About Cipla

Established in 1935, Cipla is a global pharmaceutical company with a commitment to make

medicines accessible and available to those in need. Our product portfolio spans generic drugs
(incl. complex generics) in respiratory, anti-retroviral (for HIV), urology, cardiology, anti-infective,
central nervous system, and other therapeutic segments. With a rich portfolio, we are deepening
our presence in the home markets of India, South Africa, United States, and other key emerging
markets.
Our 47 manufacturing sites around the world produce 50+ dosage forms and 1,500+ products
using cutting-edge technology platforms to cater to our 86 markets.

The current problem that we set out to solve pertains to Cipla’s business in India

In FY21, Cipla’s India Business reached revenue of about INR 9000 Cr making it India’s third largest
pharma company by sales. Our business is categorised into 3 business units/segments,

Branded Generics (Rx) Trade Generics (Gx) OTC

Definition Branded generics are
generic drugs that have
been given a proprietary
market name
- -
Margin Distributor(s) – 10%
Structures Retailer – 20%
- -
These are generic drugs These are the
that are not marketed or products that can be
promoted via traditional purchased at
route pharmacies, without
doctor prescription.
Some of these can be
sold by groceries as
well
- -
Higher than branded Largely in line with
generics Branded Generics
- -
The traditional flow of goods is as below,

Stockist/Semi-
Manufacturer Depot Distributor Retailer
stockists

In India, pharmaceutical companies need to give a minimum of 10 per cent trade margin for
wholesalers on price to retailer (PTR) and 20 per cent for retailers on maximum retail price (MRP)
of drugs. This is very strictly governed by the All India Organisation of Chemists and Druggists
(AIOCD), a representative body of 9.4 lakh chemists across the country. This is a challenge for
pharma companies who are trying to conserve margins and invest in building network in
untapped markets.

With increasing disposable incomes and health awareness, rural markets offer untapped
potential for generic pharmaceuticals. Despite being a hub of major generic pharmaceuticals,
India presents a multitude of demographic, structural and policy challenges that limit rural
penetration of even the most cost-effective of pharmaceutical products. Many pharma
companies have publicly stated that Tier 2+ markets are key to their growth strategy in India. Tier
2+ cities are defined as places with less than 10 lakhs population.

In trade generics, Cipla operates the largest trade generics franchise in India. This scale has been
achieved due to the Cipla’s brand that echoes trust, quality of medicines and long-standing
relationship with the stockists. Alongside this, one other factor that plays a crucial role is the
higher margins along the value chain that trade generics offer. This makes this segment of
products lucrative enough to be distributed in the hinterland.

Cipla wishes to replicate the same reach for its branded Rx products as well, without changing
the margin structure of Rx products

Cipla, being one of the leading pharma companies in India, would like to explore unconventional
methods, for augmenting its current distribution network, that can increase reach of its
medicines to patients, pharmacies, doctors in Tier 2+ markets.

-
Deliverables

Discuss a few models in which Cipla could penetrate beyond Tier 2+ (including rural markets).
Identify the critical parameters for evaluating those models and propose the most effective
model
Propose implementation plan for the chosen/suggested model. The model could be built by
Cipla in-house or can be achieved by partnerships, investments, acquisitions.

Few other points to opine upon -

1. How is the landscape of the new-age tech companies in this space? Is there any learning
or opportunity to leverage for Cipla?
2. Should Cipla enter the pharmacy business? If yes, then what is the right way to go ahead.
3. How does this participation of Cipla in the value chain affect the stakeholders handling
the traditional distribution network – distributors, stockists, semi-stockists?

Food for thought:

1. How did FMCG industry crack their tier 2+ distribution? What are the barriers for pharma?
Anything that pharma can leverage?

Guidelines
1. For the first round, your deliverable should be 2-3 slides (excluding cover slides).
Candidates shortlisted for the Top 5 presentations would be asked to make a detailed
presentation of not more than <5-7 slides>, of 15 minutes duration
2. Call out key assumptions, wherever applicable
3. Mention sources for the data used
Evaluation Criteria
Please note that submissions would be evaluated in terms of below Cipla Competencies.

Organisation Competency Definition Purpose Behaviours

Demonstrates hunger and passion for winning

This is about positioning the organization for success by establishing Strategically influences internal and external stakeholders to deliver organizational success
Striving for excellence, challenging goals, aligning systems and processes to deliver on the Cipla
Achievement Orientation with a passion to win and values, and implementing more efficient work practices. It involves managing Consistently delivers against stretch aspirations with a sense of urgency
a desire to raise the bar and allocating financial and people resources to execute operational and
business plans. Demonstrates resilience and agility in judgment and actions

Displays high customer-centricity to maximize value for all stakeholders

Has sound judgment and always connects the dots to create strategic breakthroughs for Cipla

This is about the ability to understand interconnections and interdependence Is high on strategic planning and practices high process adherence to ensure consistent outcomes
between stakeholders, relationships, domains (social, economic,
Moving forward together Has a high external orientation, consistently benchmarking systems and processes with the best-
Systems Thinking environmental), across time (past, present to future) and scales (local to
as OneCipla team in-class to deliver OneCipla standards
global) to reframe and address challenges and opportunities for business and
societal progress. Drives processes to ensure effective, optimized and seamless OneCipla outcomes

Drives adoption of emerging technology and digital practices to build high response agility

Anticipates, leads and enables change

This is about going beyond the conventional ways with a willingness to take Drives growth and efficiency through new ideas and novel solutions
Constantly thinking about risks and try out different solutions. It involves questioning the status quo as
Innovation & Change how things can be done well as generating and implementing creative solutions and novel ways to Challenges the status quo and demonstrates learning agility
differently and better achieve the Cipla values while dealing with ambiguity and driving change
effectively. Is entrepreneurial and comfortable taking risk mitigated decisions

Can deal with ambiguity and encourages new thoughts and experimentation

All the best !