Plesico Pharma

29th September, 2019. Saurabh Pandey came out of the conference room in Plesico
pharmaceutical’s Kolkata office in a pensive mood. His discussion with Dr. Ramesh Pradhan, the
owner of the firm failed to give him any direction of what to be done to meet the ambitious
expectation of Ramesh to formulate a go to market strategy and penetrate the highly competitive
pharma market of West Bengal with a ‘me-too’ range of pharma and OTC products of a Pharma
start-up like Plesico.

Saurabh Pandey is an IIMA alumnus with a lot of confidence in his ability of dealing with issues
of business development and Channel design and its implementation. Prior joining IIM, he
worked with a multinational pharma major as the area business manager for two years. His
background in pharmacy enabled him to grasp the product knowledge imperative to succeed as
pharmaceutical sales personnel.

In his second year of graduation Saurabh decided to go back to pharma industry, but with high
end functional role. He chose to join some pharma start-up in a senior position instead of joining
an established pharma major as the mid-level manager. Incidentally, he met Ramesh at a party.
Ramesh, a first generation entrepreneur, started a new company Plesico pharma Pvt Ltd. Ramesh
gave offered him to join Plesico as the sales director and promised him the freedom to design the
sales and distribution strategy to meet ambitious growth targets of Plesico.

Plesico Pharma contract manufactures and markets a limited range of pharmaceutical medicines
including both prescription and Over-the-counter (OTC) drugs (Table 1). Dr. Ramesh Pradhan is
the CEO of the company; Ajit Mukherjee is the marketing director and Saurabh joined as the
Sales Director. The company is a start-up and yet to develop a cohesive organizational structure.
Plesico, being a start-up has the obvious resource limitations. Plesico’s product portfolio is small
and includes prescription drugs, like antibiotic (amoxicillin, cephalexin), cough syrup
(chlorphenamine maleate), anti-allergic tab/syrup (Cetirizine), and a B-complex tab. The
products have a lot of competition from multinational pharma majors like GSK, Ranbaxy, etc.
and the challenge is to catch the medical practitioner’s attention to get established in the market.
In the OTC range, the company markets Paracetamol (1gm) for pain relief and Pseudoephedrine,
a decongestant.
A prescription drug (also prescription medication or prescription medicine) is a licensed
medicine that is regulated by legislation to require a medical prescription before it can be
obtained from pharma retail. The term is used to distinguish it from over-the-counter drugs
(OTC) that can be obtained without a prescription. Pharma companies promote their prescription
products to medical practitioners with Medical Representatives (MRs). The MRs visit the
doctors and promote the prescription medicines. The doctors advise their patients to buy
medicines to recover from ailments. In India, the job of the medical representative is not
confined to promote the company’s products, but also to manage the territory sales by handling a
network of distributors and retailers. Medical Representatives (generally) report to the 1st line
managers (Area Sales Managers). The organizational structure of a pharma company in India is
generally hierarchical with MRs at the bottom end of the hierarchy.

Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a prescription
from a healthcare professional. The consumers are driven by Direct to Consumer (DTC)
communication strategy to buy the products from the retail outlets. Print ads., Content marketing,
Influencer Marketing and Point of Purchase display strategies are often used to engage
consumers, bolster consumer trust and to facilitate the selling of the products.

Table 1: Products of Plesico and major competitions

Plesico has to cater to a market which is characterized by diverse customers with different needs
and expectation. West Bengal market is characterized by geographical segments viz. Urban, semi
urban and rural markets. For Pharma (prescription) products the target audience includes medical
practitioners who are involved to provide prescription advice to patients to alleviate their illness.
The patients take the prescription to the pharma retail outlets and the retailers sell the prescribed
medicine. In the semi urban and rural markets there are a number of Registered Medical
Practitioners (RMPs) who have a huge clientele. Some of them cater to around 200-300 patients
per day. These RMPs keep stock of medicines with them and also sell medicine to their patients
from their stock. The lack of availability of qualified MBBS doctors in the rural Bengal helped in
the growing business of these RMPs. On them the rural people depend a lot for medical
consultation and cure of ailments. Various factors motivate a Doctor to prescribe the medicine as
given in fig 1. bellow.

Fig 1: A list of factors for doctors’ prescription behavior

In the semi urban and rural areas there are Primary Health Centers (PHC) in every block. These
PHCs (which are established by Govt.) caters to the medical need of the rural patients. The
patients are provided medicine from the PHC outlets free of cost. These PHCs purchase
medicine either centrally or locally or both. Central purchase means Govt asks for tenders for
Bulk purchase of generic medicines and the company providing lowest tender gets selected to
supply medicines. These medicines are distributed among various PHCs as per requirements. In
case of local purchase the head of the PHC, whenever required, is authorized to order medicines
from local suppliers to cater to the need of the patients.

Channel design for such a new company operating in a highly competitive pharma space is
undoubtedly a challenge especially in the context of resource constraint of a pharma startup.
Saurabh was contemplating the pros and cons of various channel design related decisions. He has
to act ASAP before presenting his plan to Dr. Ramesh and Ajit on 15th October, during their next
meeting.

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Dr. Nirmalya Bandyopadhyay prepared this case, as the basis for class discussion rather
than to illustrate either effective or ineffective handling of an administrative situation. The
case, though based on real events is fictionalized, and any resemblances to actual persons
and entities are coincidental. There are occasional references of the actual companies in the
narration.