Indian pharmaceutical companies entered the market challenging the MNCs for
control. These actions laid the foundation for today’s highly competitive domestic
industry that is capable of offering some of the lowest drug prices in the world. These
policies ended India’s dependence on expensive foreign drugs, fostered the
development of a competitive pharmaceutical industry, and guaranteed the Indian
public access to inexpensive drugs. Nonetheless, the Indian pharmaceutical industry

11
also became one of the country’s most heavily regulated. The industry currently faces
restrictions on imports, high tariff rates, ration requirements, and equity ceilings for
foreign participation.

Against this backdrop, the companies most likely to succeed will be large companies
with a wide product portfolio, those that have the ability to undertake research and
develop a strong product pipeline and those that gain or sustain export competitive
environment, it will be critical for companies to build sustainable competitive
advantage. In addition to the strategies discussed earlier, companies have
opportunities to gain an edge over their competitors, by actively managing their
product portfolio, by executing a sound globalization strategy or by becoming an
integrated healthcare company.

The Indian pharmaceutical industry is highly regulated, essentially on three aspects:

 Patents

 Price

 Product quality

The various legislations that govern the Indian Pharmaceutical Industry are:

 The Indian Patents Act 1970 (and the amendments thereafter)

 Drug Price Control Order (soon to be replaced by Pharmaceutical Policy

2002)

 The Drugs and Cosmetics Act 1940

The legal framework for the industry should be such so as to increase the strengths of
the industry, mitigate the weaknesses, void off the threats and cash in on the
opportunities.

12
 CHAPTER – 2
OBJECTIVES AND
SCOPE

13
 OBJECTIVES AND SCOPE

The present study of the pharmaceutical industry of India revolves around the
following basic objectives:

 To understand how pharmaceutical company launch their product

 To know what promotional strategies are used by pharmaceutical companies to

sell their products in the market

 To understand what is the role played by sales representatives in this regard

14
CHAPTER – 3
LIMITATIONS

15
 LIMITATIONS

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. This includes
the overall design, the sampling procedure, the data collection methods, the field
methods and the analysis procedures

The pharmaceutical industry is one of the major, most successful also rapidly growing
industries worldwide. It contributes significantly to the economies of many countries
all around the world, both as a major employer and as an export earner.

Marketing and sales of pharmaceutical products is very different from other products
such as say groceries, cosmetics, food items, vehicles, etc. One, pharmaceutical
products (apart from over the counter OTC drugs) can only be obtained from a
chemist on a doctor’s prescription. Thus here the customer is the doctor, who is well
versed in pharmacology. Two, medicines and drugs can only be prescribed by a
doctor only when it is deemed necessary for the patient’s recovery from illness; that
is, it is ethically wrong for a doctor to needlessly prescribe medicines. Under these
medical and ethical constraints, how does the pharmaceutical company promote its
products? This is the purpose and objective of the study.

16
CHAPTER – 4
THEORETICAL
PERSPECTIVE

17
THEORETICAL PERSPECTIVE

Historical Prospective

The production of bulk drug was virtually non existent in India at the time of
independence in 1947. It increased from a meager $715 million in 1962 to $2.4 billion
in 1980 and further about $8.4 billion in 1990. Production of formulation is increased
from $90 million in 1947 to $14.4 billion in 1980 to $36.3 billion in 1990. The
demand for pharmaceuticals increased due to increase in population, increase in
affordability of a section of population and government emphasis on health program.
The industry grew despite claims of price & production control. By the year 2000 the
demand for pharmaceuticals is expected to reach up to $6.72 billion per annum. There
has been 1000% growth in the number of drug manufacturers in India since 1970.
That was the year when the Indian Patent Acts and Drug Price Control Order (DPCO)
came into force (The Eastern pharmacist 1988). While the first accorded intellectual
property protection to manufacturing processes (not product formulas), the second
began regulating prices to ensure that drug manufacturer who were being allowed to
copy foreign drugs would make them cheaply available to the common man.

Indian Drug and Pharmaceutical (D & P) industry presents a picture of fast

development. Today, India manufactures most of its requirement of bulk drugs and
formulation. In fact, more than 30,000 different pharmaceutical formulation worth
$210 million are manufactured and sold in India. There are 45 major pharmaceutical
firms, each with a sizable investment and sales turnover. Investment ranges between
$1.47 million to $4.2 million the sales ranges between $2.10 million to $54.6 million
per annum. Growth in this industry was to the tune of 23.4 per cent in 1997-98. This
was phenomenal in comparison with the other industries most of which have run into
losses or very nominal profits leading to a slowing down of the growth.

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 Table: 4.1: India’s Pharmaceutical Industry
India’s pharmaceutical industry is one of the fastest growing segments of the Indian
economy with an average annual growth rate of 14 percent during 2005-2008.
Overall, the Indian market for pharmaceuticals is projected to grow at an average
annual rate of between 15 and 20 percent during 2005 - 2010. The surge in production
has been driven by legislative reforms, the growth in contract manufacturing and
outsourcing, value added foreign acquisitions and joint ventures, India’s mastery of
reverse engineering of patented drug molecules, and India’s efforts to comply with its
World Trade Organization (WTO) Trade Related Intellectual Property Agreement
(TRIPs) obligations. When India joined the WTO in 1995, its pharmaceutical exports
were valued at less than $600 million. By 2009, its exports had grown to $3.7 billion
and accounted for more than 61 percent of industry turnover. Currently, Indian
pharmaceutical companies produce between 20 and 22 percent of the world’s generic
drugs (in value terms) and offer 60,000 finished medicines and nearly 400 bulk drugs
used in formulations.

The pharmaceutical industry in India is going through a major shift in its business
model in the last few years in order to get ready for a product patent regime from
2009 onwards. This shift in the model has become necessary due to the earlier process
patent regime put in place since 1972 by the Government of India. This was done
deliberately to promote and encourage the domestic health care industry in producing
cheap and affordable drugs. As prior to this the Indian pharmaceutical sector was
completely dominated by multinational companies (MNCs). These firms imported
most of the bulk drugs (the active pharmaceutical ingredients) from their parent

19
companies abroad and sold the formulations (the end products in the form of tablets
and capsules, syrups etc.) at prices unaffordable for a majority of the Indian
population. This led to a revision of Government of India’s (GOI) policy towards this
industry in 1972 allowing Indian firms to reverse engineer the patented drugs and
produce them using a different process that was not under patent. The entry of MNC’s
was also discouraged by restricting foreign equity to 40%. The licensing policy was
also biased towards indigenous firms and firms with lesser foreign equity. All these
measures by GOI laid foundations to a strong manufacturing base for bulk drugs and
formulations and accelerated the growth in the Indian Pharmaceutical Industry (IPI),
which today consists of more than 20,000 players. As a result the Indian
pharmaceutical industry today not only meets the domestic requirement but has
started exporting bulk drugs as well as formulations to the international market.

LEADING INDIAN PHARMACEUTICAL MANUFACTURERS

India’s leading pharmaceutical companies are striving to compete not only in the
domestic Indian market, but also in the global market for both generic drugs and
original products. Sales for India’s largest 200 pharmaceutical companies grew from
$7.9 billion in 2007 to $8.6 billion in 2008, or by 9 percent. By 2008, 9 of the top 10
Indian 21 drug makers were Indian-owned firms accounting for more than 44 percent
of total industry sales. India’s top five pharmaceutical companies, in terms of sales,
are Ranbaxy Laboratories, Dr. Reddy’s Laboratories, Aurobindo Pharmaceutical,
GSK-India, and Cipla. These companies manufacture a wide range of generic drugs
(branded and non-branded), intermediates, and active pharmaceutical ingredients
(APIs).

In terms of total sales, Ranbaxy Laboratories is India’s largest pharmaceutical

company and one of the world’s top ten generic drug makers. In 2009, exports
accounted for nearly 80 percent of Ranbaxy’s sales and the United States is
Ranbaxy’s largest market. Ranbaxy accounts for 23 percent of India’s pharmaceutical
industry revenues. Ranbaxy is a vertically integrated company with a presence across
the pharmaceutical value chain, offering a range of unbranded and branded generics,
active pharmaceutical ingredients, and biotechnology products. Ranbaxy markets its
products in more than 100 countries, a sales presence in 23 of the world’s top 25
pharmaceutical markets, and has manufacturing facilities in 8 countries. Cipla, India’s

20
second-largest pharmaceutical company, is best know for its anti- AIDs drugs, and
Dr. Reddy’s Laboratories, India’s third-largest pharmaceutical company, also rely
heavily on exports as its revenues.

Table: 4.2: India’s top 10 pharmaceutical company sales ($million)

MNC PRESENCE IN INDIA:

Many of the world’s leading pharmaceutical companies have subsidiaries or other

operations in India. Multinational companies like GlaxoSmithKline (GSK) Baxter,
Aventis, Pfizer, Novartis, Wyeth, and Merck have been active in India’s
pharmaceutical market mainly through subsidiaries. The re-introduction of product
patents precipitated the return of a large number of other MNCs, some of whom left
during the process patent era. MNC pharmaceutical companies have also been
attracted by tax holidays, the deduction of capital R&D expenditures, and other
financial incentives offered by the Indian government. Industry sources indicate that
the most significant challenges facing MNCs are the uncertainly over pharmaceutical
price controls and data exclusivity.

There are approximately 34 foreign drug companies engaged in the Indian

pharmaceutical market and among them are 15 of the world’s 20 largest
pharmaceutical companies. According to FICCI, although MNCs have not launched
new products they have invested in new production facilities and R&D centers and
many are engaged in contract manufacturing, clinical trials, and other forms of
outsourcing. In 2008-09, MNCs invested more than $172 million in India’s

21
pharmaceutical industry and FDI has grown by a compound annual growth rate
(CAGR) of 62 percent during 2002-06. However, many industry experts believe that
the return of the world’s leading pharmaceutical companies will gradually erode
India’s cost advantages. According to the Organization of Pharmaceutical Producers
of India, multinational drug companies currently command 24 percent of the domestic
Indian market, through their share could rise to 40 percent by 2010.

MARKETING FUNCTIONS

“Promotion” means any activity undertaken, organised or sponsored by a member

company which is directed at healthcare professionals to promote the prescription,
recommendation, supply, administration or consumption of its pharmaceutical
product(s) through all media, including the internet. A marketing program in order to
be successful must have a right mixture of marketing mix, not to mention market
research, a quality product, extensive distribution network acceptability, strong dose
of promotion coupled with a right price. A unique feature of the pharmaceutical
market is that it is one of the most fragmented markets in the country. The maximum
market is held by small companies, the largest pharmaceuticals company holding only
6 percent of the market share. This leads to unique marketing mixes.

The Indian pharmaceutical market is small, both by Western standards and in terms of
per capita consumption. Although India is the world’s leading producer of generic
drugs, its annual per capita consumption of pharmaceuticals is among the lowest in
the world at approximately $4.50 per person, as compared with $820 in the United
States and $13 in China in 2006. The value of India’s pharmaceutical industry nearly
doubled from $3.2 billion in 2000 to more than $6.2 billion in 2009, or by an average
of 12 percent annually (table 10). According to the Associated Chambers of
Commerce and Industry of India (Assocham), the Indian pharmaceutical market grew
at an average annual rate of 13.6 percent during 2006-2010 to reach $9.5 billion in
sales by 2010. This 51 growth is expected to be driven by: access to low cost, high
volume generic drugs; mergers and acquisitions: industry consolidation; and India’s
growing importance as a pharmaceutical contract manufacturing and services
location. Approximately 80 percent of domestic industry production consists of
formulations, with the remainder consisting of bulk drugs.

22
Considering the healthcare of the Indian Public, the Govt. of India encouraged the
domestic pharmaceutical companies in India. When the international norms
recognized the product patent, the government of India enacted the Indian Patent Act
in 1970 (process patent), with the objectives of allowing the domestic companies to
grow. The Indian Patent Act recognized the “Process” to manufacture a product and
not the end “Product”. Indian companies took advantage of the Patent Act and
succeeded in producing molecules, which were under Patent Production else where, at
a cost that was lower than the original research cost. By taking the cost advantages,
the Indian Pharmaceutical companies fixed their prices lower than the prices fixed by
the Multi National Companies manufacturing the drugs. Apart from the Indian Patent
Act 1970, DPCO, FERA and increased imports tariffs also helped the growth of the
domestic pharmaceutical companies. With a view to the above effect, the
Multinational Companies’ market share, decreased from 100% in the year 1947 to
80% and 33% in the years 1970 and 1991 respectively with corresponding increase in
domestic company’s market share.

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 block 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 one-fifth, India’s share in the
global market for generic drugs is considerably higher than its share in the overall
pharmaceuticals market (approx. 2%). At the same time, India’s pharmaceutical
companies gained know-how in the manufacture of generic drugs. Hence the name
“pharmacy of the poor” which is frequently applied to India. This is of significance
not least 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 households1, which
means the majority of Indians cannot afford expensive western preparations.

23
 Fig. 4.1: Market Share of Corporate

Fig. 4.2: Market Share of MNCs & Local Companies

Between 1996 and 2006, nominal sales of pharmaceuticals on the Indian subcontinent
were up 9% per annum and thus expanded much faster than the global pharmaceutical
market as a whole (+7% p.a.). Indian companies strongly expanded their capacities,
making the country by and large self-sufficient. Nonetheless, with total sector sales of
roughly EUR 10 bn, India commands a less than 2% share in the world’s
pharmaceutical market (1966: 1.5%). This puts the country in twelfth place
internationally, even behind Korea, Spain and Ireland and before Brazil, Belgium and
Mexico. Among the Asian countries, India’s pharmaceuticals industry ranks fourth at
8%, but has lost market share to China, as sales growth there was nearly twice as high
and sales volumes nearly four times higher than in India.

24
Globalization has not caused traditional medicine to be abandoned but with higher
education, rising income and a change in lifestyle, western medical treatment is
gaining in importance. At present the population especially in rural areas still sees
western medicine as a stop-gap cure which is unlikely, though, to provide a lasting
solution to health problems. Today, about 70% of the population on the Indian
subcontinent depends entirely or at least in part on traditional Indian medicine which
is cheaper and more easily available than western drugs.

Indian companies have recognized the opportunity presented by western pharma

in search of lower costs and higher profits, and are exploiting the low cost base
and pool of highly skilled labour in their market to develop a thriving outsourcing
industry, positioning India as a key provider of contract research and
manufacturing services.

India is increasing its R&D and biotechnology focus and taking advantage of the
low R&D productivity of developed markets to gain partnerships with western
players. These alliances enable the companies to gain expertise in discovery and
development as well as maximizing revenues if and when products reach the
market.

Pharmas and biotechs in the US, Europe and Japan have realized the increasing
role of India at a global level. Many players are outsourcing non-core activities of
the research and manufacturing process. Outsourcing is a popular option, while
off-shoring via direct investment, joint venture or acquisition is also proving
successful.

Function of Sales

In India front and marketing (doctor convincing and sales) is where the action is. The
point of differentiation has been the relationship with doctors (through medical
representatives) But doctor aren't always enthused. Says Savita Mikhi, who runs a
private clinic in Delhi, "many companies believe wrongly that a nattily clad medical
representative or literature printed on glossy paper makes for impressive
communication.

25
Advertising

The various dimensions of pharmaceutical marketing are Demographic (age, sex,

family, etc), Generic (as per generic equivalent present in them), Therapeutic group,
Competitive (depending upon number of competitors present), and fifth dimension is
the time. In pharmaceutical markets, major segments considered are:

a) Consumer or Prescription markets:

These consist of individuals who go to practicing doctors.

b) Institutional markets:

These contain large hospitals, Public and Private sectors along with government’s
hospital including medical colleges.

c) Industrial markets:

These consist of bulk drugs and their formulations.

d) Over the counter (OTC) markets:

Drugs, which are non-prescription medicines and can be sold directly to end-users.
Based on product category, the pharma industry can be divided into:

a. Bulk Drugs: (The active ingredient for making formulations.)

b. Formulations: (The final form, in which the drugs are sold i.e. Syrups,

c. Injections, Tablets and Capsules)

In general, business in pharmaceutical market is conducted in two major ways, that is,
either by institutional selling or through trade business.

Pharmaceutical marketers in the USA, having just been allowed to advertise drugs on
Television, have taken the big risks. They are advertising like crazy and even have the
websites to keep patients fully informed of diseases dosages side effects and so on. In
India too, earlier this year MAA. Bozell set up Lewis Grace. Bozell, is a subsidiary
responsible for pharmaceutical advertising. Now, Ogilvy & Marther and Redeffusion
are reportedly considering similar moves. To begin with, they will try to bring their
skills to the ordinary business of making audiovisual, prints or multimedia sales

26
pitches to the doctors. This could improve the communication of OTC products,
which have been turning more love and care oriented. Johnson & Johnson's touch
therapy commercial is good example of the use of emotion. Advertising agencies will
have to educate themselves well, because the main reason that in house publicity
departments manage to torpedo the suggestion of agency help is the fact that no body
wants their wonder pills to be handled by bubble gum jingle makers. Says the
marketing manager of a small, but fast growing Indian company, "Advertising
agencies may be good for selling the image of the company as whole but at the level
of each brand, what can they do? They don't know anything."

Pharmaceutical marketing experts are aware that well timed advertising directed to
doctors tends to boost sales of the brand that spent the marketing dollars. In the case
of marketing directly to health professionals, the question is whether promotion is (as
most drug companies claim) primarily information on how the drug works or is
intended to persuade doctors to prescribe the drug more frequently.

Although there has been a lot of research on the persuasive versus informative role of
drug promotion, there is little consensus and certainly more investigation is needed in
the context of developing countries. Nevertheless, a WHO commissioned literature
review of existing evidence in this regard reveals that while doctors’ opinions on the
usefulness of the information from drug companies vary, most believe that such
information is biased.

The analysis revealed:

 Generic names of drugs are not revealed in more than 10% of advertisements.

 Only 22.7% disclosed any adverse effects.

 Just 25.1% provided any precautionary information.

 Only 51.7% cited any references.

The Thai and Indian examples contradict established norms of ethical practice in this
area. The WHO Criteria clearly states that advertisements in all forms to physicians
and health related professionals should be fully consistent with the approved scientific
data sheet for the drug concerned or other source of information with similar content.

27
Moreover, advertisements that make a promotional claim should at least contain
summary scientific information.

While these examples of advertisements focus on specific countries and companies,

this should not be interpreted as evidence of a higher prevalence of information
quality problems compared to other countries or companies. It is clear however that
the poor quality of information provided to doctors in developing countries cannot be
dismissed as infrequent and isolated cases, but rather can be viewed as a systemic
breach of responsibility and ethical norms by market leaders.

Research shows that there is a strong correlation between irrational prescribing

behaviour and the use of commercial sources of information. The impact of flawed
and incomplete information is ultimately passed on to the world’s poorest and most
vulnerable consumers. Evidence suggests that doctors in developing countries, like
their counterparts in other countries, rely heavily on drug companies for drug
information, particularly for new drugs. However, while doctors in countries like the
US, UK and Australia have access to independent sources of drug information, this is
not the case in many developing countries. This is a major challenge in terms of
providing doctors with reliable information that can then be passed on to consumers.

Marketing Research Function

Marketer, in order gain information, conducts market research, which in Indian

pharmaceutical industry can be as simple as chatting with doctors, retailers and
hospital administration or as complex as surveying a nationally representative sample
of specialists or corporate hospitals and identifying the emerging health care needs.
The pharmaceutical major are fond of syndicated data. Many companies routinely buy
ORG (Operation Research Group) panel study and C-MARKTM studies for different
brands and keep them in computer memory for easy retrieval and analysis. For them,
it just feels good to know that data can be accessed when needed. But when it comes
to developing strategies for their brands, these companies do not operate on the basis
of this data. On the contrary, CadilaTM Health care (ZydusTM) group, takes the data
very seriously. It has meetings with all of the brand managers every month to study
the implications and develop strategic actions along with top management teams. This
company is using information actively, whereas many other companies use the

28
information either as an academic appendage during a presentation of low immediate
relevance or as a defense shield during a performance review.

Marketing research data only provides a base for action in the market place, the action
which has to be implemented through various mix's of promotion. It is important to
understand that the promotional mix for any brand or organization is dependent upon
the mix of advertising, personal selling and public relation. Over use of personal
selling in pharmaceuticals via medical representatives and limitations on advertising
pharmaceutical products due to FDA (Federal Drug Administration) restrictions,
presents an opportunity to explore the role of and exploit the Public Relations
function in the pharmaceutical industry.

Pharmaceutical marketing is quite different than marketing of any other goods. Within
pharmaceutical products, marketing of prescription products is a way different from
that of over-the- counter (OTC) drugs and actual behaviour of prescribed drug market
may vary based upon various parameters. In case of prescribed drug market, typical
sales process is as follows:

Fig. 4.3: Drug requiring prescription

In this case, the patient – customer - do not have much or any say in purchase of the
product, perhaps other than spending the money. The decision makers are the

29
physicians or doctors treating the patient. They will prescribe drug of a particular
brand if they are:

- Aware of the product.

- Convinced about the utility and usage of the product.

- Reasonably certain that the prescribed drug can be made available by the drug
retailer in required amount of time.

After following the above logic, the doctor prescribes the drug, but the drug retailer
plays a major role in effecting actual sale and he may:

- Not have the prescribed product in the ready stock.

- Not consider that the prescribed product has sufficient demand to stock the
product.

- Suggest or just substitute product of the competitor company having similar

composition, most of the times without even knowledge of the prescribing
doctor.

All this will perhaps happen just because there is less brand awareness as a
consequence of less promotional efforts by the product company.

USE OF PUBLIC RELATION

Very few pharmaceutical marketers in India use public relations as a marketing tool.
Many of them think Public Relation entails sending out a few press releases, holding a
few conferences and conducting some event when company launches a new molecule
or product. In reality, Public Relation usually ends up making a point at a very
personal level. Its impact in the industry is seen at several levels affecting doctors and
brands. Some years ago, CiplaTM was forced to make use of Public Relation tools
when its major communication medium--medical representatives turned--un-
cooperative. The company conducted meetings for not more than 10 customers at a
time and ensured that thousands of such meetings took place at different locations in
the country. This helped ciplaTM in building one-to-one relationship with its
customers. Prudent use of Public Relation has also helped the organization in creating
a positive platform for direct response communication.

30
DRUG DISTRIBUTION

Many a times drugs promoted through professional service representatives do not

appear on the shelves of the retailing chemist. This can be attributed to ineffective
distribution system. Although distribution is recognized in India as an important
function, many pharmaceutical marketers accord it a mere supportive role; so the
distribution system has remained traditional with little or no innovations.
Superstockists/stockists, distributors and C& FA's (Carrying & Forwarding Agent)
have traditionally been very loyal to pharmaceutical marketers. As a result, strategic
changes in distribution arrangement were rarely recommended or carried out.
Problems, if any, were always sorted out amicably and changes, when at all, were
concerned only with adding or deleting stockists in the distribution chain. Over time
when AIOCD (All India Organization of Chemist & Druggist) mobilized retailers in
every state, pharmaceutical companies found their freedom to appoint stockist
restricted by retailer pressure.

There have been other changes too. One may view the distribution set up as a
concentric pattern with patients at the center with each ring representing a link in the
chain. It must be noted that some rings prefer by passing the next one. Some
companies, for instance, deal directly with stockists, whereas some high end products
that require highly sensitive servicing are distributed directly to doctors. Some
innovative ideas have been coming from such companies like HoechstTM,
SarabhaiTM, Sandoz (NovaratisTM) and now Nicholas ParimalTM.

In 1988 Sandoz decided to make changes in its method of giving discount to C&
F (Carrying and Forwarding Agents) through a simple innovation. Instead of paying
direct percentage on sales to agents it started paying on basis of case lots. Each case
lot weighed approximately 12-15 kg and on each case lot, it paid $ .19 - $ .32 to
C&FA. As result, SandozTM reduced the cost of operations by 1.2 percent of its total
turn over, an enormous figure when calculated in rupee terms. It is often true that
effective distribution along with right pricing differentiates a success from a failure in
market place. In India, most companies market a vast portfolio of products (that
others are also selling) and pricing decisions are delegated. In a market with many
brands meeting the same need, even the rare marketer who begins by formulating a
program based on inputs from the doctors and patients often ends up glossing over

31
question of profit while setting the price. In the old days production volume were
often kept fixed (either by the company or the licensing authority). In this state costs
were easy to measure and simple cost plus pricing used to work. Also marketers had
to live under the rules of Drug Price Control Order (DPCO), the government price
fixing instrument for essential drugs.

Since liberalization began in 1991 the DPCO has been loosing its grip and the prices
of many formulations, allowing market forces to play the regulator. Other aspects of
liberalization have made companies hungry for growth. In such a dynamic state of
existence where growth is both desirable and achievable, pricing is less simple. Lack
of strategic thinking leads to chaotic pricing. Every body agrees that intelligent
pricing can be used as a critical edge for any product. Yet in the pharmaceutical
industry, trends suggest that enough thought is not being given to such serious
decisions. A single player marketing thoughtless decision can have repercussions on
the entire market. Many marketing managers don't understand the impact of their own
decision on the market. As a result, they think of themselves as either price takers or
makers. There is rarely a marketer who wants to upset the apple cart--strategically--by
becoming a price breaker. This can be suitably illustrated with the example of
GlaxoTM: GlaxorTM, When it launched CeterzineTM an anti-allergic, played price
maker. It set a price it thought fit, then came a crowd of followers, and they were
price takers. So there was a market where GlaxoTM, UCBTM and UnichemTM were
all selling at $ .06 per tablet. Then came SOLTM. It decided to reset the scale and
change the markets dynamics So it played price breaker, selling its CeterzineTM
brand at $.023 per tablet. In 18 months it was selling higher volume then GlaxoTM
i.e., the price maker brand. GlaxoTM did not react and continued with the same price.
Today Lupin and Core are selling below SOL's price. So the price breaker managed to
start a price war, but GlaxoTM has won back the brand leadership.

DRUG PROMOTION METHOD

“The commercial needs of countless, fiercely competing pharmaceutical companies

has led them to depend on the tried and tested 3Cs: convince if possible, confuse if
necessary, and corrupt if nothing else works.”

32
Health professionals in developing countries work in overstretched and under
resourced sectors on low pay and in difficult conditions. In such conditions the
promotions from the drug companies are inviting. Disparities in health spending
between the world’s richest countries and the world’s poorest countries are such that a
relatively cheap promotion in a developing country will generate much more interest
there than it would in a developed country.

The aim of drug promotion is to persuade people to buy more drugs and/or to pay
higher prices. This is done by increasing the perceived value of the drug via one or
more of several approaches including:

Increasing the perceived frequency and/or severity of the indications.

Widening the indications to include more people.

Increasing the perceived likelihood and magnitude of benefits.

Decreasing the perceived likelihood and magnitude of harms.

Increasing the use of the drug for longer durations.

The World Health Organization defines drug promotion as including: “all

informational and persuasive activities by manufacturers and distributors, the effect of
which is to induce the prescription, supply, purchase and/or use of medicinal drugs.”
The main aim of promotion is not to inform but to persuade. Consumer goods
advertisements rarely convey much information about the features of the product.
Instead the emphasis of much advertising is on associating consumption of the
product with positive feeling.

Regardless of where they are operating, most drug companies try to identify where
people are on the following behaviour change stages and then deploy sophisticated
marketing techniques to motivate them to move one or more stages towards repeat
use:

Each move requires motivation and decision making so drug companies study how to
understand human motivations and decision-making. Public relations techniques

33
bypass people’s defences by giving the impression that the message is coming from a
trustworthy source.

Table 4.3: Doctor-directed promotion methods

ISSUES RELATING TO PROMOTION:

The ethical promotion of prescription medicines is vital to the pharmaceutical

industry's mission of helping patients by discovering, developing and marketing new
medicines. Ethical promotion helps to ensure that healthcare professionals have
access to information they need, that patients have access to the medicines they need
and that medicines are prescribed and used in a manner that provides the maximum
healthcare benefit to patients.

It is understood that national laws and regulations usually dictate the format and
content of the product information communicated on labelling, packaging, leaflets,
data sheets and in all promotional material. Promotion should not be inconsistent with
locally approved product information. Promotional information should be clear,
legible, accurate, balanced, fair, objective and sufficiently complete to enable the
recipient to form his or her own opinion of the therapeutic value of the pharmaceutical
product concerned. Promotional information should be based on an up-to-date

34
evaluation of all relevant evidence and reflect that evidence clearly. It should not
mislead by distortion, exaggeration, undue emphasis, omission or in any other way.
Every effort should be made to avoid ambiguity. Absolute or all-embracing claims
should be used with caution and only with adequate qualification and substantiation.
Descriptions such as 'safe' and 'no side effects' should generally be avoided and
should always be adequately qualified.

Promotion should be capable of substantiation either by reference to the approved

labeling or by scientific evidence. Such evidence should be made available on request
to healthcare professionals. Companies should deal objectively with requests for
information made in good faith and should provide data which are appropriate to the
source of the inquiry.

All printed promotional materials must be legible and include:

the name of the product (normally the brand name);

the active ingredients, using approved names where they exist;

the name and address of the pharmaceutical company or its agent responsible for
marketing the product;

date of production of the advertisement; and “abbreviated prescribing

information” which should include an approved indication or indications for use
together with the dosage and method of use, and a succinct statement of the
contraindications, precautions and side effects.

The same requirements shall apply to electronic promotional materials as applied to

printed materials. Specifically, in the case of pharmaceutical product related websites:

The identity of the pharmaceutical company and of the intended audience should
be readily apparent;

The content should be appropriate for the intended audience;

The presentation (content, links, etc.) Should be appropriate and apparent to the
intended audience; and

India-specific information should comply with drugs & magic remedies act.

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ETHICS IN PHARMACEUTICAL PRODUCTS PROMOTION

Recently the Organization of Pharmaceutical Producers of India (OPPI), which is a

premier organization of pharmaceutical manufacturers in India, has revised its model
code on standards of promotion activity to medical practitioners. This model code
aims to restrict pharmaceutical companies from providing ‘freebies’ to medical
practitioners so as to reduce influence on prescribing drugs of a particular company.
This is based on the International Federation of Pharmaceutical Manufacturers
Associations (IFPMA) code which is considered as a model code. Section 2.2 of
General Principles of OPPI code states that ‘No financial benefit or benefit-in-kind
(including grants, scholarships, subsidies, support, consulting contracts or educational
or practice-related items) may be provided or offered to a healthcare professional in
exchange for prescribing, recommending, purchasing, supplying or administering
products or for a commitment to continue to do so’. This clearly states the refined
position of OPPI code which is based on a noble intention of having a rationale for
prescribing a product of a particular company by the medical professional without any
influence so as to benefit the patient. It gives more freedom to medical professionals
to choose the treatment option for patients on a case by case basis if they are not
influenced by pharmaceutical companies. But it is a well-known fact that there are
many companies trying to influence the prescribing habit of doctors with their kind
gesture towards the practitioner, which ultimately tempts other companies also to lure
the medical practitioners by providing freebies, apart from scientific information
including literature, brochure and other scientific inputs. The condition of the Indian
pharma industry is also pathetic with more than 20,000 manufacturing units that sell
more than 70,000 brands.

It is virtually impossible for any medical practitioner or even a common man to

remember the whopping number of brand names. Every company or manufacturer
wants to survive in this cut-throat competition and thus direct their efforts towards
these unhealthy practices. Though the OPPI code has tried to amend some of these
unethical practices in tune with IFPMA code, which is welcomed by trade
associations, some lacunae exist. What about companies that are not members of
OPPI? What if companies continue to promote their product in an unscientific way? Is

36
there any mechanism by which unscientific promotion by companies is restricted?
Besides, the companies that are not members of OPPI may not follow the code and
can circumvent the provisions, still continue to influence the medical practitioners.
The Drugs and Magic Remedies (Objectionable Advertisements) Act in India states
only the conditions for which a drug cannot be directly advertised. At present there
are no provisions to monitor how companies, that are not members of OPPI, adhere to
standard practices. While the new code by OPPI may not be music to the ears of
medical practitioners since many of them would be devoid of the favours accorded to
them by certain pharmaceutical companies. At the same time it is required that the
prescription generated at the hands of the practitioner takes care of the patient’s
clinical condition and, more importantly, the economic status of the patient. Let the
medical practitioner be an unbiased or an impartial judge of what is required and for
which patient. What is needed is a concrete, directed and focused effort by all players
of the pharmaceutical industry and other stakeholders as well, in order to regulate the
promotional activities of pharmaceutical companies to medical practitioners. As OPPI
has modelled its code on the IFPMA code, all trade associations of pharmaceutical
industry, government, NGOs and common men should join hands together to curtail
the practice of influencing medical practitioners. Governments can frame and enact
laws and legislations that would take care of marketing practices and create a
monitoring authority that would monitor the promotional activities of pharmaceutical
companies in India.

PROBLEMS AND PROSPECTS OF SALES PROMOTION IN

PHARMACEUTICAL INDUSTRY

Marketing communications strategy will set out exactly how to promote an

organization, initiative, product or service across a whole range of different media –
from advertising campaigns to search engine optimization. It should set clear
objectives so that you can measure success and crucially, it should provide the best
solution within the available budget.  It is part of the marketing mix, which includes
all the means by which a company communicates directly with present & potential
customers. It is the process of presenting an integrated set of stimuli to a target with
the intent of evoking a desired set of responses within the target market & setting a
channel to receive, interpret & act upon messages & identifying new communication

37
opportunities. Marketing communication is a systematic relationship between a
business and its market. There are twelve different communication tools available to
the marketer: personal selling, advertising, sales promotion, direct marketing, public
relation, sponsorship, exhibitions, merchandising, the internet, word of mouth and
corporate identity. These communication tools constitute the marketing
communication mix. Each element of these communication mix should integrate with
other tools of communication mix so that a unified message is consistently reinforced.
Sales promotion comprises various marketing techniques  which are often used
tactically to provide added value to an offering with the aim of accelerating sales and
gathering market  in that particular segment. In pharmaceutical marketing
communication the main objective is to make an impression and more important is to
make an impression long lasting. In the current rat race several national and
multinational pharma companies have gained remarkably for their exceptional
communication  strategies for sales promotion.While many pharmaceutical companies
have successfully deployed a plethora of strategies to target the various customer
types, recent business and customer trends are creating new challenges and
opportunities for increasing profitability. In the pharmaceutical and healthcare
industries, a complex web of decision-makers determines the nature of the transaction
(prescription) for which direct customer (doctor) of pharma industry is responsible .
Essentially, the end-user (patient) consumes a product and pays the cost .

The pharmaceutical industry is the world's largest industry due to worldwide revenues
of 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, Dr.Reddy's , CIPLA and Dabur have already
established their presence. 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

38
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.
There can be several challenges for pharma marketing with global channels opening
up from all directions it has become an art of its own kind. Some of the important
aspects can be as the followings

Increased competition and unethical practices adopted by some of the pharma

companies.

Low level understanding of customer knowledge (Doctors, Retailers,

Wholesalers).

Dissimilar customer perception.

Quality of medical representatives.

Recruitment process of medical representatives.

High training and re-training costs of sales personnel.

Busy doctors giving less time for sales calls.

Poor territory knowledge in terms of business value at  the level of medical   
representatives.

Valuing of prescription from each doctor in the list of each sales person.

Unknown value of revenue from each retailer in the territory.

l). Sales forecasting from field sales level to actual level.

Absence of analysis on the amount of time invested on profitable and not-so-

profitable customers and lack of time-share planning towards developing customer
base for future and un-tapped markets.

39
The pharmaceutical distribution channel is indirect with usually three channel
members i.e. depot/C&F, stockiest and chemist. Pharmaceutical companies appoint
one company depot or C&F agent usually in each state and authorized stockist(s) in
each district across the country. Company depot/C&F sends stocks to authorized
stockists according to the requirement. Retail chemists buy medicines on daily or
weekly basis from authorized stockiest as per demand. Patients visit chemists for
buying medicines either prescribed by a doctor or advertised in the media. Here
patient is end customer and doctor is direct customer for any pharmaceutical
company. But for the doctor, customer (patient) is more important so he wants an
effective supply chain management from prescribed company. And for
pharmaceutical companies their customer that is doctor is more important that's why
they emphasize more on supply chain management. Ultimately end customer is
benefited out of this.

For marketing different pharmaceutical products companies require more and more
skilled field force to develop good rapport with their direct customer (doctor).
Moreover field force should have good product knowledge and USP of their products
over other so as to convince doctors and PULL the demand for their products i.e. from
Doctor to Retailer to Stockist to CFA to company. In this system, doctors are the core
customers and the major thrust is given to build and retain these customer because
they are pulling the demand for products hence companies  also give main emphasis
in building and retaining these customers. All efforts are being put for generating
secondary sales i.e. from stockist to retailer. Now-a-days the companies are a 
Ensuring of auto demand with limited availability and maximum liquidation of the
products is the main characteristic of this approach. For retaining and developing
customers, the companies normally provide gifts like sponsorship for various
conferences like RSSDI, FOGSI, APICON, UPCON etc. For example Dabur having
PASS (Professional Academic and Scientific Services) activities for promoting its
chronic therapy range. The relationship between clinicians and representatives has
always been good and pharmaceutical companies have provided, and still provide, the
major economical support for customers' continuous medical education. Something
needs to be done to find a solution to this problem that takes into account the needs of
both pharmaceutical companies and their representatives on one side and physicians
on the other, for a better professional interaction. Some times they were also mixed

40
with CSR activity sponsorship like free health camps, diabetic camps etc. Of late the
pharma companies also ventured into the rural areas and along with doctors they are
also approaching the RMP doctors to bridge the gap between the product and their
ultimate customers – the patients.

Over the last couple of years, pharma marketing professionals are slowly changing
their strategies. This drift is driven by market forces. Patients' understandings of the
disease and disease management have also seen a positive shift. Today, a doctor is
subject to a lot of questioning and reasoning by the patients both about the disease and
disease management. Hence, we see some of the products in the ''direct-to-consumer''
mode of sale wherever the regulatory requirements permit. For Indian companies
marketing differentiation coupled with aggressive selling is the key. Even today more
than 50 per cent of Indian pharma market is rural and the ''GATT Effect'' will not be
immediate in rural India. To know the doctor's mind and also to occupy a place there
with a brand; the brand manager must be in the market with the doctors and
understand the specific needs of the doctors and design promotion.  Aggressive sales
push at the doctor and retailer level and consistent repeat visits can drive a brand
ahead. An old saying is that ''Doctors have a very strong memory and hence forget
what they do not want to remember.'' The challenge to a marketing man today is to
ensure that his brand falls in the category of ''Want to remember'' with as many
doctors as possible. This is an extremely difficult task, needing a lot of innovative
approach. This is precisely the real task of a sales personnel in pharmaceutical
marketing .Slowly and steadily the industry is growing to beat all the possible hurdles
away. Hopefully success is not far away.

PROMOTIONAL STRATEGIES OF PHARMA COMPANIES IN

INDIA

The key determinants of success of any Pharmaceutical industry, besides the cost and
availability of capital are brand building. In the pharmaceutical business in India,
most companies work on monthly, bimonthly or quarterly promotional cycles; and
promotional resources are carefully allocated to ensure that the company achieves
maximum sales. Most organisations bring out ‘strategy guides, which provide details
on inputs, information on competition, approaches to detailing and sometimes a chart
on incentives.

41
Strategies are much more than plans to achieve goals. They differ from operating
procedures because they are drawn from changing market situations and are thus live
and dynamic. The term ‘market’ refers to all actual and potential buyers of a product
or service, who possess purchasing power, authority and willingness to purchase. The
global pharmaceutical market is currently estimated to be over US$ 400 bn and is
projected to grow at about 5 per cent per annum over the next few years. Due to the
rapid growth of the pharmaceutical industry, marketing has also become an important
determinant of the survival and growth of various pharmaceutical companies, amidst
the increasing competition faced by them.

The marketing strategies that are employed by pharmaceutical firms can be broadly
classified into two types as follows:

 Promotional strategies

 Defense strategies

Promotional strategies

Co-marketing: While co-marketing is a new concept all over the world, it started in a
nascent form even before the 1970s in India. Co-marketing strategy enables
organisations to focus more on market reach, penetration and brand share. The
ultimate objective of such approaches is to develop brand image and brand equity.
Unichem promoted saffola oil (of Bombay Oil Mills) to cardiologists as a part of their
promotional strategy. Later on, as the advantages become apparent, companies like
Johnson & Johnson and Wipro used this strategy to promote their baby care products
to doctors.

Brand image marketing: Pharmaceutical companies identify and build their strength
by calibrated strategy to ensure that doctors and customers see them in favourable
light. Research reveals that there is a direct relationship between a brand’s awareness
level, its image and its market share. Thus companies now a days are adapting this
strategy of improving the brand image, which in turn improves their sales and
profitability.

42
Seven steps to a better brand image: Most of the pharmaceutical companies are
concentrating on this strategy to nurture the image of the company and in turn market
their products successfully.

The type of image, a company wants to brandish, can be furnished with the following
seven steps.

Play host: In this, a small group of doctors is invited and briefed whenever a new
brand is introduced. Earlier, unique has used this strategy to a good effect for
Metrogyl remains a market leader even in the wake of new molecule.

Respect doctors’ schedules and get to the point straightway. Also make the
presentation brief and memorable.

Be factual: Factual and realistic information is effective. Case studies, clinical

trials, promotional trials, cure rate of drugs and side effects all need to be collected
and documented properly to create a favourable perception.

Maintain respect: A conversation followed by a thank you note is usually

adequate. Medical representatives and managers need to be trained accordingly to
create a favourable impression.

Be brief and subtle: Initially to create perceptions and awareness about a

company, information should be given in encapsulated form so that the customer
is not burdened with more information.

Identify your uniqueness: The overall strategy may include an advertising or a

public relations agency handling everything.

Develop field staff to maintain quality standards

Involvement marketing

It started in a very small way in India, by way of brand promotion — Abdec Drops,
‘Healthy Baby’ contests, Ferradol’s Milkshakes (provided at hospital gatherings) and
Parke Davis giving away monograms to final year MBBS students at ‘specific
disease’ symposia in medical college in the 1960s. Lupin, Kopran and Cadila started
launching almost every product with the involvement of the target groups. From

43
1980s, involvement of the general medical fraternity in the product development has
become almost a standard industry practice.

Wockhardt advertised its tonic (Winofit) and anti-obesity drug (Flabolin) without the
brand name in a local press and told patients to ask their general practitioners and
family physicians what the anti-obesity drug was all about.

Lupin involved chest specialists in the working of the company. From 1990 onwards,
companies like Torrent, Glaxo and Cipla started targeting individual through direct
marketing.

Extra-value strategy: Some of the brightest marketers keep rises low but necessarily
the lowest and find ways to offer value-extras that the lowest price competitors can’t
match. Dr Reddy’s Laboratories started this trend and today every company is extra
cautious about pricing any new product.

Medico-marketing: The purpose of medico-marketing is to promote corporate

products and services with the help of medical representatives and by other direct
response marketing methods. The Continuous Medical Education (CME) model has
been successfully used in medico-marketing.

Successful medico-marketing requires careful planning and organisation of

management.

Examples of medico-marketing strategy used to promote pharmaceutical products are:

Win Medicare celebrated a medico-marketing event for its new product Hepa-Merz, a
hepatoencephalopathy-related product. The medical concept was fully developed with
creative communication as a key platform. An innovative hypothesis, “liberation of
ammonia” to treat hepatoencephalopathy, was discussed among the gathering of
specialists at different regional centres. All of them were convinced of its efficacy.

The Upjohris’ medical-marketing consultants programme for the launch of new

products was exceptionally successful. The company took A-class medical
practitioners as marketing consultants in a few specific geographic areas and worked
through them for a period of two years, including the supervision of pre-launch and
post-launch tracking.

44
The right media mix strategy

The right media mix, utilised by the company, can promote its products considerably.
The various promotional media used are:

Medical magazines and Journals (Physician’s Digest, Lancet, Headache, Drug

Today, CIMS, MIMS, IDR etc)

Conferences, Seminars and Symposia

Promotional trials

Newspaper advertising

Free-standing supplements

Conference videos

Video messages

Marketing strategy based on innovative distribution: In 2005, the marketing

strategy of the pharmaceutical company Sandoz included change in method of giving
discounts to carrying & forwarding agents (C&FAs) through a simple innovation.
Instead of paying direct percentage on sales to C&FAs, it started paying on the basis
of case lots. Each case lot weighed approximately 12-15 kg and on each case lot, Rs
8-10 was paid to the C&FA.

Table 4.4: Major alliances between Indian & International companies:

S.No Indian Company International Partner Objective Place of Operation
1 Cipla Novopharm Marketing International
2 Dr. Reddys’ Biomed Marketing International
3 Lupin Labs Fujisawa, Merck, Marketing & International
  Global Corp. Manufacturing  
4 Ranbaxy Elililly, Aventis, Marketing, Supply International
  Glaxo of Both bulk drugs & in India
SmithKline
5 Knoll, Glaxo Marketing India
Beecham
6 Panacea Biotec Chiron Marketing India
As a result, the company not only improved the sales of its products, but also
managed to reduce the cost of operations by 1.2 per cent of its total turnover.

45
Public relations consultancies (PRCs)- an important part of marketing strategies: Most
of the pharmaceutical companies in India and abroad are nowadays hiring the services
of PRCs as part of their marketing strategies. Public relations cover a broad spectrum
of activities — from internal communication to external publicity and also financial
reporting. The major task of PRCs is to build a one-to-one, positive, effective,
motivating and self-assuring relationship with the consumer through mass or
individual media. It encompasses brochures, industry booklets, mailings, catalogues,
corporate communication devices and websites. All of these have their importance as
marketing tools.

Example: The services of PRCs had been utilised by Cipla as apart of its marketing
strategies for the launch of new products, when its major communication medium i.e.
medical representatives turned uncooperative. The company conducted meetings for
not more than 10 customers at a time and ensured that thousands such meetings took
place at different locations in the country. This helped Cipla in building one-to-one
relationship with its customers.

Contract Sales Organisations (CSOs)- A strategic Marketing Tool: Pharmaceutical

companies are using the services of CSOs as strategic weapon for increasing the
geographical coverage of their products, as well as to have competitive edge at key
moments.

Advantages of CSOs are:

Minimised fixed overheads

Managed resources at the launch of new product

Increased sales force whenever need arises. For eg. when a brand is under threat
from the competitor

Provide creative, short-term brand resources

Help in providing market development initiatives

Allow companies to economically reach physicians they would not ordinarily be

able to call on, providing additional sales coverage tailored to a specific need

46
Entering into alliances, acquisitions, mergers & joint ventures with MNCs to market
and sell their products: The reach of marketing and distribution network is an
important determinant of success in the pharmaceutical industry. Hence, as an
important marketing strategy, companies are strengthening their marketing and
distribution network and thus improving their reach and efficacy.

A way to do this is to enter into alliances and joint ventures with other companies.
Nicholas Piramal is the prime example of a company that has entered into a number
of alliances with MNCs to market its product.

Clinico-promotional study

A clinico-promotional study is usually done by pharmaceutical companies which need

to take decisions concerning their own products and how they are to be sold. The only
way to properly execute an economic clinico-promotional study is thorough
understanding of a drug’s properties, the disease for which it has been approved, and
the marketing issues involved.

Every marketer needs the help of results from an economic clinico-promotional study
when he has to substantiate the claims of his brands, and demonstrate how the product
is differentiated in a crowded pharmaceutical market.

Eg. A company conducted clinico-promotional study for Syu, a nutritional protein

product, among adolescents at different orphanages and established the weight and
height benefits to a highly convincing degree. This became a platform for its
promotion.

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Direct-to-Consumer (DTC) marketing strategy

This is recent approach which has been used by various pharmaceutical companies
mainly abroad (USA and UK). USA has pioneered DTC advertising. The reason DTC
has become an area of interest over the last few years, is that it is a way of influencing
people who actually use the medicine.

DTC essentially means a campaign or communication programme intended for and

targeted to consumers. In relation to pharmaceutical products, the consumers may be
patient or family members, caregivers or the general public. Initially, doctors were
worried about the patients failing to understand the drug related information and
impairment of doctor /patient relationship, but DTC did not lead to any such
apprehensions and is now a mainstay of product promotion in the US.

Internet has totally rejuvenated direct marketing and DTC as a promotional medium.
Resources like Euro RSCG’ s Media Turf’s online tracking can help track individual
doctors online, which is immensely useful for pharma companies to deliver targeted
communication to them.

Defense Strategies

Besides promotional strategies, a number of defense strategies have also been used by
various pharmaceutical companies to market, promote & extend the life cycle of their
products.

These are:

New Indications or Uses of the Product: In US, a new indication can extend a
product’s protected life as the market exclusivity period is extended by three years for
each new indication. Often, companies more important indications during the launch
of the product & less important indications are introduced when product is at decline
stage in its life cycle. Eg. Lovenox, a product for curing thrombosis was launched
with one indication in orthopedic surgery by Aventis. Currently, it has eight
indications. By revealing more & more indications of the same drug, the company has
more than doubled its original peak sales for this drug.

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Reformulation

A similar strategy to gaining new indications is to produce a new formulation on an

existing marketed drug. This line extension will often be associated with a more
convenient dosing form or a longer lasting formulation. This strategy is most
commonly used where old technology is an immediate-release formulation requiring
multiple daily doses is replaced by a ’new technology’ once daily formulation of the
drug.

Pfizer defended its hypertensive drug - Procardia for a number of years with this
strategy.

Switching strategy

This strategy relies on moving patients from an older drug (whose patent is about to
run out) on to the newer version (which has patent protection). The theory is that by
the times generics of the original drug hit the market after its patent has expired,
patients have already been switched to newer drug and are unlikely to switch back to
the older, now generic drug. Pfizer successfully used this strategy to switch patients
on to Procardia XR from its original drug Procardia near the time, when Procardia’s
patent was about to expire.

Paying generic companies off

A dubious strategy of paying generic makers to delay them from entering the market
has also been used. E.g., Hoechst Marion Roussel (now part of Aventis) paid Andrx
US$ 10 million per quarter not to launch its generic version of Cardizem.

As a consequence of the mounting evidence of counterfeiting in Asia, companies in

India and abroad are hiring services of institutes such as ’Pharmaceutical Security
Institute’.

Counterfeit medicine is a product that is deliberately mislabeled with respect to

identity and/or source. Such medicines can affect the company’s image. Therefore,
companies are hiring the services of various agencies to check this grey marketing.

It can thus be concluded that the key determinants of success of any Pharmaceutical
industry, besides the cost and availability of capital are brand building (or brand

49
Strength) and marketing strategies adopted by them as these have a profound impact
on growth and market share of all pharmaceutical companies.

GLOBAL TRENDS IN PHARMA PROMOTIONS & MARKETING

Fig. 4.4: Pharma’s Current Model

As the Verispan promotional audit data show, pharmaceutical companies spend a
disproportionate amount of their promotional budgets on face-to-face detailing. The
$11.2 billion does not even include the cost of samples! In contrast, the amount spent
on ePromotion is minuscule.

For every 100 sales rep visits to physician offices, only 56 actually see the physician
and of these 27 merely drop off samples without talking to the physician. Schecter
claims that when reps actually get to talk to physicians, the call only lasts 4.6 minutes
on average.

Fig. 4.5: Reduction in U.S. Primary care promotional spending

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Given these statistics, Schechter said Merck is on course to significantly reduce its
promotional spend by 2010 and estimates it will cut its field force spending by 9% in
2007 (see figure at left; which shows that the field force bar is lower in 2007 than in
2005.). According to PharmExec.com, however, "Merck spokeswoman Amy Rose
wasn't having any of it [talk about a 9% reduction in detailing]." "This is not a head-
count reduction," said Rose. "Our new model calls for an increased use of technology
[and metrics], and it is much more customer-focused."

If the recent iPhone craze proves anything, customer focus means including more
technology-based channels in the marketing mix. While pharma is focused on face-to-
face selling, physicians – like other consumers – are changing their media habits as
illustrated in this Google chart.

Fig. 4.6: Media consumption habits have changed

Consumers are spending more and more time online and less and less time reading,
listening to the radio, or watching TV. Media spending by all advertisers – not just
pharma – needs to shift to new channels that consumers are using and, according to
Google, this shift is overdue.

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 Fig. 4.7: Consumers are spending

Engaging Customers on Their Terms

Schecter and other pharma business leaders are shifting and fully intend to leverage
innovation and technology. This shift will add a new dimension to pharmaceutical
advertising:

Engagement.
Reach and Frequency are the traditional factors used to measure marketing
effectiveness and ROI. Reach is how many "eyeballs" see your promotional message
and frequency is how often they see it. Technology adds another dimension to the
analysis: Engagement, which also encompasses depth. Certainly, pharmaceutical
products demand communications that offer engagement and depth much more so that
packaged goods for example. Several advertising associations are working to develop
a new metric to measure engagement.

This sounds exactly what Merck's Schechter had in mind when he talked about
embracing new ways to engage physicians. The most effective way of engaging
physicians and consumers using innovative technology is through Web 2.0 social
networking tools. The pharmaceutical industry so far has a poor track record when it
comes to using these tools effectively. And, like any powerful tool, when used
improperly, Web 2.0 tools can be "risky."

Back in 2006, Pharma Marketing News hosted a reader survey to predict future trends
in the pharmaceutical marketing mix. The survey asked readers for their opinions
regarding the impact and risk of several physician marketing channels. They were
also asked how they saw the mix shifting in the next few years.

52
When evaluating impact, respondents were asked to think of reach, credibility, and
content richness as important factors -- the greater these attributes, the greater will be
the impact. Risk factors, on the other hand, include potential to cause customer
dissatisfaction or push back, increased regulation, negative publicity, etc. If marketers
should avoid the channel, then risk would be high.

The results of the survey can be plotted in graphical form:

Fig. 4.8: Physician Marketing Channels

Let's focus on traditional face-to-face promotion (rep) and eDetailing or epromotion.

While face-to-face promotion has a very high impact potential it is also risky and is
becoming even more risky, according to survey respondents. [Risky because of
increasing physician push back, denying reps access to physicians, and state laws
attempting to limit access to physicians by sales reps. This is what the downward red
arrow is showing. In fact, the tip of the arrow is where this channel may be at today!
eDetailing or ePromotion also has high impact. At the time this survey was run,
eDetailing was thought to be as “risky” as face-to-face selling, but now it has the
potential at least of being LESS risky and MORE impactful than traditional sales reps.
Hopefully, Merck's rejiggering of its marketing mix towards new technology will
become the standard by which other pharmaceutical companies evaluate their own
marketing plans. Or maybe, Merck has a unique product mix for which technology is
better suited to promote. In that case, we may not see other pharma companies follow
Merck.

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EVIDENCE OF ETHICAL FAILURES

Doctors are the main targets for the promotional activities of drug companies in
developing countries. With the power to prescribe and a high status in society their
opinion of a drug very often determines its sales success. It is therefore not surprising
that the majority of marketing spend by industry leaders goes towards direct-to-doctor
(DTD) promotion.

These marketing practices are common to most contexts whether in developing

countries or developed. However some issues are of particular concern to developing
countries where health budgets are smaller and resources have to stretch much further.
For instance in developing countries the lack of government funding for professional
development activities for health professionals can make drug company sponsored
meetings more valuable. Lack of resources for surgeries and even personal medical
resources can also make offers from drug companies more inviting. The sheer volume
of promotion as well as the types of cases we have come across in our research raises
serious concerns about whether drug companies are able to regulate their promotion
activities effectively, while ensuring high standards of consumer protection.

Gifts

Among the promotional tactics employed by pharmaceutical companies is the practice

of giving gifts to doctors. In developing countries, these range from small items such
as gifts, pens and notebooks to expensive foreign holidays, televisions, air
conditioners and even jewellery. However what stands out in the developing country
context is the practice of giving lavish personal gifts that have no pretence at medical
value. A Kashmiri newspaper reported a doctor as saying “Medical representatives of
pharmaceutical companies whose products may or may not be efficacious without any
qualms offer cash, refrigerators, colour televisions, laptops, PCs, mobile phones,
ovens, phone bills, cars, tuition fee of their children, and lots more.”

Similarly, one Indian doctor noted, ‘“The newer multinational and major players in
the market have started to hire marketing professionals and take their brand promotion
very seriously and many try to build a personal rapport with the doctor by
remembering special occasions like their birthdays and anniversaries and besides the
regular festivals. The companies have started to spend more and more in keeping the

54
doctors and their employees happy rather than their customers. 'Gifting' of air
conditioners, washing machines, microwaves, cameras, televisions, and expensive
crystals is a normal accepted norm nowadays. So are frequent pampering in form of
CMEs [Continuing Medical Education meetings] and lectures in star hotels followed
by lavish dinners and cocktails.”

Such practices not only contravene the national industry code on ethical promotion,
but also are often nontransparent. These gifts may be hidden in official company
reports of spending under budget lines for seminars and events. As a result,
establishing an accurate picture of the actual costs associated with gifts to doctors can
be difficult for health watchdogs and consumer groups who are concerned about the
influence of drug companies on health professionals.

BUT DOES THIS GIFT GIVING MATTER?

A sales representative in India reported: “Since there is no documentation of these

gifts, the doctors can switch over from one product to another when perks of one
company exceed that of another. The doctors neglect other aspects of the drug like its
efficacy, suitability for the patient, the cost etc. With so many multinational
companies competing in India, the money spent over these activities is increasing day
by day.”

Our research brought to the fore three key areas where the interaction between
pharmaceutical companies and health professionals suggests an unhealthy
relationship, with significant conflicts of interest.

First, health professionals’ belief about gifts shows recognition of the fact that gifts do
have an impact on prescribing behaviour. This can promote irrational drug use by
consumers that is not based on reliable data on real needs, safety, efficacy and price of
the drug, but rather on the marketing tactics of individual companies. Second,
examples of the way in which the gift relationship between companies and doctors is
cultivated reveals a disregard for ethical practice. Finally, examples of how
prescribing behaviour is affected by gifts suggest that such practices negatively affect
consumer health and safety and may increase unnecessary spending on healthcare.

55
HEALTH PROFESSIONALS’ BELIEFS ABOUT GIFTS

As a marketing strategy, in cultivating a gift relationship with doctors, drug

companies are in effect creating a relationship of reciprocity where, upon receiving a
gift, doctors may feel obligated to respond. Whether they are conscious of it or not is
not relevant. Existing literature suggests that doctors hold a range of views about
gifts. In general doctors readily accept gifts that are smaller and socially more
acceptable. There is a sense of ‘unique invulnerability’, that only ‘other’ doctors are
influenced by gifts. This theory of unique vulnerability suggests that doctors are more
willing to say that other doctors are influenced more than they are themselves, but this
hypothesis warrants additional research.

Fig. 4.9: Hypothesis warrants additional research

Key findings showed a high level of interaction between the pharmaceutical industry
and the medical profession. Although the latter recognize the influence of these
interactions on prescriptions and the elevation of the cost of the final product, they
find it appropriate to receive benefits.

86% receive medical samples frequently.

39% receive desk gifts.

19% receive invitations to congresses.

12% receive free lunches.

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Half of the doctors believe that receiving benefits from the pharmaceutical industry
has an influence on medical prescription, but only 27% accept this as influential in
their own prescriptions.

Doctors may be unaware of the fact that drug companies influence their prescribing
behaviour. Although many have suggested that doctors should distance themselves
from drug companies, it is easier said than done.

Sales representatives

According to their career profile, pharmaceutical sales representatives spend most of

their business time on the road, talking with pharmacists, hospital personnel,
physicians, patient advocacy groups, and even retirement homes, increasing the
visibility of their company’s products and the volume of their sales.

One to one visits from sales representatives are proven to be the most effective way to
promote drugs to doctors because they can identify the behaviour change stage and
the main motivators and decision-making styles of the person they are selling to and
adapt their approach accordingly. The main influencing techniques used by drug sales
representatives try to focus on doctors’ tendencies to trust experts, trust their peers
and trust likable (friendly and/or attractive) people, to be consistent with their
commitments and to act on reciprocal obligations when given gifts. Visits from sales
representatives are often coordinated with other methods such as providing gifts, free
samples or running advertising campaigns.

A study published in June 2007, revealed that medical sales representatives noted that
there were often inconsistencies between what they had been told to tell the doctor
during promotional visits and what was detailed in the literature. Also, doctors noted
that they received literature only if they repeatedly requested it. These social
responsibility failures pose significant threats in the context of a country like India,
which is a poorly regulated environment and is further complicated by a significant
uneducated consumer base and a highly privatised health system. Personal comments
by sales representatives and health professionals alike from many parts of the
developing world are suggestive of an ethically questionable relationship fostered by
drug companies.

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Brand education

It is clear that companies face a conflict of interest in providing an accurate picture of

negative impacts of their product. This presents a problem for doctors everywhere, but
particularly in developing countries, who rely heavily on the drug information
provided by the company and in many cases cannot access independently verified
data. However, doctors can also be complicit in the problem when they choose to
endorse a company’s marketing campaign or assume the role of a seemingly
“independent” key opinion leader to shape a positive perception of the drug among
health professionals. In some cases the pharmaceutical industry manages to coopt
academia and unduly influence what health researchers reveal about their findings, as
the non-profit organisation Doctors for Research Integrity asserts. One significant
result is that medical journal articles on new drugs may be ghost written and
influenced by drug companies’ public relations (PR) firm.

Despite obvious failures in their promotions vetting and compliance systems for
company codes, the industry continues to insist on a model of pure self-regulation.
What is needed is a rigorous system of oversight and continuous consultation among
key stakeholders including consumer advocates, the drug industry, government
agencies, and health professionals.

CAN SELF-REGULATION WORK?

"All advertising is inherently unethical. That's how you sell things" said a New York
attorney. Selling drugs is like selling any other commodity. Pharmaceutical
companies choose to spend more on medical drug promotion rather than on research
and development because drug promotion is what earns them money. There have been
numerous studies which have incontrovertibly stated that drug promotion influences
prescribing practices, a fact that is not acceptable to many doctors. If drug promotion
were not so successful, would the companies spend billions marketing their ware?

The World Health Organization (WHO), in an attempt to support and encourage the
improvement of health care through the rational use of drugs and to curb unethical
marketing practices, came out with a landmark "Ethical criteria for medicinal drug
promotion" in 1988 and has recommended their implementation to its member
countries. This document defines drug promotion as "all the information and

58
persuasive activities by manufacturers and distributors in order to induce the
prescription, supply, purchase and/or use of medicinal drugs". It also suggests what
can be considered appropriate hospitality and gifts. There is evidence that drug
utilization problems are increasingly encountered in many developing countries due to
the unethical marketing practices of the pharmaceutical industry. Unfortunately the
guidelines drawn up by the WHO, are flouted in practice with impunity since there
are no effective legislative measures to support them.

The International Federation of Pharmaceutical Manufacturer's Association which had

first suggested a self regulatory code of pharmaceutical marketing practices in 1981,
adopted the revised version in 1994. There seems to be obvious double standards in
adoption of the code. While in the developed countries, these firms often publish
reasonably ethical advertisements which are published in medical journals, the very
same companies promote the same drug for different indications in developing
countries. The information is also insufficient, sometimes contains unproven scientific
claims and is published by many medical journals from these countries. In an attempt
to get a grip on the situation the International Committee of Medical Journal Editors
suggested that editors must take full responsibility for what appears in their journals.
Many journals appointed committees to examine advertising material before
publication. Yet this was beyond journals in many developing countries who were
eager to grab the money that advertising (ethical or unethical) brought in.

Even though it has been proven time and time again that drug advertising in India is
unethical, nothing much is being done to curb it. The annual conferences of the
various national bodies of medical specialities are a glaring example of how deep the
rot has spread. Today no medical conference is organised without getting financial
support from the pharmaceutical industry. In return for the lavish financial assistance,
companies are allowed to select speakers, choose the topics for discussion, advertise
their brand image and so on, a situation akin to the indoctrination done in terrorist
camps. If this situation is allowed to continue we shall have a nation full of doctors
who rely on the drug companies to dictate what they should prescribe.

Unfortunately, though India had a head-start in this direction with the constitution of
the Drug Enquiry Committee in 1930 under the chairmanship of Sir R.N. Chopra
which scrutinized the pamphlets of drugs which made spurious claims, we have not

59
made a dent in this direction. The Drugs and Magic Remedies Act which came into
force in 1955 and was amended in 1961, 1967 and in 1992 have not been enforced
due to the apathy and general disinterest of the health care fraternity and the industry
refuses to be cowed down by legislative enforcements. Hamdard Dawakhana was
asked to recall 40 drugs. But they chose to file a writ in Supreme Court in 1959 on the
grounds that their right to free speech and right to carry on trade and business were
violated. The Supreme Court however, dismissed the petition. The drug industry fast
learnt to take advantage of the loopholes in the law and continued with unethical
marketing practices. The problem became so serious that S. Narayen, Commissioner,
FDA Maharashtra, in the foreword to a book on the Drugs and Magic Remedies act
by S.W.Deshpande in 1994, admitted that 'economic liberalization seems to give the
impression that manufacturers have the right to sell and the market place is what must
decide the rules of the game. In the dizzy of activity, various ploys are used to sell the
product. Some of these not only mislead the consumer but can also be harmful'.

The internet is perhaps one of the greatest boons to the medical establishment.
Doctors are able to check the validity of information given to them by drug companies
and therefore it is now being reported that drug companies are hesitant to tell outright
lies as before. But the industry relies on the fact that doctors are busy people who
would not find the time to counter check information they have received. The ever
innovative marketing executives have come up with yet another brilliant ace in the
form of direct-to-consumer (DTC) advertising. This is the advertising of branded
drugs through popular media. In India we are already exposed to television
advertisements for inhalers in bronchial asthma, insulin for diabetes mellitus. This is a
scaled down, modified version of DTC advertising. If DTC is approved, then drug
companies will dictate what doctors prescribe through their patients.

A small silver lining is perhaps the efforts of a few medical colleges where
undergraduate students and interns are taught to critically analyze drug promotional
material and are sensitized to the "tricks of the trade" of the pharmaceutical
companies. The "one on one" interview with the medical representative is perhaps the
most powerful tool of drug promotion which is followed worldwide. Interns are now
being taught to "take control" of these interviews and use them to get reliable
information. Videos have been made with the assistance of the WHO and are being
used to train interns on some aspects of dealing with medical representatives. It is too

60
early to judge what impact these interventions will have, but it must be kept in mind
that tiny drops of water make a mighty ocean.

These efforts, though isolated and small at present, will nevertheless reach a critical
mass which shall be self propagating one day. It is hoped that in future we shall have
a new generation of doctors who demand that all drug promotion be ethical. Unless
this demand comes from the medical establishment who refuse to take lavish gifts, eat
lunches and dinners sponsored by drug companies, and attend CME programmes paid
for by the companies we can never expect drug companies to self regulate.

Consumers trust doctors to act in the best interests of their patients. However, most
consumers are largely unaware of the influence of the pharmaceutical industry’s
marketing on the very health professionals they rely on. Between 1995 and 2005, the
percentage of total spending on sales and marketing was by far the biggest corporate
expense for the pharmaceutical industry. The excesses of drug marketing are well
recognized by industry insiders. A survey conducted by PricewaterhouseCoopers
showed 94% of industry stakeholders said that pharmaceutical companies spent too
much money on advertising.

Weak regulatory capacity…

Even in India, a fast emerging economy with a pharmaceutical industry of its own and
a relatively strong civil society, there is inadequate oversight of the drug industry.

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According to a 2003 memorandum of the All India Drug Control Officers
Confederation, in order to be effective, the number of drug inspectors needed to more
than quadruple from 700 to 3000.

Results in risks to consumer safety

Campaigners for the rational use of drugs say that regulatory authorities in India are
slow to protect consumers from drugs that have been banned, withdrawn, or marketed
under restrictions in North America, Europe, and many other Asian countries. For
example, Rofecoxib, the internationally recalled antiarthritis drug sold by Merck &
Co. as Vioxx, Ceoxx and Ceeoxx, was among some of the controversial drugs
available in the domestic market in 2009.The drug was officially banned in India, in
October 2004, a month after the official Merck recall. Dr C.J. Shishoo, a trustee at the
Consumer Education and Research Centre, a CI member and consumer action group
based in Ahmedabad, observes that at least half a dozen drugs with dubious safety
profiles are still being marketed in India as there were no adverse reports available
with the regulator.

This is supported by a senior official from the central drug regulatory department in
India who was reported as saying, “Currently our mechanism is grossly inadequate to
tackle the issues related to pharmacovigilance as there are no public interaction
systems wherein the doctors or patients can share their experiences with the regulator
directly. Since the department is also facing severe people crunch, it is not able to
dedicate special cells or people with the task of collecting patient responses. Hence,
whenever there is a recall of a drug abroad, we do not have any relevant data to take
follow-up actions. This makes the department always dependent on the drug alerts of
the US Food and Drug Administration or European regulators to initiate an action
here.”

Despite the obvious role aggressive marketing played in magnifying the harmful
impact of drugs like VIOXX12, many governments assert that they favour a co
regulatory approach (i.e. industry code compliance and legislation) to ensure ethical
drug promotion. In practice though, most governments relegate drug marketing to
self-regulation by the industry itself. Legislation in many countries is outdated and
does not necessarily cover consumer protection concerns for modern drug promotion
methods via disease awareness campaigns, patient groups or the internet.

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Weak codes of conduct

Moreover, many industry-based systems for monitoring drug promotion mainly rely
on complaints mechanisms. These mechanisms are largely inadequate because too
many violations are missed. This conclusion has been supported by a review of
research in a 2009 report by the World Health Organization (WHO) and Health
Action International (HAI).

In addition, the sanctions meted out by industry bodies are often negligible and do not
serve as a deterrent for irresponsible behaviour by the companies or their employees.
If there are no sanctions, or only small fines are imposed when a violation is
discovered, then the deterrent effect is minimal. It may be more cost effective from
the company’s point of view, given the large investment it has already made on
advertising, to pay the fine for an extended period of time rather than withdraw the
advertisement.

THE IMPACT OF IRRESPONSIBLE MARKETING

Developing countries face multiple health challenges as a result of widespread

poverty and under-funded public health systems, and it would be unfair to place them
all at the door of the pharmaceutical industry. However the question to be asked of
pharmaceutical companies is whether, in this context, their marketing practices help
or hinder efforts to improve health and on at least three counts the answer appears to
be ‘no.’

In 2009, the Indian National Commission on Macroeconomics and Health labelled 10

out of 25 top selling brands of medicines in the country as being either “irrational or
non-essential or hazardous.” Those brands are listed in the table below and include a
number of market leaders. These issues are important in developed and developing

63
countries but are particularly pressing in developing countries where each dollar that
is misused is a dollar that can’t easily be replaced.

Pushing the wrong pills

Finally there is the question of whether the pharmaceutical industry is simply too
market driven. Operating in a competitive market and with falling revenues there is
immense pressure on companies to deliver the next ‘block buster’ drug. The
inevitable pressure on companies is to focus on the wealthiest markets and the most
marketable conditions. This has led to a concentration on ‘me too’ drugs that tap into
lucrative markets but add little additional medical value and even ‘disease mongering’
or the medicalisation of conditions that had previously been seen as lifestyle issues
and only in extreme cases a cause for medical intervention.

By promoting drugs that are not needed, pharmaceutical companies could detract
from efforts to improve the overall public health of consumers in developing
countries. It is true that many other factors such as poor training and a lack of
regulatory infrastructure are also at the root of these problems. However as global
leaders, with financial clout to affect change, drug companies and particularly the
market leaders have social responsibilities in ensuring their marketing activities do
not lead to negative outcomes for patients and consumers of their products.

GlaxoSmithKline

What they say: “We are aware of the sensitivity and concerns regarding the
marketing of medicines and we are absolutely committed to high ethical standards.
We have developed marketing codes and policies and provide training to guide sales
representatives, to ensure that they behave ethically and comply with the law.”

What they do: Following communications on our research questionnaire, a member

of staff at GSK’s Corporate Responsibility team said: “I have forwarded your details
to someone else at GSK and if they are interested in participating, they will contact
you directly.” We received no response or further acknowledgement to our queries
from GSK.

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Sanofi-Aventis

What they say: “In its promotional practices, Sanofi-Aventis adheres to both national
and international codes governing the profession. The Group has also developed
responsible marketing guidelines that cover promotional materials, congresses and
seminars, pharmaceutical sales calls and post-marketing studies. Continuous training
for medical sales representatives (who number 35,000 worldwide) is designed to
ensure the quality of their presentations during promotional visits.”

What they do: Unlike most of their counterparts in the industry, this company did not
allow us to speak directly to senior CSR managers. After being forced to engage with
the company through the only means available – an on-line query form – we received
no response from the company on their marketing practices in emerging markets.

STRENGTHS AND WEAKNESSES OF INDIA’S PHARMACEUTICAL

INDUSTRY:

India’s comparative advantages lie in its cost competitiveness, its reverse engineering
experience, its large pool of less expensive English-speaking scientific and
engineering workers, and its well-developed chemical industry infrastructure. India’s
pharmaceutical companies can also operate at much lower profit margins that their
Western counterparts. Today, India produces some of the cheapest drugs in the world,
especially because labor costs are 50 to 55 percent cheaper than in the West. Industry
experts indicate that infrastructure costs are 40 percent lower and fixed cost are
estimated to be 12 percent to 20 percent less that in the United States and Western
Europe. Consequently, India can produce bulk drugs that cost 60 percent less that in
the West and can open a production plant in India 40 percent cheaper than in
developed countries. Because of this, India has become a hub for pharmaceutical
research and development and clinical trials for many leading foreign pharmaceutical
companies.

65
Table 4.5: Strengths and weaknesses of India’s pharmaceutical industry

The challenge facing pharmaceutical marketers in the next decade will be to

demonstrate value of product through promotional innovation, combined with the
required emphasis on efficiency and safety of their product. To do so, they should turn
to pharmacoeconomics--an evolving field that examines the issues in the context of
the market's health care system. Health care system, of what is understood of the term,
differs from country to country, place to place and city to city. Lay persons in India
tend to examine only single patient cost. But from a social perspective one may want
to know what sort of treatment option minimizes overall costs. In the future the
degree of fragmentation is likely to decline significantly wide product portfolio and
distribution strength could become a key competitive advantage among the larger
players. Smaller players focused on research and development will probably be
approached for alliance by larger companies. Domestic companies with International
research and development or marketing ties are likely to succeed. In long term as
companies established major presence in other parts of wider health care
pharmaceuticals chain, there is likely to e an emergence of a new set of competitors --
the integrated health care firms -- that will have significantly greater power than pure
pharmaceutical companies.

66
 CHAPTER – 5
METHODOLOGY &
PROCEDURE OF WORK

67
 METHODOLOGY & PROCEDURE OF WORK

A Research Methodology defines the purpose of the research, how it proceeds, how to
measure progress and what constitute success with respect to the objectives
determined for carrying out the research study. The appropriate research design
formulated is detailed below.

Exploratory research: this kind of research has the primary objective of development
of insights into the problem. It studies the main area where the problem lies and also
tries to evaluate some appropriate courses of action. The research methodology for the
present study has been adopted to reflect these realties and help reach the logical
conclusion in an objective and scientific manner. The present study contemplated an
exploratory research

Research Design

The research design is the basic framework, which provides guidelines for the rest of
the research process. The present research can be said to be exploratory. The research
design determines the direction of the study throughout and the procedures to be
followed. It determines the data collection method, sampling method, the fieldwork
and so on.

Nature of Data

Primary Data: Primary data is basically fresh data collected directly from the
target respondents; it could be collected through Questionnaire
Surveys, Interviews, Focus Group Discussions Etc.

Secondary Data: Secondary data that is already available and published. It could
be internal and external source of data. Internal source: which
originates from the specific field or area where research is
carried out e.g. publish broachers, official reports etc.

External Source: This originates outside the field of study like books, periodicals,
journals, newspapers and the Internet.

68
Data Collection

Primary data: Primary data was selected from the sample by a self-
administrated questionnaire in presence of the interviewer.

SAMPLE SIZE:
Sample size : 100
Sample area : New Delhi
Sample Unit : Officials of many pharmaceutical companies, medical
Practioneers, medical representatives in New Delhi
SECONDARY DATA: Secondary data was collected through
Articles,
Reports,
Journals,
Magazines,
Newspapers and
Internet
Sampling Technique

Random sampling technique is generally employed to extract the fruitful results. This
includes the overall design, the sampling procedure, the data collection methods, the
field methods and the analysis procedures

Sampling Procedure Actually Employed:

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.

Analytical Tools:

Simple statistical tools have been used in the present study to analyze and interpret the
data collected from the field. The study has used percentiles method and the data are
presented in the form of tables and diagrams.

69
 CHAPTER – 6
ANALYSIS OF DATA

70
 DATA ANALYSIS

1. For how many years you are practicing as a medical practicener

(Doctor)?
 Less than one year ---------------------------------- 17 per cent
 From one to five years ----------------------------- 32 per cent
 Five to Ten years ----------------------------------- 36 per cent
 More than Ten years ------------------------------- 12 per cent
 Can not remember --------------------------------- 03 per cent

40%
35%
30%

25%
20%
15%
Less than five years
10% Five to ten years
5% Ten to Twenty years
More than twenty years
0%
Can not remember
Less than five 17%
years
Five to ten years 32%
Ten to Twenty 36%
years
More than twenty 12%
years
Can not remember 3%

Fig 6.1: Practicing as a medical practicener

Interpretation:
At the initial stage of the research, an attempt was made to understand the
profile of the doctors in terms of their experience in the industry. Great care
was taken to ensure that the sample is adequate and representative of the
universe.

71
2. Do you agree that India’s pharmaceutical industry is one of the fastest
growing segments of the Indian economy?
 Agree -------------------------------------- 43 per cent
 Strongly Agree --------------------------- 37 per cent
 Disagree ---------------------------------- 09 per cent
 Strongly Disagree ----------------------- 04 per cent
 Do not know/ Can not say ------------- 07 per cent

45%

40%

35%

30%

25%

20%

15% Agree
Strongly Agree
10%
Disagree
5% Strongly Disagree
0% Do not know/ Can not say

Agree 43%
Strongly Agree 37%
Disagree 9%
Strongly Disagree 4%

Do not know/ Can 7%

not say

Fig 6.2: The fastest growing segments of the Indian economy

Interpretation:
India’s pharmaceutical industry is one of the fastest growing segments of the
Indian economy and this is also one of the vital industrial segments which are
directly related to the health of the nation.

72
3. Do you agree that the marketing strategy of the pharmaceutical industry
should be different from the marketing strategy in non-pharmaceutical
segments?
 Agree ------------------------------------ 50 per cent
 Strongly Agree ------------------------- 32 per cent
 Disagree -------------------------------- 10 per cent
 Strongly Disagree -------------------- 04 per cent
 Do not know/ Can not say ---------- 04 per cent

50%
45%
40%
35%
30%
25%
20%
Agree
15% Strongly Agree
10% Disagree
5% Strongly Disagree
0% Do not know/ Can not say

Agree 50%
Strongly Agree 32%
Disagree 10%
Strongly Disagree 4%

Do not know/ Can 4%

not say

Fig 6.3: Pharmaceutical segments

Interpretation:
The structure and the dynamics of the pharmaceutical industry are different
from that of other industrial domains. This is what necessitates the
pharmaceutical sector to formulate a unique marketing strategy to suit their
industry requirements and that appears to be different, in practice and
normative sphere, from other industries.

73
4. Do you agree that institutional selling is quite prevalent when it comes to
pharmaceutical market in India?
 Agree ------------------------------------- 44 per cent
 Strongly Agree ------------------------- 30 per cent
 Disagree -------------------------------- 10 per cent
 Strongly Disagree --------------------- 06 per cent
 Do not know/ Can not say ------------ 10 per cent

45%

40%

35%

30%

25%

20%
Agree
15%
Strongly Agree
10% Disagree
5% Strongly Disagree
Do not know/ Can not say
0%

Agree 44%
Strongly Agree 30%
Disagree 10%
Strongly 6%
Disagree
Do not know/ 10%
Can not say

Fig 6.4: Pharmaceutical market in India

Interpretation:
In general, business in pharmaceutical market is conducted in two major ways,
that is, either by institutional selling or through trade business. The
respondents were of the opinion that institutional selling is quite prevalent in
the Indian pharmaceutical industry.

74
 5. Do you agree that the pharmaceutical companies need to use innovative
and better promotional measures for selling their products?
 Agree -------------------------------------- 60 per cent
 Strongly Agree --------------------------- 37 per cent
 Disagree ---------------------------------- 01 per cent
 Strongly Disagree ----------------------- 00 per cent
 Do not know/ Can not say ------------- 02 per cent

60%

50%

40%

30%

Agree
20%
Strongly Agree
Disagree
10%
Strongly Disagree
Do not know/ Can not say
0%

Agree 60%
Strongly Agree 37%
Disagree 1%
Strongly 0%
Disagree
Do not know/ 2%
Can not say

Fig 6.5: Innovative and better promotional measures for selling their products
Interpretation:
Even though it appears to be a serious industry on which the health of the
nation rests, a deeper understanding of the industry will make it clear that
business practices and sales promotion measures are a common thing and
gradually becoming more aggressive and competitive among the
pharmaceutical companies in India.

75
6. Does the Pharmaceutical companies offer gifts to the doctors to influence
their prescriptions in favour of their company medicines?
 Yes -------------------------------------------- 95 per cent
 No --------------------------------------------- 01 per cent
 Do not know/ Can not say ----------------- 04 per cent

100%

90%

80%

70%

60%

50%

40% Yes
No
30% Do not know/ Can not say

20%

10%

0%

Yes 95%
No 1%
Do not know/ 4%
Can not say

Fig 6.6: Prescriptions in favour of their company medicines

Interpretation:
Pharmaceutical marketing experts are aware that well timed advertising directed
to doctors tends to boost sales of the brand that spent the marketing dollars. In the
case of marketing directly to health professionals, the question is whether
promotion is (as most drug companies claim) primarily information on how the
drug works or is intended to persuade doctors to prescribe the drug more
frequently. The practice of offering gifts to the doctors to influence their
prescriptions is a common strategy among the pharmaceutical companies.

76
7. Out of the following which one is more correct when it comes to the
promotional strategy of pharmaceutical companies in the view of the
doctors?
 They aim to inform about the product ----------------- 22 per cent
 They aim to persuade to purchase --------------------- 60 per cent
 Other motives -------------------------------------------- 03 per cent
 Do not know/ Can not say ----------------------------- 15 per cent

60%

50%

40%

30%

They aim to inform about

20% the product
They aim to persuade to
10% purchase
Other motives
0%
Do not know/ Can not say
They aim to 22%
inform about the
product
They aim to 60%
persuade to
purchase
Other motives 3%
Do not know/ 15%
Can not say

Fig 6.7: Promotional strategy of pharmaceutical companies

Interpretation:
The promotional strategy of the pharmaceutical companies is more oriented
towards persuading the doctors to prescribe their products and the patients to
purchase their products than simply to display information on the quality and
availability of the product. This is one criterion which makes the marketing
strategy of the pharmaceutical companies different from that of others.

77
8. Do you agree that unethical standards exist in the promotion of
pharmaceutical products in India?
 Agree ------------------------------------- 52 per cent
 Strongly Agree ------------------------- 20 per cent
 Disagree -------------------------------- 20 per cent
 Strongly Disagree --------------------- 03 per cent
 Do not know/ Can not say ------------ 05 per cent

60%

50%

40%

30%

20% Agree
Strongly Agree
10%
Disagree
0% Strongly Disagree
Do not know/ Can not say
Agree 52%
Strongly Agree 20%
Disagree 20%
Strongly Disagree 3%

Do not know/ 5%
Can not say

Fig 6.8: Promotion of pharmaceutical products in India

Interpretation:
Adherence to ethical standards while pursuing the promotional strategy for selling
their products is a concern in the pharmaceutical industry. It is an accepted fact
that the promotional measures does contain unethical practices. It is for the
government, the industry and the consumers to put a comprehensive effort to
ensure that the practices of unethical standards are withdrawn from the health
industry.

78
9. Your recommendation to the industry and government regarding the
promotional strategy of the pharmaceutical companies? You can choose
more than one option.
 Implement, improve and monitor legislation ----------------- 74 per cent
 Measures to improve the transparency of drug companies’ marketing
activities ---------------------------------------------- 86 per cent
 Stop the practice of gifts to doctors ----------------------------- 67 per cent
 Ensure codes of conduct on drug promotion ------------------- 70 per cent
 Other measures ----------------------------------------------------- 12 per cent
 Do not know/ Can not say ---------------------------------------- 01 per cent

90%
Implement, improve and monitor
legislation
80%
M easures to improve the
70%
transparency of drug companies’
marketing activities
60%
Stop the practice of gifts to
doctors
50%
Ensure codes of conduct on drug
40%
promotion

30%
Other measures
20%

10% Do not know/ Can not say

0%

Fig 6.9: The industry and government regarding

Interpretation:

Whilst the pharmaceutical industry clearly has an important role to 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.

79
10. Do you think that the entry of Multinationals is a Major Challenge to the
domestic Players in the Pharmaceutical Market and are they ready to
face the Challenges of the Foreign Players?
 Yes ----------------------------------------------- 36 per cent
 No ------------------------------------------------ 54 per cent
 Do not know/ Can not say--------------------- 10 per cent

60%

50%

40%

30%
yes
no
20%
cant say

10%

0%

yes 36%
no 54%
cant say 10%

Fig 6.10: The Challenges of the Foreign Players

80
11. What type of Marketing Strategy would you prefer to expand your
Market size?

45%

40%
35%

30%
25%

20% B2B
15% B2C
Both
10%
5%
0%

B2B 23%
B2C 32%
Both 45%

Fig 6.11: Market size

 B2B-------------------------------------------------------------- 23 PER CENT
 B2C -------------------------------------------------------------32 per cent
 Both -------------------------------------------------------------45 percent

81
12. What type of Marketing Strategy does you as More Profitable?

50%
45%
40%
35%
30%
25%
B2B
20%
B2C
15%
Both
10%
5%
0%

B2B 24%
B2C 47%
Both 31%

Fig 6.12: More Profitable

 B2B-------------------------------------------------------------- 24 per cent
 B2C ------------------------------------------------------------- 47 per cent
 Both ------------------------------------------------------------- 31 percent

82
13. What do you think is the Major challenge from the Marketing point of
view for the Pharmaceutical Industry in India?
 Fragmentation of the market ---------------------------- 38 per cent
 Market risk due to lack of price control mechanism- 22 per cent
 MNCs ------------------------------------------------------ 23 per cent
 Others ------------------------------------------------------ 17 per cent

40%

35%

30%

25%

20%
fragmentation of the market

15%
risk due to price control
mechanism
10% MNC's

5% Others

0%

fragmentation of 38%
the market
risk due to price 22%
control
mechanism
MNC's 23%
Others 17%

Fig 6.13: Major challenge from the Marketing

83
14. What innovative distribution channel do you suggest to better market your
products?
 Better consumer supply chain---------------------------------------------34 per cent
 Emotional Branding ------------------------------------------------------- 42 per cent
 Alliance with other corporate leaders for promotion of the product-12 per cent
 Greater media participation and power branding-----------------------10 per cent
 Others ------------------------------------------------------------------------ 02 per cent

45%

40%

35%

30%

25%

20%

15% better supply chain

emotional branding
10%
corporate alliances
5% greater media participation
others
0%

better supply 34%

chain
emotional 42%
branding
corporate 12%
alliances
greater media 10%
participation
others 2%

Fig 6.14: Suggest to better market your products

84
15. Are you aware that the pharmaceutical companies in India are shifting
their focus from conventional method of marketing to non-conventional
method of marketing?

 Yes --------------------------------------------86 percent

 No ---------------------------------------------05 percent

 Do not know/ Can not say------------------09 per cent

90%
80%
70%
60%
50%

40% yes
30% no
cant say
20%
10%
0%

yes 86%
no 5%
cant say 9%

Fig 6.15: The pharmaceutical companies in India are shifting their focus from
conventional method of marketing

85
16. Do you think that market ethics/ medical Ethics are a major factor in the
new distribution channel of marketing?
 Yes ----------------------------------------------------- 57 per cent
 No ----------------------------------------------------- 28 per cent
 Do not know/ Can not say -------------------------- 15 per cent

60%

50%

40%

30%
yes
20% no
cant say
10%

0%

yes 57%
no 28%
cant say 15%

Fig 6.16: Distribution channel of marketing

86
17. Do You Think That These Non-Conventional Marketing Methods Are
Effective Methods Of Pharma Marketing In The Present Age?

 Yes -----------------------------------------------77 percent

 No ------------------------------------------------12 percent

 Do not know/ Can not say--------------------11 per cent

60%

50%

40%

30%
yes
20% no
cant say
10%

0%

yes 36%
no 54%
cant say 10%

Fig 6.17: Pharma Marketing in the Present Age

87
18. Do you believe that technology utilization and innovative distribution
channels will help in marketing of Pharma products in India?

 Yes------------------------------------------ 75 per cent

 No------------------------------------------- 07 percent
 Do not know/ Can not say--------------- 18 per cent

80%

70%

60%

50%

40%
yes
30%
no
20% cant say
10%

0%

yes 75%
no 7%
cant say 18%

Fig 6.18: Distribution channels will help in marketing of Pharma products in India

88
19. Major weakness of the pharmaceutical industry’s marketing strategy.
 Branding --------------------------------- 07 per cent

 Publicity --------------------------------- 09 percent

 R&D ------------------------------------- 77 percent

 Do not know / can not say ------------ 07 per cent

80%

70%

60%

50%

40%
branding
30%
publicity
20% R&D
10% cant say

0%

branding 7%
publicity 9%
R&D 77%
cant say 7%

Fig 6.19: Major weakness of the pharmaceutical industry’s

89
20. Do you follow branding of products as a marketing strategy?
 Yes ----------------------------------------------------------------------- 74 percent
 No ------------------------------------------------------------------------ 05 percent
 Do not know/ Can not say -------------------------------------------- 21 percent

80%

70%

60%
50%

40%
yes
30%
no
20% cant say
10%

0%

yes 74%
no 5%
cant say 21%

Fig 6.20: Products as a marketing strategy

90
21. Do you have a dealer network? Do you sell directly or through dealers?

As regards their marketing strategy, it could be derived from their responses

that they have a large dealer network. A customer may also contact their
branch office in his/her area to get the names and addresses. They can also
supply sections directly. For smaller lots, the traders/ dealers may be
contacted.

91
22. Do you think that foreign direct investment (FDI) should be allowed in
the pharmaceutical sector in India?

 Yes------------------------------------------------- 21 percent

 No-------------------------------------------------- 43 percent

 Do not know/ Cannot say----------------------- 36 percent

45%

40%

35%

30%

25%

20% yes
no
15%
cant say
10%

5%

0%

yes 21%
no 43%
cant say 36%

Fig 6.20: Pharmaceutical sector in India

92
 CHAPTER – 7
FINDINGS,
INFERENCES &
RECOMMENDATIONS

93
 FINDINGS, INFERENCES & RECOMMENDATIONS
India's pharmaceutical market currently stands ninth in the world market for
pharmaceuticals with a 1.5% share. The market was valued at more than $3 billion
last year (1998). At its annual growth rate of 15% (almost double the world's 6%
annual growth rate), this market is expected to reach $6 billion by 2001 and should
more than double to $13.3 billion in 2006. India's official OTC market currently
stands at over $130 million, and the industry's heart disease sector is expected to grow
from $90 million now to more than $350 million in 2009.

Current demand in the Indian pharmaceutical sector stands at about $4 to $5 billion,

and is forecast to increase at an annual rate of 15 - 20% in the future. Nevertheless,
average per capita expenditure on pharmaceuticals in India is only $3 -- compared to
$412 in Japan, $222 in Germany and $191 in the US. This is due in part to the
prevalence of alternative healing methods in India, such as ayurvedic medicine and
homeopathy, but also because prices for drugs have been kept artificially low by the
Indian government. In fact, India's pharmaceutical industry is one of the most highly
regulated industries in the country. Price controls have a strong effect on profitability
in the industry, and weak patent protection poses a long-term threat to investment in
India's drug market. Foreign firms also find it difficult to operate in India due to
arbitrary Bureau of Industrial Cost and Pricing (BICP) pricing changes, arbitrary local
FDA decisions, high import duties (about 42%) and complex import procedures.

However, while the pharmaceutical sectors in India will most likely stay regulated in
the short term, there are plans for reform. The sheer size and growth of India's
domestic pharmaceutical industry is making it increasingly difficult for the
government to regulate prices for every single firm, and pressure from the World
Trade Organization is also speeding up discussions within the national government to
improve patent protection. As a result, foreign pharmaceutical firms can expect
improved market opportunities in India's enormous drug market over next several
years.

The Indian pharmaceutical industry is highly fragmented -- there are now more than
20,000 domestic manufacturers of end-use pharmaceuticals, particularly because of
the industry's low capital requirement and the lack of product patents. Only about 300

94
of these are in the organized sector. This structure causes intense competition,
especially in the bulk drug markets, with profitability falling as demand expands.

For value purposes, drugs in India are generally classified into two categories -- bulk
drugs and formulations. Due to India's low overhead costs, bulk drugs comprise the
largest sector in the country's pharmaceutical market. India’s bulk drug sector also
makes up about 6% of the international bulk drug market. Drug intermediates are used
as raw materials for the production of bulk drugs, which are either sold directly or
retained by companies for the production of formulations. Formulations can be
subdivided into generic drugs and branded or "ethical" drugs, the latter of which are
made under process patent and sold under a separate brand name. Expected short-term
growth for the two types of drugs has been 20% for bulk drugs and 15% for
formulations.

The import of finished pharmaceuticals is almost negligible, and confined to very

specific types like anti-cancer drugs. In 1994, the import of drugs, pharmaceuticals
and intermediates was estimated at $450 million, and included the following:
antibiotics, penicillin and its salts, erythromycin and its preparations, vitamins and
provitamins, vaccines (polio, human and veterinary), preparations containing insulin,
caustic and other hormones, and tetracycline and its preparations.

Essential drugs comprised of antibiotics, antibacterial, anti-TB, anti-parasitic, and

cardiovascular constitute a major portion of turnover of the industry. Indian
companies dominate this class of drugs with a market share of 71%. Multinational
companies are reluctant to enter these markets as most of them are under government
price controls.

Pharmaceutical Industry is one of the most intense knowledge driven industry, which
is continuously in a state of dynamic transition. Indian pharmaceutical industry is
climbing up the value chain from bringing a pure reverse engineering industry focus
on domestic market. The industry is moving towards basic research driven expert
oriented global presence and providing wide range of value added quality product and
services. The pharmacy formulation market varies radically from the consumer
market in many ways. The rules governing the pharmacy market are different except a
few over-the-counter (OTC) drugs. Pharma companies are not allowed to publicly
market their products. Marketing has to be restricted to promotional campaigns,

95
advertisement only in medicinal magazines, journals etc., through medical
representatives. It is not a mean of mass communication, which is usually applicable
to consumer products. In the process of pharmaceutical marketing, market
segmentation, targeting and brand differentiation is considered to be challenging
compared to the consumer marketing.

Unlike any other businesses, marketing mix and its operatives for Pharma industry are
very peculiar. The pharmaceutical industry is one of the few which cater to unique
situations. Here the decision maker is the prescriber i.e. doctor while actual user of the
product is a patient. Patient purchases product only because of doctor’s advice and
hence product should satisfy the conditions of physician. Even if all other parameters
are correct, the product might still fail because of improper promotion. Personal
selling is the major promotional method in pharma marketing.

Brand management, particularly promotion is a very difficult task in every Industry /

Business. It is particularly difficult in those businesses where the competition is
intense, market is crowded with variety of similar looking products and especially,
when the end user cannot make choices of his/her own, but has to use the product on
some expert’s recommendations. Pharmaceutical is such one of the most intense
knowledge driven industry, which is continuously in a state of dynamic transition.
Pharmacy can be defined as “Complex matrix of process, operations and organization,
involved in the discovery development and manufacture of drug and medication.” 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. Indian pharmaceutical industry is climbing up the value chain from
bringing a pure reverse engineering industry focus on domestic market. 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, it is imperative that this brand promotion efforts to be

96
aimed at primarily towards the physician or doctor and secondarily to the drug retailer
as he plays an important role in dispensing the prescribed brand. While launching the
new formulation, there can be dilemma in the mind of the filed manager on diverting
existing field force for the promotion of the field force, perhaps at the cost of old and
established products. However, it is most necessary to do so as it can only help
product differentiation, brand promotion and stabilization of the new product in the
market. Nevertheless, one question remains and that is whether, the research findings
are universally true or they are geography specific. One can get the answer only when
such studies are conducted at multiple places simultaneously. The results of such
studies can be generalized to arrive at possible answer. Companies realize it is often
not enough to spend like your competitor. In fact, you have to outspend the
competition, especially in areas such as market research and patient education, to
make significant impact on your position in the market

97
CHAPTER – 8
CONCLUSION

98
 CONCLUSIONS

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.

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 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 judgements 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.

Improved regulation of drug promotion will generate a number of benefits for various
stakeholders. Consumers will have a better chance of getting the most appropriate
drug for their condition. Regulations that lead to improved drug use can lower direct
costs (e.g. subsidy costs and import costs) which should be welcomed by governments
and tax payers. Finally, socially responsible drug companies will also benefit if

99
regulation helps to create a level playing field and prevent unscrupulous companies
from manipulating the market through irresponsible marketing.

The pharmaceutical industry

Key recommendations at the company level:

Stop the practice of gifts to doctors

Implement rigorous policies on vetting of drug promotion materials and adherence

to existing codes of conduct

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.

At an industry-wide level:
Ensure codes of conduct on drug promotion extend to interactions with health
professionals AND consumers.

Invest in innovative partnerships with government and civil society organisations so

that corporate funding of disease awareness campaigns, and CME may be channelled
via blind trusts in line with specific health priorities of consumers at a community or
national level.

According to IFPMA, “promotional activities must be consistent with high ethical

standards and information should be designed to help health care providers improve
services to patients. Information must be provided with objectivity, truthfulness and in
good taste and must conform to all relevant laws and regulations. Claims for
therapeutic indications and conditions of use must be based on valid scientific
evidence and include clear statements with respect to side effects, contraindications,
and precautions.“ It also stresses that “high standards of ethical behaviour shall apply
equally to marketing of pharmaceutical products in all countries, regardless of the
level of development of their economic and health care systems.”

Fundamental and systemic changes are required to ensure that the promotion activities
of companies respect consumer rights to safe and reliable products and to
independently verifiable information about the safety and efficacy of those products.

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 CHAPTER – 9
SUMMARY OF THE
PROJECT REPORT

101
 SUMMARY OF THE PROJECT REPORT
The import of finished pharmaceuticals is almost negligible, and confined to very
specific types like anti-cancer drugs. In 1994, the import of drugs, pharmaceuticals
and intermediates was estimated at $450 million, and included the following:
antibiotics, penicillin and its salts, erythromycin and its preparations, vitamins and
provitamins, vaccines (polio, human and veterinary), preparations containing insulin,
caustic and other hormones, and tetracycline and its preparations.

For value purposes, drugs in India are generally classified into two categories -- bulk
drugs and formulations. Due to India's low overhead costs, bulk drugs comprise the
largest sector in the country's pharmaceutical market. India’s bulk drug sector also
makes up about 6% of the international bulk drug market. Drug intermediates are used
as raw materials for the production of bulk drugs, which are either sold directly or
retained by companies for the production of formulations. Formulations can be
subdivided into generic drugs and branded or "ethical" drugs, the latter of which are
made under process patent and sold under a separate brand name. Expected short-term
growth for the two types of drugs has been 20% for bulk drugs and 15% for
formulations. Pharmaceutical Industry is one of the most intense knowledge driven
industry, which is continuously in a state of dynamic transition. Indian pharmaceutical
industry is climbing up the value chain from bringing a pure reverse engineering
industry focus on domestic market. The industry is moving towards basic research
driven expert oriented global presence and providing wide range of value added
quality product and services. The pharmacy formulation market varies radically from
the consumer market in many ways. The rules governing the pharmacy market are
different except a few over-the-counter (OTC) drugs. Pharma companies are not
allowed to publicly market their products. Marketing has to be restricted to
promotional campaigns, advertisement only in medicinal magazines, journals etc.,
through medical representatives. It is not a mean of mass communication, which is
usually applicable to consumer products. In the process of pharmaceutical marketing,
market segmentation, targeting and brand differentiation is considered to be
challenging compared to the consumer marketing. Fundamental and systemic changes
are required to ensure that the promotion activities of companies respect consumer
rights to safe and reliable products and to independently verifiable information about
the safety and efficacy of those products.

102
CHAPTER – 10
ANNEXURES

103
 ANNEXURE-1
QUESTIONNAIRE
1. For how many years you are practicing as a medical practicener (Doctor)?
 Less than one year ----------------------------------
 From one to five years -----------------------------
 Five to Ten years -----------------------------------
 More than Ten years -------------------------------
 Can not remember ---------------------------------

2. Do you agree that India’s pharmaceutical industry is one of the fastest

growing segments of the Indian economy?
 Agree --------------------------------------
 Strongly Agree ---------------------------
 Disagree ----------------------------------
 Strongly Disagree -----------------------
 Do not know/ Can not say -------------

3. Do you agree that the marketing strategy of the pharmaceutical industry

should be different from the marketing strategy in other industrial segments?
 Agree ------------------------------------
 Strongly Agree -------------------------
 Disagree --------------------------------
 Strongly Disagree --------------------
 Do not know/ Can not say ----------

4. Do you agree that institutional selling is quite prevalent when it comes to

pharmaceutical market in India?
 Agree ------------------------------------
 Strongly Agree -------------------------

104
  Disagree --------------------------------
 Strongly Disagree ---------------------
 Do not know/ Can not say ------------

5. Do you agree that the pharmaceutical companies resort to promotional

measures for selling their products?
 Agree --------------------------------------
 Strongly Agree ---------------------------
 Disagree ----------------------------------
 Strongly Disagree -----------------------
 Do not know/ Can not say -------------

6. Does the Pharmaceutical companies offer gifts to the doctors to influence

their prescriptions in favour of their company medicines?
 Yes --------------------------------------------
 No ---------------------------------------------
 Do not know/ Can not say -----------------

7. Out of the following which one is more correct when it comes promotional
strategy of pharmaceutical companies?
 They aim to inform about the product ---------------
 They aim to persuade to purchase --------------------
 Other motives -------------------------------------------
 Do not know/ Can not say -----------------------------

8. Do you agree that unethical standards exist in the promotion of

pharmaceutical products in India?
 Agree ------------------------------------
 Strongly Agree -------------------------

105
  Disagree --------------------------------
 Strongly Disagree ---------------------
 Do not know/ Can not say ------------
9. Your recommendation to the industry and government regarding the
promotional strategy of the pharmaceutical companies? You can choose
more than one option.
 Implement, improve and monitor legislation -----------------
 Measures to improve the transparency of drug companies’ marketing activities
------------------------------------------------
 Stop the practice of gifts to doctors -----------------------------
 Ensure codes of conduct on drug promotion -------------------
 Other measures -----------------------------------------------------
 Do not know/ Can not say ----------------------------------------
10. Do you think that the entry of Multinationals is a major challenge to the
domestic players in the pharmaceutical market and are they ready to face the
challenges of the foreign players?
 Yes -------------------------------------------------
 No --------------------------------------------------
 Do not know/ Can not say-----------------------

11. What type of marketing strategy would you prefer to expand your market
size?
 B2B---------------------------------------------------------------
 B2C ---------------------------------------------------------------
 Both ---------------------------------------------------------------
12. What type of marketing strategy do you as more profitable?
 B2B----------------------------------------------------------------
 B2C ---------------------------------------------------------------
 Both ---------------------------------------------------------------

13. What do you think is the major challenge from the marketing point of view
for the pharmaceutical industry in India?

106
  Fragmentation of the market -----------------------------
 Market risk due to lack of price control mechanism--
 MNCs -------------------------------------------------------
 Others -------------------------------------------------------
14. What innovative distribution channel do you suggest to better market your
products?
 Better consumer supply chain---------------------------------
 Emotional Branding --------------------------------------------
 Alliance with other corporate leaders for promotion of the product- 12 per cent
 Greater media participation and power branding-----------
 Others ------------------------------------------------------------

15. Are you aware that the pharmaceutical companies in India are shifting their
focus from Conventional method of marketing to non-conventional method of
marketing?
 Yes -----------------------------------------------
 No ------------------------------------------------

 Do not know/ Can not say---------------------

16. Do you think that market ethics/ medical ehics is a major factor in the new
distribution channel of marketing?
 Yes -----------------------------------------------------
 No -----------------------------------------------------
 Do not know/ Can not say --------------------------
17. Do you think that these non-conventional marketing methods are effective
methods of pharma marketing in the present age?
 Yes ----------------------------------------------
 No -----------------------------------------------
 Do not know/ Can not say--------------------

18. Do you believe that technology utilization and innovative distribution

channels will help in marketing of pharma products in India?

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  Yes-------------------------------------
 No--------------------------------------
 Do not know/ Can not say----------

19. Major Weakness of the pharmaceutical industry’s marketing strategy.

 Branding ------------------------------
 Publicity ------------------------------
 R&D ----------------------------------
 Do not know / Can not say --------

20. Do you follow branding of products as a Marketing strategy?

 Yes -----------------------------------
 No ------------------------------------
 Do not know/ Can not say --------

21. Do you have a dealer network? Do you sell directly or through dealers?
22. Do you think that Foreign Direct Investment (FDI ) should be allowed in the
pharmaceutical sector in India?

 Yes-----------------------------------------------
 No------------------------------------------------
 Do not know/ Cannot say---------------------

************Thank you ***********

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 ANNEXURE - II
PROJECT PROPOSAL
Student Details:
Name of the Learner : HIMANSHU MOHNIA
Registration No. : 200620703
Program Name : PGDBA Specialization (Marketing Management)

TITLE OF PROJECT:

"Sales Management Strategies in the Pharmaceutical Industry"

PROBLEMS DEFINITION

Pharmaceutical sales is a challenging business. The sales force is scattered around the
country and the globe. The representatives are on the road up to 80% of the time,
meeting with doctors, pharmacists, scientists and hospitals administrators. Physicians
are demanding more from pharmaceutical companies and their sales force. Doctors
want to see sales representatives only as frequently as in necessary to obtain objective,
medical information for treating their patients. So to protect market share,
pharmaceutical companies have to rely on sales force and innovative promotional
strategies.

REASEARCH OBJECTIVES

The objectives of this research is to understand how pharmaceutical company launch

their product in the market and what promotional strategies they use to sell their
products; what is the role played by sales representatives of the company in increasing
revenues and protecting market share. It is a very challenging job because their target
is not the general public but doctors, physicians and hospitals. Through this research
we will also learn what the functions of sales representatives are and what skills they
require to perform their job efficiently.

SCOPE

The scope of this Project is to understand and describe the various stages that are
associated with drugs in pharmacy i.e. discovery, development, action, safety,

109
formulation, use, quality control, packaging, storage, marketing etc. Pharmacy is one
of the foremost amongst future economy drivers. It is committed to deliver high
quality drugs and formulation at an affordable price for the general public, so that
majority of people can afford it.

Methodology

A Research Methodology defines the purpose of the research, how it proceeds, how to
measure progress and what constitute success with respect to the objectives
determined for carrying out the research study. The appropriate research design
formulated is detailed below.

Exploratory research: this kind of research has the primary objective of development
of insights into the problem. It studies the main area where the problem lies and also
tries to evaluate some appropriate courses of action. The research methodology for the
present study has been adopted to reflect these realties and help reach the logical
conclusion in an objective and scientific manner. The present study contemplated an
exploratory research

Research Design

The research design is the basic framework, which provides guidelines for the rest of
the research process. The present research can be said to be exploratory. The research
design determines the direction of the study throughout and the procedures to be
followed. It determines the data collection method, sampling method, the fieldwork
and so on.

Nature of Data

Primary Data: Primary data is basically fresh data collected directly from the
target respondents; it could be collected through Questionnaire
Surveys, Interviews, Focus Group Discussions Etc.

Secondary Data: Secondary data that is already available and published. It could
be internal and external source of data. Internal source: which
originates from the specific field or area where research is
carried out e.g. publish broachers, official reports etc.

110
External Source: This originates outside the field of study like books, periodicals,
journals, newspapers and the Internet.

Data Collection

Primary data: Primary data was selected from the sample by a self-
administrated questionnaire in presence of the interviewer.

SAMPLE SIZE:
Sample size : 100
Sample area : New Delhi
Sample Unit : Officials of many pharmaceutical companies, medical
Practioneers, medical representatives in New Delhi
SECONDARY DATA: Secondary data was collected through
Articles,
Reports,
Journals,
Magazines,
Newspapers and
Internet
Sampling Technique

Random sampling technique is generally employed to extract the fruitful results. This
includes the overall design, the sampling procedure, the data collection methods, the
field methods and the analysis procedures

Sampling Procedure Actually Employed:

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.

111
Statistical Techniques to be tool used:

Simple statistical tools have been used in the present study to analyze and interpret the
data collected from the field. The study has used percentiles method and the data are
presented in the form of tables and diagrams.

LIMITATION OF THE STUDY

The pharmaceutical industry is one of the major, most successful also rapidly growing
industries worldwide. It contributes significantly to the economies of many countries
all around the world, both as a major employer and as an export earner.

Marketing and sales of pharmaceutical products is very different from other products
such as say groceries, cosmetics, food items, vehicles, etc. One, pharmaceutical
products (apart from over the counter OTC drugs) can only be obtained from a
chemist on a doctor’s prescription. Thus here the customer is the doctor, who is well
versed in pharmacology. Two, medicines and drugs can only be prescribed by a
doctor only when it is deemed necessary for the patient’s recovery from illness; that
is, it is ethically wrong for a doctor to needlessly prescribe medicines. Under these
medical and ethical constraints, how does the pharmaceutical company promote its
products? This is the purpose and objective of the study.

Chapterization
1. Introduction

2. Objectives and Scope

3. Limitations

4. Theoretical Perspective

5. Methodology and Procedure of work

6. Analysis of Data

7. Findings, Inferences and Recommendations

8. Conclusion

9. Summary of the Project Report

112
Annexure
I) Proposal
II) References
III) List of Figures, Charts, Diagrams
IV) List of Tables

Detailed information of Guide:

Name : MR. SUNIT MADAN
Qualification : MBA(HR), PGDBA(IR), LLB
Designation : (Business Development Manager)
Special Field or Work :
Experience : 10 Years
Any Other Important Information : Not Applicable

Company Name : Zydus Neurosciences,

Cadila Healthcare Ltd.

Address of Corporate Office :

113
 ANNEXURE - III
BIBLIOGRAPHY
Books
Chaudhary, P. (1998), Rx Factor: Strategic Creativity in Pharmaceutical Marketing,
New Delhi, India: Response Books.
Mittal, D.K. (1994), Drug and Pharmaceutical Industry, New Delhi, India: Anmole
Publication Pvt. Ltd.
Ramaswamy, V.S. & Meerakumari, N.S. (1996), Marketing Management: An Indian
Prospective, New Delhi, India: Macmillian India Ltd.
Sakaria George (1997), "Reform: The Inside Story," Business Today (March 7-21),
72- 76.
Smarta, R.B. (1998), "Getting friendly," Advertising and Marketing (February 1-15),
51- 54.
Smarta, R.B. (1998) "Distribution as a strategic weapon" Advertising and Marketing
(May 16-31), 30-32.
Smarta, R.B. (1998) "The bigger objectives", Advertising and Marketing (March 1-
15), 24-26.
Smarta, R.B. (1998) "Sensible Pricing", Advertising and Marketing (January 1-15),
74- 76.
_____(1988), "The Eastern Pharmacist: An Independent Organ of Pharmaceutical
Industry", Trade & Profession (April), XXXI (364), 37-56.
_____(1998), "The Next Level: Survey of Pharmaceutical Marketing", Advertising
and Marketing (August 31), 72-78.
_____(1998), "Wielding the Scalpel", The Strategist Quarterly (April-June), 16-19.

Internet website Links

www.governmentstatisticaldata.com
www.historyofpharmaceuticalindustry.com
www.otcpharmaceuticalproducts.com
www.cipla.com
www.bookrags.com/sciences/genetics/antibiotics-wrog.html
www.bookrags.com/others/health/cephalosporines-woh.html
www.indianfoline.com/phar/feat/thmo.html

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 ANNEXURE - IV
LIST OF FIGURES, CHARTS, DIAGRAMS
Figure No. Particular Page No
Fig. 4.1: Market Share of Corporate 17
Fig. 4.2: Market Share of MNCs & Local Companies 17
Fig. 4.3: Drug requiring prescription 22
Fig. 4.4: Pharma’s Current Model 43
Fig. 4.5: Reduction in U.S. Primary care promotional spending 43
Fig. 4.6: Media consumption habits have changed 44
Fig. 4.7: Consumers are spending 45
Fig. 4.8: Physician Marketing Channels 46
Fig. 4.9: Hypothesis warrants additional research 49
Fig 6.1: Practicing as a medical practicener 64
Fig 6.2: The fastest growing segments of the Indian economy 65
Fig 6.3: Pharmaceutical segments 66
Fig 6.4: Pharmaceutical market in India 67
Fig 6.5: Innovative and better promotional measures for selling 68
Fig 6.6: Prescriptions in favour of their company medicines 69
Fig 6.7: Promotional strategy of pharmaceutical companies 70
Fig 6.8: Promotion of pharmaceutical products in India 71
Fig 6.9: The industry and government regarding 72
Fig 6.10: The Challenges of the Foreign Players 73
Fig 6.11: Market size 74
Fig 6.12: More Profitable 75
Fig 6.13: Major challenge from the Marketing 76
Fig 6.14: Suggest to better market your products 77
Fig 6.15: The pharmaceutical companies in India are shifting their focus from
conventional method of marketing 78
Fig 6.16: Distribution channel of marketing 79
Fig 6.17: Pharma Marketing in the Present Age 80
Fig 6.18: Distribution channels will help in marketing of Pharma products 81
Fig 6.19: Major weakness of the pharmaceutical industry’s 82
Fig 6.20: Products as a marketing strategy 83
Fig 6.20: Pharmaceutical sector in India 85

115
 ANNEXURE -V
LIST OF TABLES

Table No. Particular Page No

Table: 4.1: India’s Pharmaceutical Industry 12
Table: 4.2: India’s top 10 pharmaceutical company sales ($million) 14
Table 4.3: Doctor-directed promotion methods 27
Table 4.4: Major alliances between Indian & International companies: 38
Table 4.5: Strengths & weaknesses of India’s pharmaceutical industry 59

116