Comparative study of

various brands in
Atorvastatin therapy

UTTAM KUMAR PATRA (PG09-112)

INMANTEC BUSINESS SCHOOL
GHAZIABAD
 Final dissertation project submitted

in

Partial Fulfilment of the Requirements for the Award of

Post Graduate Diploma in Management, INMANTEC Business School, Ghaziabad, India.
(Recognized by AICTE, Ministry of HRD, Govt. of India)

Comparative study of various brands in

Atorvastatin therapy

By

UTTAM KUMAR PATRA

PGO9-112

Under The Guidance Of

PROF. KAMAL GUPTA.

Assistant Professor

INMANTEC, Ghaziabad

INMANTEC BUSINESS SCHOOL

GHAZIABAD

Date: 14-04-11
 Appendix I

DECLARATION

I, Mr. Uttam Kumar Patra (PG09-112) hereby declare that this project
report is the record of authentic work carried out by me and has not
been submitted to any other University or Institute for the award of
any degree / diploma etc.

Uttam Kumar Patra

PG09-112

Date: 14-apr-2011
Appendix II
 Appendix III

ACKNOWLEDGEMENT
This project is entirely nourished by the careful supervision of Mr.
Sailendra Sharma, ASM- Zenura 3, New Delhi, Dr. Reddy’s Laboratories.
Without his guidance this report would not be promoted as a successful one.
Whenever I needed any kind of help or advice, he stretched his helpful being to
answer my queries and guided me in the best possible way to complete this
project work.

Prof. Kamal Gupta, assistant professor, INMANTEC, has also performed

a great role of assistance with all his vast knowledge and experience to give a
clear structure to this project. He has monitored every week progress of the
project while also enlightening the uncovered areas of my knowledge.

Last but not the least I would like to acknowledge the chemists who are
the primary sources of collected information and data. Without their help &
generous contribution in giving me the right information I would not have been
able to do this project work perfectly. I like to thank them for their kind
cooperation in this regard.

Uttam Kumar Patra

 Appendix IV

Content
CHAPTER Title PAGE NO
NO.
CHAPTER 1 Introduction 1
Objective 3
Review and Literature 4
The Indian Pharmaceutical Industry 6
Industry structure 8
Types of drug system in India 9
Industry segmentation 9
Pharmaceutical regulatory bodies in India 20
Indian Pharma: Qualitative analysis 21
Porter five force model 21
SWOT Analysis 23
Pharma Marketing And Its Challenges 25
Sales Promotion Activity Through Medical 29
Representatives
Distribution 30
Molecules Used in survey 31
CHATER 2 Research Methodology
Research Design 33
Sampling Design 33
Data Collection 33
Data Analysis technique 34
Research Limitations 34
CHAPTER 3 Analysis 35-39
Findings 40
Conclusion 41
Recommendations 42
ANNEXURE 43-44
BIBLIOGRAPHY 45
 Appendix V

List of Graphs and chart:

Sl No. Description Page
No
G1: Type of business 35

G2: pharma company in cardiovascular segment 36

G3: chemist perception towards drug company 36

G4: type of which statin mostly sold in the market 37

G5: Atorvastatin brand mostly sold in the market 37

G6: types of Atorvastatin composition 38

G7: types of Atorvastatin combination 39

G8: Sales of Atorvastatin per shop 39

 Appendix VI

Executive Summary
Now a day in this competitive world there are many companies are
existed. Every company wants to attract more and more customers to them there
are many policies which are being implementing by these companies. There are
various products of big companies which failed due to lack of aggressive
marketing and proper promotion of that product.

The following report details the comparative study of various brands in

Atorvastatin therapy. Atorvastatin is the no 1 drug throughout the world. The
report also deals with market potential for Atorvastatin as well as various brands
of atorvastatin. This write-up is arranged in such a manner as to follow the
collected data from chemists through personal interviews, surveys and a
detailed questionnaire was designed for that purpose. The interviews have been
conducted from the respondents at different locations in north Delhi. The
sample includes 100 respondents. The data gathered has been analyzed on a
question-by-question basis. The details of the research findings are mentioned
after the analysis, and recommendations are given to the management based on
the research findings.
INTRODUCTION
Drug Company Cipla maintained its top position in the domestic market for the 12 months
ended December, 2009, with a market share of 5.38 per cent — up 18 per cent over the year
and ahead of Ranbaxy Laboratories and GlaxoSmithKline (GSK). Cipla regained its
numerous positions in the Rs 33,000-crore domestic retail market with 5.32 per cent market
share, marginally ahead of Ranbaxy, which had 5.08 per cent share. ORG-IMS tracks sales
of pharmaceutical drugs in India on a monthly-basis through over 3,000 stockiest and 6,000
doctors.

Currently, Cipla sells 1,085 brands for various diseases in India, way ahead of 729 drugs
sold by Ranbaxy, according to informed trade sources. Cipla overtook Ranbaxy and
GlaxoSmithKline India (GSK) to become the largest pharmaceutical company in the
domestic market for the first time in May 2007. Thereafter, it was a close battle between
Ranbaxy and Cipla.

The total domestic drug market is valued at Rs 40,051.74 crore, an increase of 17 per cent
over the previous year, according to data from drug sales tracking agency, ORG-IMS. The
agency tracks drug sales among more than 500,000 traders in the country, through stockist
data. Cipla’s domestic market share grew 18 per cent during the year, thanks to its product
basket of 924 products, which is way ahead of Ranbaxy’s 565 and GSK’s 177 products.
Ranbaxy got a market share of 4.91 per cent and GSK had a market share of 4.35 per cent,
with a growth of 13.7 per cent and 18 per cent, respectively, in 2009. During the period,
Cipla had sales of Rs 2,155.29 crore in the domestic market, ahead of Ranbaxy’s Rs
1,968.24 crore and GSK’s Rs 1,743.15 crore. Cipla had overtaken Ranbaxy and GSK India
to become the largest pharmaceutical company in the domestic market for the first time in
May, 2007, according to sources. Piramal Healthcare, Zydus Cadila, Sun Pharma, Alkem
Laboratories, Mankind, Lupin and Aristo Pharma occupied the 4th-10th positions in ORG-
IMS rankings, respectively.

GROWTH TONIC.
COMPANY NO.OF DOMESTICS MARKET GROWTH(%)
PRODUCTS TURNOVER SHARE (%)
(RS OF)
CIPLA 924 2155.29 5.38 18
RANBAXY 565 1968.24 4.91 13.7
GSK 177 1743.15 4.35 18
PIRAMAL 750 1644.26 4.11 22.8
HEALTH CARE
ZYDUS CADILA 735 1484.84 3.71 21.2
SUN HARMA 516 1449.83 3.62 22.9
(Source ORG-IMS data “Change in market share over 2009”).

Leading Brand:
Ranbaxy Cipla
MOX 109.3 ASTHALIN 94.7
REVITAL 88.0 SEROFLO 82.9
SPORIDEX 82.1 NOVAMOX 73.3
CIFRAN 76.9 MT PILL 60.2
STORVAS 72.8 AEROCORT 58.3
TOTAL 429 TOTAL 369.4
(Rupees in Crore, for 12 ended November 2008)

1
Atorvastatin, sold by Pfizer under the trade name Lipitor, is a member of the drug class
known as statins, used for lowering blood cholesterol. It also stabilizes plaque and prevents
strokes through anti-inflammatory and other mechanisms. Like all statins, an enzyme found
in liver tissue that plays a key role in production of cholesterol in the body.

Atorvastatin was first synthesized in 1985 by Bruce Roth while working at Parke-Davis
Warner-Lambert Company (now Pfizer). With 2008 sales of US$12.4 billion, Lipitor was the
top-selling branded pharmaceutical in the world.

World's top-selling drugs Consensus forecasts for 2010:

• 1. Lipitor (cholesterol) Pfizer $11.7 bln
• 2. Plavix (anticlotting) Sanofi/Bristol (BMY.N) $9.6 bln
• 3. Advair (asthma/COPD) GlaxoSmithKline $9.0 bln
• 4. Remicade (arthritis) Merck/J&J $7.4 bln
• 5. Enbrel (arthritis) Pfizer/Amgen $7.1 bln
• 6. Humira (arthritis) Abbott $6.8 bln
• 7. Avastin (cancer) Roche $6.7 bln
• 8. Rituxan (cancer) Roche $6.1 bln
• 9. Diovan (hypertension) Novartis $6.0 bln
• 10.Crestor (cholesterol) AstraZeneca $5.8 bln

Source: Thomson Reuters. April 13, 2010.

2006
Oncology
4% Diabetic

Cardic 3%
Orthopedic
6% 3%
Gynaecological
5%
Others Neurology
43% 3%
Urology
Gastro 4%
Intestinal
12%
Fever
8%
Accidents
9%
Hospitalisation Cases, 2006 Source: Ernst & Young Analysis, Business Line: 2007

2
OBJECTIVE:
The purpose of research is to discover answers to questions through the application of
scientific procedures. The main aim of research is to find out the truth which is hidden and
which has not been discovered as yet. Though each research study has its own specific
purpose but the research objectives can be listed into a number of broad categories, as
following:-

• To analyze the therapeutic importance of Atorvastatin

• To analyze the prescription behavior of doctor towards Atorvastatin
• To identify the sales potential of Atorvastatin of various brands in the market

3
REVIEW AND LITERATURE:
Globalization is widely seen as a dominating phenomenon of 21st century encompassing
worldwide integration of financial systems, trade liberalization, deregulation and market
opening resulting in a global market and patterns of industrial development. In last few
decades it is evident that firms and institutions from peripheral countries or developing world
are making sustained and deliberate effort to take advantage of the new opportunities. The
rise of East Asia followed by growth in China and India has led to emergence of new breed
of Multinational Enterprises (MNEs) from these countries. By the end of 2004 China
emerged as fifth largest outward direct foreign investor with a total US $ 37 billion and was
the third largest exporter after Germany and the US (Child and Rodrigues, 2005). Similarly
albeit on a smaller scale in the last decade Indian economy saw a dramatic growth in
overseas investment by the Indian industry. The firms from latecomer countries are making
inroads in sectors such as manufacturing (steel and pharmaceuticals) and services (IT) and
trading as well as high technology sectors like semi-conductors. Some of the firms such as
Infosys, Lenovo, Ranbaxy and Espat are now competing at a global level. Multinational
enterprises from developing countries are a clear representation of a sustained increase in
outward Foreign direct investment (FDI) from developing countries which has risen from $60
billion in 1980 to $ 869 billion in 2000 and to a total in excess of $1trillion for the first time in
2004 (UNCTAD, 2004). Outward FDI from developing countries accounts for more than 10
percent of the world’s outward FDI. The rise of outward FDI and new MNEs that embody it,
from economies such as India, China, Korea, Singapore, Malaysia and Taiwan is a key
phenomenon for the world economy in last decade. It shows that firms from developing
countries are rising to compete at the frontiers of the world market and this research also
focusing on the strategies they have adopted to achieve that.
The first wave MNEs from the developing world documented by authors such as Kumar and
Mcleod (1981) and Lall (1983) succeeded as international players despite many difficulties.
Their success was due as much to the difficulties encountered at home as to the incentives
driving internationalization. One of the most salient features of first wave MNE activity is the
direction and motivation of FDI compared to western MNEs. Much empirical work on first
MNEs indicated strong and marked trend investments in neighboring and other countries
which were at a similar or earlier stage of their development. Prominent first wave countries
such as India, Philippines, Argentina and Columbia did not show any significant increase in
either the level of the total outward FDI, nor a significant shift towards developed country
hosts. But the arrival of the second wave MNEs from developing countries represents quite a
different phenomenon.

First wave countries experienced very low or negative economic growth rate whereas
second wave countries grew rapidly over the intervening decade and half. This has been
further enhanced by fundamental changes in the world economy which were a direct result
of globalization. Globalization has created a more broad and competitive market across
countries due to convergence of production and industrial patterns. As a result firms need to
have 4 competitive advantages that are globally viable rather than domestically. Most of
these developing countries also went through a fundamental shift in the policy orientation
from an import substituting role to an export oriented outward economy. Firms in these
countries now faced competition in domestic market with global firms and needed upgrade
their capabilities to survive. These changes had a profound impact in creating a second
wave of MNEs from developing countries. Therefore Mathews (2006) argues that analysis of
second wave requires different perspectives that differ from those created to account for
outward FDI from developed countries, and the first wave of MNEs from developing
countries. Initial analysis of second wave of MNEs reveals that overseas move of firms in the
second wave is a result of the ‘pull factors’ that are drawing firms into global connections
unlike ‘push factors’ that drove firms as stand-alone players in the first wave (Mathews,

4
2006). Dunning et al. (1997) suggest that in the case of second wave of MNEs from East-
Asian countries such as Taiwan and Korea were subsidized by governments with
government policy interacting with firm strategies. The rise of second wave MNEs from
emerging countries is less driven by cost factors per se, but more by a search for markets
and technological innovations to compete successfully in the Global economy (Yueng,
2000). The sudden appearance of the second wave of firms and their capacity to create
competitive positions to existing incumbents has raised interesting questions as they are not
simply occupying space vacated by incumbents instead in many cases they are creating
new economic space by their organizational and strategic innovation. Thus the changes in
the world economy, specifically its globally interlinked character is responsible for driving the
new approaches to and patterns of internationalization in firms from peripheral countries.
Therefore Mathews (2006) suggests that existing theories and framework of
internationalization have failed to capture organization and strategic innovations adopted by
developing country MNEs for new modes of internationalization. In this context the Indian
pharmaceutical industry provides an ideal case to investigate approaches and motives of
second wave MNEs firms from developing countries. From the beginning of the 1990s, the
Indian government started liberalization by removing restrictions on trade such as
regulations on FDI and opened Indian market to overseas firms. As a result of liberalization
policy Indian Economy witnessed dramatic growth, changes in domestic market and firm
activities specifically in relation to overseas expansion strategies. The cumulative number of
overseas project approved during the 1990s is estimated to be 2652, a nearly 11 fold
increase from the number of projects permitted during 1975-90 (230) (Pradhan,2004). The
growth of overseas investment is been characterized by significant changes in location and
sectorial distribution. In the 1990s the majority of investments has originated from the service
sector and was increasingly developed country-oriented with majority ownership in most
cases. The most important destination of Indian outward FDI to date is the USA which
accounted for 19% of total cumulative outflows from 1996-2003.

In 2005 Indian firms acquire 136 firms overseas with a total value of US $4.3 billion. The
Indian pharmaceutical Industry is at the forefront in international expansion compared to
other manufacturing sectors in the Indian Economy.

The Indian pharmaceutical industry is the thirteenth largest in the world in terms of market
output; accounting for a market of about US$ 2.5 billion (Ramani, 2002). It is ranked as the
most advanced pharmaceutical industry amongst developing countries and is one of India’s
best science-based industries. Indian firms have been investing abroad for many years but it
is only since the late-1990s that outward FDI flows have risen considerably. The
liberalization of government policies and relaxation of regulations on FDI abroad have
helped Indian firms to expand internationally. In the last decade some Indian pharmaceutical
firms have successfully internationalized their operations and emerged as a major producers
and suppliers of generic drugs all over the world. In the absence of more systematic
longitudinal firm level data this research is based on case study evidence. The findings
suggest that Indian pharmaceutical firms are accessing advanced markets and acquiring
new technology through the process of internationalization. Indian firms augmenting existing
skills in production capabilities and process R&D by acquiring technology focused firms in
advance markets. The analysis suggests that Indian pharmaceutical firms have adapted to
the realities of globalization and are finding new niche through the process of
internationalization.

5
The Indian pharmaceutical industry:
Indian pharmaceutical industry is undergoing fast paced changes. The Indian Generics
market is witnessing rapid growth opening up immense opportunities for firms. India has one
of the fastest growing pharmaceutical markets in the world. The Indian pharmaceutical
market is the 15th largest individual market by sales, but the 4th by volume of product. This
is further triggered by the fact that generics worth over $40 billion are going off patent in the
coming few years which is close to 15% of the total prescription market of the US. The
Indian pharmaceutical companies have been doing extremely well in developed markets
such as US and Europe, notable among these being Ranbaxy, Dr. Reddy’s Labs,
Wockhardt, Cipla, Nicholas Piramal and Lupin. The companies have their strategies in place
to leverage opportunities and appropriate values existing in formulations, bulk drugs,
generics, Novel Drug Delivery Systems, New Chemical Entities, and Biotechnology etc. The
industry ranks fourth globally in terms of volume and in terms of value, it is ranked thirteenth.
The industry has thrived so far on reverse engineering skills exploiting the lack of process
patent in the country. This has resulted in the Indian pharmaceutical players offering their
products at some of the lowest prices in the world. The quality of the products is reflected in
the fact that India has the highest number of manufacturing plants approved by US FDA,
which is next only to that in the US. Multinational companies have traditionally dominated the
industry, which is another trend seeing a reversal. Currently, it is the Indian companies which
are dominating the marketplace with the local players dominating a number of key
therapeutic segments. The market is also very fragmented with about 30,000 entities and the
organized sector consisting of about 300 entities. Consolidation is increasing in the industry
with many local players building a global outlook and also growing inorganically through
mergers and acquisitions.

India currently represents just US $6 billion of the $550 billion global pharmaceutical
industry; its share is increasing at 10 % a year. The organized sector of India’s
pharmaceutical industry consists of 250 to 300 companies, which accounts for 70 % of the
market, with the top ten companies representing 30%. The Indian pharmaceutical industry
has developed wide ranging capabilities in the complex field of drug process Development
and production technology. It is well ahead of other developing countries in process R&D
capabilities and the range of technologically complex medicines manufactured. The Indian
government adopted a new Patents Act in 1970, which laid the foundations of the modern
Indian Pharmaceutical industry. It removed product patents for pharmaceuticals, food and
agro-chemicals, allowing patents only for production processes. The statutory term for
production processes was shortened to five years from grant or seven years from
application. The 1970 Patent Act greatly weakened intellectual property protection in India,
particularly for pharmaceutical innovations. It started the era of reverse engineering where
firms developed new products by changing their production processes like Dr. Reddy.
Trained manpower, comparative ease of imitation and a strong chemistry base among
Indian research institutes supported manufacturers and gave the Indian pharmaceutical
industry its current profile. The industry’s exports were worth more than US $ 492.30 in
2005-06 and they have been growing at a compound annual rate of 22.7 percent over the
last few years (National pharmaceutical policy, 2006).

The value of the Indian Pharmaceutical industry’s overseas acquisition has grown from just
US $8 million in 1997 to $116 million in 2004. Indian firms have acquired over US $1 billion
worth of pharmaceutical companies overseas in 2005. There are 3 developments which are
pushing expansion of the Indian pharmaceutical industry into overseas markets;

6
 • Opportunities opened in the US generic market due to the Hatch-Waxman Act,
• Increasing outsourcing by MNC pharmaceutical firms and
• C. Strengthening of patent laws in the domestic market.
• D. Implement all these techniques in India for producing good medicines.

These three developments are creating new challenges and opportunities for Indian industry
and internationalization is one of route adopted by Indian to succeed in this new
environment. The generic opportunity is a result of the passing of the Hutch Waxman Act in
the US in 1984. Under this new law, manufacturers of generic drugs no longer had to go
through a lengthy period of extensive clinical trials in order to market a generic drug -
demonstration of bio-equivalence was sufficient to acquire a patent on a generic drug
procedures were established for the resolution of disputes between branded drug
manufacturers and generic manufacturers. Western markets were a lucrative business
opportunity and the low cost advantage enjoyed by Indian firms on account of the cheap
availability of scientific labor combined with scale economies inherent in the manufacture of
bulk chemicals made for big margins. Between 1999 and 2005 drugs worth $ 64 million went
off patent allowing generic companies to take advantage of better business opportunities. In
the generics industry prescription drugs worth $40 billion in the US and $25 billion in Europe
are due to loose patent protection by 2007-08. In 2004 the US senate passed the Greater
Access to Affordable Medicine Act diluting some of the proinnovator provisions of 1984
Hatch-Waxman Act, giving a big boost to the generic business in the US. Similarly Europe is
emerging as a key market and a potential growth driver. The size of market in 2006 was US
$ 14.2 billion with Germany, France, the UK and Italy accounting for more than 50% of
market. Governments in Europe are trying to reduce healthcare costs by embracing generic
drug companies. Liberalization facilitated the ability of Indian firms to exploit this opportunity
to market generics drugs to the US and other Western economies. Indian firms are preparing
themselves to take a share of this increasing global market. Indian drug manufacturers
currently export their products to more than 65 countries worldwide; the US being the largest
customer. However Indian firms face some difficult challenges such as non-tariff barriers,
decreasing profits in the generics market, competitive threats from big pharma MNEs and
reputation in western markets. For example, US regulation disqualifies Indian firms from
bidding for government contracts and Indian firms have to submit separate Applications for
each state even when firms have FDA approved products and facilities. Another challenge is
the reduction in profit margin due to intense competition from Chinese and Eastern
European manufacturers as well as authorized generics produced by main manufacturer.
Currently Indian industry is estimated to account for 22% of generics in the world market.
Indian firms are aiming to move up the value chain by developing capabilities to produce
‘super generics’ rather than ‘generics generics’ to branded generics.

Furthermore, stronger patent protection under the new patent law of 1999 has shut down the
avenues for exploitation of generics opportunity in domestic market, but promised large
rewards to Indian firms that could leverage their reverse engineering capabilities in
advanced markets. The stronger patent law restricts reverse engineering of newly patented
molecule, thus affecting an important source of growth for Indian firms. Also multinational
pharmaceutical firms have entered India after 2005 and using the same resource base as
Indian firms to compete in the Indian domestic market further increasing pressure on profit
margins of Indian firms. The contract research and manufacturing services (CRAM) market
has emerged as huge opportunity for the Indian pharmaceutical industry. According to Frost
and Sullivan (2005), the global outsourcing market is worth$37 billion and growing at almost
11%; 50% of the contract manufacturing market is in North America, 40% in Europe and just
10% in Asia and the rest of the world. Indian firms possess requisite capabilities to cater for
the requirements of outsourcing markets, still India accounts for barely 1.5% of the global
CRAM industry. Due to untested patent protection law and lack of data protection MNC firms

7
are reluctant to outsource early stage R&D work to Indian firms. Therefore Indian firms are
trying to increase their share in the outsourcing market by moving closer to the market.

Geographically the overseas acquisition by Indian pharmaceutical firms continues to be

directed at developed countries specifically the US and Europe. The major acquisitions are
in the area of marketing although some companies are investing in building manufacturing
and R&D capacities in developed markets. Indian companies have already established
manufacturing plants in the US, Europe, Brazil, Russia and China.

The Indian Region demonstrated strong brand building capabilities, with as many as 6
brands (Sporidex, Revital, Mox, Cifran, Volini and Storvas) featuring in the top 100 brands
list of the Indian pharmaceutical industry.

The Indian region was perceived as the ‘Best-in-class’ by customers, as it topped the List of
companies both Indian and multinational in terms of corporate Image. (Source: Ac Nielsen,
ORG MARG Report, June 2004)

INDUSTRY STRUCTURE

The Pharmaceutical industry in India is fragmented with over 3,000 small/medium sized
generic pharmaceutical manufacturers. It has over 20,000 units out of which 300 units are in
the organized sector; while others exist in the small scale/unorganised sector. The leading
250 pharmaceutical companies control 70% of the market with market leader holding nearly
7% of the market share. There are also 5 Central Public Sector Units that manufacture
drugs. These companies are:
• Indian Drugs & Pharmaceuticals
• Hindustan Antibiotics Ltd.
• Bengal Chemical and Pharmaceuticals Ltd.
• Bengal Immunity Ltd.
• Smith Stanistreet Pharmaceuticals Ltd.

The Indian pharmaceutical industry consists of manufacturers of bulk drugs and

formulations. Bulk drugs include the active pharmaceutical ingredients (APIs) which are used
for the manufacture of formulations. According to estimates, the proportion of formulations
and bulk drugs is in the order of 75:25. There are over 60,000 formulations manufactured in
India in more than 60 therapeutic segments. More than 85% of the formulations produced in
the country are sold in the domestic market. India is largely self-sufficient in case of
formulations, though some lifesaving, new-generation-technology-barrier formulations
continue to be imported.

The Indian pharmaceutical industry has the highest number of plants approved by the US
Food and Drug Administration outside the US. It also has the large number of Drug Master
Files (DMFs) filed which gives it access to the high growth generic bulk drugs market. The
industry now produces bulk drugs belonging to all major therapeutic groups requiring
complicated manufacturing processes and has also developed “good manufacturing
practices” (GMP) compliant facilities for the production of different dosage forms. Setting up
a plant is 40% cheaper in India compared to developed countries and the cost of bulk drug
production is 60-70 percent less. The strength of the industry is in developing cost effective
technologies in the shortest possible time for drug intermediates and bulk activities without
compromising on quality. In accordance with WTO stipulations, India grants product patent
recognition to all New Chemical Entities.

8
TYPES OF DRUG SYSTEM IN INDIA

Ancient civilization allowed India to develop various kinds of medical and pharmaceutical
systems. In addition to the allopathic system, which is prevalent in the United States, Japan
and Europe, the following types of medical and pharmaceutical systems are used by the
Indian people:

Ayurveda: Ayurveda translates as the “science of life”. It encompasses

fundamentals and philosophies about the world and life, diseases and medicines. The
knowledge of Ayurveda is compiled in Charak Samhita and Sushruta Samhita. The curative
treatment lies in drugs, diet and general mode of life.

Siddha: The Siddha system is one of the oldest Indian systems of medicine. Siddha
means “achievement”. Siddhas were saintly figures who achieved healing through the
practice of yoga. The Siddha system does not look merely at a disease but takes into
account a patient’s age, sex, race, habits, environment, diet , physiological constitution and
so forth. Siddha medicines have been effective in curing some diseases, and further work is
needed to truly understand why this system works.

Unani: The Unani system originated in Greece and progressed to India during the
medieval period. It involves promotion of positive health and prevention of disease. The
system is based on the humoral theory i.e. the presence of blood, phlegm, yellow bile and
black bile. A person’s temperament is accordingly expressed as sanguine, phlegmatic,
choleric or melancholic. Drugs derived from plant, metal, mineral and animal origins are
used in this system.
Homeopathy: Homoeopathy is a branch of therapeutics that treats the patient on the
principle of “SIMILIA SIMILIBUS CURENTUR” which simply means “Let likes be cured by
likes”. Homeopathy seeks to stimulate the body's defense mechanisms and processes so as
to prevent or treat illness. Treatment involves giving very small doses of substances called
remedies that, according to homeopathy, would produce the same or similar symptoms of
illness in healthy people if they were given in larger doses. Treatment in homeopathy is
individualized (tailored to each person). Homeopathic practitioners select remedies
according to a total picture of the patient, including not only symptoms but lifestyle,
emotional and mental states, and other factors.
Yoga and Naturopathy: Yoga and Naturopathy are ways of life. In naturopathy one applies
simple laws of nature. It advocates proper attention to eating and living habits. It also
involves hydrotherapy, mud packs, baths, massage and so forth. Yoga consists of eight
components: restraint, observance of austerity, physical postures, breathing exercises,
restraining of the sense organs, contemplation, meditation and Samadhi. Increasing interest
exists in revisiting these ancient drug systems.

INDUSTRY SEGMENTATION
Indian pharmaceutical industry can be widely classified into bulk drugs, formulations and
contract research. Bulk drugs are the Indian name for Active Pharmaceuticals Ingredients
(API). Formulations cover both branded products and generics. Indian pharmaceutical sector
is self-sufficient in meeting domestic demand and exports successfully to various markets
globally. The existence of process patents in India till January 2005 fuelled the growth of

9
domestic pharmaceutical companies and developed them in areas like organic synthesis
and process engineering, as a result of which, Indian pharmaceuticals sector is able to meet
almost 95 percent of the country’s pharmaceutical needs. India is globally recognized as a
low cost, high quality bulk drugs and formulations manufacturer and supplier. Contract
Research, a nascent industry in India has witnessed commendable growth in the last few
years. As per Yes Bank /OPPI report (2007-08), formulation segment (including domestic
formulation and formulation exports) constituted 72%of the total pharmaceutical industry (in
terms of sales) while bulk drugs and contract research constituted 25% and 3% of
pharmaceutical industry respectively.

Fig: Segment-wise sales

10
BULK DRUGS
Bulk drug industry is the backbone of the Indian pharmaceutical industry. Growth of Indian
bulk drug industry in the last five decades has been impressive and highest among
developing countries. From a mere processing industry, Indian bulk drug industry has
evolved into sophisticated industry today, meeting global standards in production,
technology and quality control. Today, India stands among the top five producers of bulk
drugs in the world. The market is fragmented with far too many players. About 300 organised
companies are involved in the production of bulk drugs in India. Over 70 percent of India’s
bulk drug production is exported to more than 50 countries and the balance is sold locally to
other formulators. Indian bulk drug industry is mainly concentrated in the following regional
belts - Mumbai to Ankleshwar, Hyderabad to Madras and Chandigarh. Around, 18000 bulk
drug manufacturers exist in India. Some major producers of bulk drugs in Indian
pharmaceutical industry are Ranbaxy Laboratories, Sun Pharma, Cadila, Wockhardt,
Aurobindo Pharma, Cipla, Dr. Reddy’s Laboratories, Orchid Pharmaceuticals & Chemicals,
Nicholas Piramal, Lupin, Aristo Pharmaceuticals, etc. Most are involved in bulk as well as
formulations while a few are solely into bulk drugs.

India is the world’s fifth largest producer of bulk drugs. The market size is expected to grow
at higher percentages in future years with more and more international companies
depending on India to meet their bulk-drug supply needs. Moreover, India is way ahead of
competitors in the total number of Drug Master File (DMF) filings. Of the overall DMF filings
to US FDA, the portion of filings by Indian players has jumped from around 14% in 2000 to
46% of total filings in 2008( January-June) This growth in proportion speaks volumes about
the quality standards followed in Indian manufacturing facilities.

Fig: Increasing share of Indian companies in DMF filings (US FDA)

(SOURCE: CRISINFAC, YES BANK/ OPPI)

The growing number of DMF filings signifies the increase in number of contracts that Indian
players have garnered. While India has recorded 1671 DMF filings, China shows a tally of
520, the second largest number of DMF filings after India. In 2008 (January-June), India’s
DMF filings were around 3.5 times that of China -187 from India vis-à-vis 51 from China.

The bulk drug segment is a low-margin and volume-driven business. The thrust is on
manufacturing. In manufacturing operation, efficiency through better process skills to reduce
both manufacturing time and cost is critical. Low cost manufacturing is a distinct advantage
gained by Indian companies over a period of time with a steep learning curve. Bulk Drugs
exports have grown significantly in the past on account of growth in generic industry,
increasing share of Indian companies in DMF filings and contract manufacturing opportunity.

11
Bulk drugs exports grew robustly by 28% CAGR between 2001-02 and 2007-08 to reach an
estimated USD4.2 billion.

Fig. India’s Bulk Drug Export (CRISINFAC, YES BANK/ OPPI)

As already explained, India has carved a niche for itself by being one of the largest bulk drug
suppliers. India offers a number of distinctive advantages in the pharmaceutical industry, as
illustrated in the figure below:

Fig: Advantage India-API

(SOURCE: CRISINFAC, YES BANK/ OPPI)

India has many local manufacturing equipment manufacturers. These equipments are of
high quality and low cost, thus reducing the cost of capital. According to industry estimates,
Indian companies are able to reduce the upfront capital cost of setting up a project by as
much as 25-50%due to locally manufactured equipment and high quality
technology/engineering skills. Competition in the India’s domestic formulation market has
made it inevitable for API suppliers to continuously develop alternative production methods
to improve yield or reduce costs. This ensures that India has a significant cost advantage
due to process engineering.

Apart from availability of a high number of skilled chemists, India also offers scientists with
vast experience and unmatched skills. The scientific staff in India though equivalent or better
qualified are also available at a fraction of the cost. This makes Indian research firms more

12
competitive than many international firms while being cost competitive. Labour costs are also
low in India, being almost 1/7th of that in many developed countries and offer an obvious cost
advantage.

FORMULATIONS
Formulations are broadly categorized into patented drugs and generic drugs. A patented
drug is an innovative formulation that is patented for a period of time (usually 20 years) from
the date of its approval. A generic drug is a copy of an expired patented drug that is similar
in dosage, safety, strength, method of consumption, performance and intended use.

Formulation Industry can be subdivided into two segments:

• Domestic Formulation Industry
• Indian Formulation Exports

Domestic Formulation Industry

Between 2002 and 2007, the domestic formulation industry grew at a CAGR of 14% from
around USD4.3 billion in 2002 to USD 8.4 billion in 2007. Demand in India is growing
markedly due to rising population, increasing per capita income, increasing access to
medicine, especially in the rural areas and an increasing population of over sixty years of
age.

Fig: Growth in domestic formulation industry (OPPI, ORGIMS)

(SOURCE: CRISINFAC, YES BANK/ OPPI
Presently, the growth of a domestic pharmaceutical company is critically dependant on its
therapeutic presence. In terms of end-use, the pharmaceutical industry is sub-divided into
several therapeutic segments. These segments are broadly defined on the basis of
therapeutic application. Some of these segments are low-volume, high margin segments,
while the others are high-volume with relatively low margins. The new lifestyle categories like
Cardiac, Respiratory and Vitamins are expanding at double-digit growing rates. The long
term ailment, chronic therapies is now accounting 24% of the market. The only growth driver
for acute therapies is the new product introduction under this segment. Today, anti-infective
which used to be the single largest therapeutic segment in Indian pharmaceutical industry is

13
increasing. Anti-infective segment is now 1st in terms of value contribution followed by
Gastrointestinal and Cardiac.

The key therapeutic segments include:

• Anti-infective
• Cardio vascular
• Central nervous system drugs

Anti-infective is currently the largest therapeutic segment in India. It accounts for one-fifth of
total market turnover. Next in line, and accounting for one-tenth each, are cardio-vascular
preparations, cold remedies, pain killers and respiratory solutions.

Fig. Therapeutic wise distribution (ORGIMS)

(SOURCE: CRISINFAC, YES BANK/ OPPI)

INDIAN FORMULATION EXPORTS

Indian formulation exports grew at a CAGR of 23.2% touching around USD 4 billion in 2007-
08. The growth has been spurred mainly due to the focus on regulated markets by most
Indian companies, thereby increasing revenues.

Fig: Indian Formulation Exports (SOURCE: CRISINFAC, YES BANK/

OPPI)

14
CONTRACT RESEARCH AND MANUFACTURING:
Increasing costs of R&D, coupled with low productivity and poor bottom lines, have forced
major pharmaceutical companies worldwide to outsource part of their research and
manufacturing activities to low-cost countries, thereby saving costs and time in the process.
The global pharmaceutical outsourcing market was worth USD57.2 billion in 2007. It is
expected to grow at a CAGR of 10% to reach USD76 billion by 2010. Global market for
Contract Research and Manufacturing Services (CRAMS) in 2007 is estimated to be
USD55.48 billion. Out of the total global CRAMS market, contract research was USD16.58
billion, growing at a CAGR of 13.8% and contract manufacturing was USD38.89 billion
accounting for the major share (approximately 68%) of the total global pharmaceutical
outsourcing market.

India, with more than 80 US FDA-approved manufacturing facilities, is one of the most
preferred locations for outsourcing manufacturing services in India by the multinationals and
global pharmaceutical companies. The Indian pharmaceutical outsourcing market was
valued at USD1.27m in 2007 and is expected to reach USD3.33 billion by 2010, growing at a
CAGR of 37.6%. The Indian CRAMS market stood at USD1.21 billion in 2007, and is
estimated to reach USD3.16 billion by 2010.

India holds the lion's share of the world's contract research business as activity in the
pharmaceutical market continues to explode in this region. Over 15 prominent contract
research organisations (CROs) are now operating in India attracted by her ability to offer
efficient R&D on a low-cost basis. Thirty five per cent of business is in the field of new drug
discovery and the rest 65 per cent of business is in the clinical trials arena. India offers a
huge cost advantage in the clinical trials domain compared to Western countries. The cost of
hiring a chemist in India is one-fifth of the cost of hiring a chemist in the West.

DOMESTIC GROWTH DRIVERS:

Pharmaceutical sector is one of the most globalized sectors among the Indian industries.
The downside is pharmaceutical sector traditionally has been immune to business cycles.
The upside of Indian pharmaceutical sector, however, is influenced by a mix of global and
local factors. Global factors are important as most Indian companies ship a major portion of
their production to overseas markets. Also, multinationals operating in the Indian market
follows the central research and global marketing model. Their actions are largely dictated
by global trends although local issues are given due importance. The domestic market is
critical for both Indian companies and multinationals. For Indian companies, the domestic
market lends stability to bottom line and offer means to cope with fluctuations in global
demand. The growth drivers for Indian pharmaceutical market are:

Growing Population and Improving Incomes: Household incomes are rising in India; the
proportion of middleclass in Indian population is also increasing. Statistics show a clear
migration of population towards middle and upper classes. Rise in income levels is always
accompanied by greater demand for medical facilities and pharmaceutical products. Middle
class is already 70 million strong and is expected to grow even fast, accounting for a higher
share of total population. Increase in living standards will lead to longer life expectance and
higher consumption of drugs and health care services.

Changing lifestyles: Rising incomes and improving literacy rates are leading to change in
lifestyles. While incomes provide the means to access medical facilities and products,
improving literacy boost awareness about diseases and lead to higher consumption of drugs.
Changing lifestyles, however, is leading to a change in disease profile especially in urban

15
areas. Hectic lifestyles and high cholesterol diets are resulting growing incidence of diseases
such as cardio vascular diseases and cancer.

Research and Development: The R&D efforts of Indian companies have been largely
focussed on chemical synthesis of molecules and their cost effective production thereof.
India has a large pool of technical and scientific personnel with good English language skills.
Indian scientists have developed a high degree of chemical synthesis skills while engineers
have developed competencies in producing molecules cost effectively. These skills have
helped Indian companies tap generic markets abroad successfully in the past and will
continue to do so.

Healthcare Expenditure: Indian healthcare system is largely run by the govt with private
sector playing a small, but important part. The healthcare system in India comprises
government hospitals in cities and towns and a network of health centres in rural areas. This
is supplemented by a string of private hospitals and clinics in largely urban areas. The public
expenditure on health has been growing at a decent rate while private expenditure has been
recording marginal growth.

Insurance Sector giving a Lift: Indian insurance sector has been thrown open to private
sector. Large sections of Indian population are not covered by health insurance schemes.
Currently, less than 10% of the Indian population is covered by some form of health
insurance.

DOMESTIC EXPORTS
Pharmaceutical exports touched a level of Rs. 24942 crores during 2006-07. Exports
constitute a substantial part of the total production of pharmaceuticals in India.

YEAR EXPORT (Rs. in Crores)

1998-1999 6256.06
1999-2000 7230.16
2000-2001 8757.47
2001-2002 9751.20
2002-2003 12826.10
2003-2004 15213.24
2004-2005 17857.80
2005-2006 22578.98
2006-2007 24942.00

(Source:-Directorate General of Commercial Intelligence and Statistics - DGCIS, Kolkata)

The formulations contribute nearly 55% of the total exports and the rest 45% comes from
bulk drugs. Pharmaceutical exports clocked $7.2 billion in 2007-08, accounting for six per
cent of the country’s total exports, according to Pharmexcil, the Pharmaceutical Export
Promotional Council.

16
CRITICAL SUCCESS FACTORS
The rules of pharmaceutical business are changing. Indian pharmaceutical companies can
no longer get away with plundering intellectual properties of multinational companies.
Pharmaceutical business has become a new ballgame altogether after the introduction of
product patents in January 2005.

NEW PRODUCT DEVELOPMENT

Pre 2005: New product development efforts of Indian pharmaceutical companies in process
patents era were limited to reverse engineering molecules discovered by other companies.
Thanks to absence of product patents, Indian companies did not have to go through long
winded drug development process. Nor did Indian companies have to expend any effort on
research focus. Indian companies simply zeroed in on blockbuster drugs and tried to come
up with an alternative process as fast as they could. The focus of the Indian companies was
to launch a copy of a blockbuster drug ahead of their rivals in India and abroad.

Key areas to focus on R&D for Indian companies:

Potential product identification
Complex API
Complex finished product
Commercial potential of products
Out-licensing opportunity to MNCs

Novel Drug Delivery System (NDDS)

New Drug Development
Post 2005: A large number of drugs are going “off patent” in the next few years. According to
IMH Health, more than $60 billion worth of drugs are going “off patent” by 2011. Thus, Indian
companies will not be short of new products for at least another two years. In the long run,
however Indian companies may find it hard to make money from drugs coming off patent.
Already competition in generic market is intense and likely to increase further in the future.
Hence, new molecules rather than generics will drive revenues and profits in the product
patents area. Indian companies need to discover new drugs either through their own efforts
or research alliances. Perhaps licensing deals with multinationals could also provide Indian
companies access to new drugs. Focus on basic research will come with its own issues.
Indian companies will have to acquire the skills of identifying research areas that offer
excellent revenue and profit potential. This will entail a closer tracking of disease profiles and
related therapies as well as keeping a close tab on the research programmes of rivals.
Besides, Indian companies will have to pay more attention to economics of drug
development process. A product patent is granted for a period of 20 years

THERAPEUTIC COVERAGE
Pre-2005: In the absence of product patents, Indian pharmaceutical companies did not feel
the need to focus on specific therapeutic areas. Most Indian pharmaceutical companies
eschewed narrow focus and tried to cover as many therapeutic areas as possible. Now the
product portfolio of many Indian companies has considerable breadth and depth. Given the
price controls in the market, diversification worked to the advantage of companies in the
domestic markets. In the export markets, a wider product portfolio gave companies the
option of picking and choosing from an array of opportunities.

17
Post 2005: Opinion is divided over the therapeutic strategy that Indian companies should
pursue in product patent era. Some companies believe that focus on select therapeutic
segment will fetch them greater dividends in terms of new chemical entities and market
share. Other companies believe such a strategy is risky given the size of Indian companies
and that a big setback in research could sink the company. Instead such companies are
pursuing a de-risking strategy of building a wide product portfolio. In the domestic market,
such a strategy will result in economies of scale at production and marketing stage, putting
the company in a better place to weather competition from multinationals. In the export
markets even after the introduction of product patents, products under patent protection will
comprise only 15 percent of the market. So a vast chunk of the market will be still open for
competition although margins will be wafer thin.

EXPORTS
Pre-2005: Most Indian companies focused on exports. Exports improve the valuation of
companies owing to higher margin in overseas markets. Indian companies built fortunes by
making cheaper versions of blockbuster drugs and selling them in domestic and export
markets. Indian companies built especially strong position in manufacture of bulk drugs. Out
of the total exports, formulations constituted 55 percent and bulk drugs constituted 45
percent. Success in export market allowed some Indian companies to build a strong position
in the domestic market organically and through acquisitions of brands and companies.
Post 2005: Exports has continued to be a priority for Indian companies. Major blockbuster
drugs will come off patent in the near future, creating a big generic opportunity for Indian
companies. Also, a growing demand for anti-AIDS drugs in Africa will keep Indian companies
busy. Exports have and will continue to provide Indian companies with the strength to
withstand the onslaught of multinationals in the domestic market.

LOW COST PRODUCTION THROUGH SCALE

Pre-2005: Indian pharmaceutical companies have mastered the science of producing drugs
cheaply. Thanks to benign patents regime, Indian companies have developed a high level of
chemical synthesis skills. The absence of development costs together with efficient
production has enabled Indian companies to establish a solid position in bulk drug
manufacturing. But scale did not receive as much importance as it should have, because the
cost of Indian pharmaceutical companies was already low owing to aforesaid reasons. Many
Indian companies did not find the return on investment of world class plants compelling
enough.
Post 2005: By 2011, drugs worth $60 billion will come off patent, presenting a huge generic
opportunity to Indian companies. But the competition in the generic market will be brutal,
resulting in thin margins. The cost of production will hold the key to success in the generic
market. The production cost in turn depends on scale. Indian pharmaceutical companies
need to build global scale to stand a chance in the generics market.

BOOMING SALES:
India is gaining in importance as a manufacturer of pharmaceuticals. Between 1996 and
2006, nominal sales of pharmaceuticals were up 9% per annum and thus expanded much
faster than the global pharmaceutical market as a whole (+7% p.a.). Demand in India is
growing markedly due to rising population figures, the increasing number of old people and
the development of incomes. As a production location, the country is benefiting from its
wage cost advantages over western competitors also when it comes to producing medicines.

18
STRONG GROWTH CONTINUES:
Up until 2015, we expect pharmaceutical sales to rise by 8% p.a. to just under EUR 20 bn,
compared with an increase of 6% in the world as a whole and 5% in Germany. But even
then, India’s share in the world pharmaceutical market would only come to slightly over 2%
(Germany: 7%). In Asia, India looks set to lose market share, as other Asian countries are
registering even stronger growth.

INDIA'S PHARMACEUTICAL INDUSTRY IN THE SPOTLIGHT:

In 2001, India’s pharmaceutical industry became the focus of public debate when Cipla, the
country's second-largest pharmaceuticals company, offered an AIDS drug to African
countries for the price of USD 300, while the same preparation cost USD 12,000 in the US.
This was possible because the Indian company produced an all-inone generic pill which
contains all three substances required in the treatment of AIDS. This kind of production is
much more difficult in other countries as the patents are held by three different companies.
In the final analysis, the price slump was a result of India's lax patent legislation. In 2005,
patent legislation was tightened, so India’s pharmaceutical sector had to adjust.

19
PHARMACEUTICAL REGULATORY BODIES IN INDIA
National Pharmaceutical Pricing Authority (NPPA)-
NPPA is an organization of the Government of India which was established, to fix/ revise the
prices of controlled bulk drugs and formulations and to enforce prices and availability of the
medicines in the country, under the Drugs (Prices Control) Order, 1995.
The organization is also entrusted with the task of recovering amounts overcharged by
manufacturers for the controlled drugs from the consumers.
It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.

Central Drugs Standard and Control Organization (CDSCO) -

CDSCO lays down standards and regulatory measures of drugs, cosmetics, diagnostics and
devices in the country. It regulates clinical trials and market authorization of new drugs. It
also publishes the Indian Pharmacopeia. The main functions of the Central Drug Standard
Control Organization (CDSCO) include control of the quality of drugs imported into the
country, co-ordination of the activities of the State/UT drug control authorities, approval of
new drugs proposed to be imported or manufactured in the country, laying down of
regulatory measures and standards of drugs and acting as the Central Licensing Approving
Authority in respect of whole human blood, blood products, large volume parenterals , sera
and vaccines. The CDSCO functions from 4 zonal offices, 3 sub-zonal offices besides 7 port
offices. The four Central Drug Laboratories carry out tests of samples of specific classes of
drugs.

Department of Chemicals & Petrochemicals (DCP)

DCP is responsible for the policy, planning, development, and regulation of the chemical,
petrochemical, and pharmaceutical industries in India. This department aims:
To provide impartial and prompt services to the public in matters relating to chemical,
pharmaceutical and petrochemical industries;
To take steps to speedily redressal of grievances received;
To formulate policies and initiate consultations with Industry associations and to amend them
whenever required.

20
Indian Pharma: Qualitative analysis
PORTER FIVE FORCES MODEL:
Today's business environment is extremely competitive and in economics parlance where
perfect competition exists, the profits of the firms operating in that industry will become zero.
However, this is not possible because, firstly no company is a price taker (i.e. no company
will operate where profits are zero).
Secondly, they strive to create a competitive advantage to thrive in the competitive scenario.
Michael Porter, considered to be one of the foremost gurus' of management, developed the
famous five-force model, which influences an industry.

(a) INDUSTRY COMPETITION

Pharmaceutical industry is one of the most competitive industries in the country with as
many as 10,000 different players fighting for the same pie. The rivalry in the industry can be
gauged from the fact that the top player in the country has only 6 %( 2006) market share,
and the top 5 players together have about 18 %( 2006) market share.

Thus, the concentration ratio for this industry is very low. High growth prospects make it
attractive for new players to enter in the industry. Another major factor that adds to the
industry rivalry is the fact that the entry barriers to pharmaceutical industry are very low. The
fixed cost requirement is low but the need for working capital is high.

The fixed asset turnover, which is one of the gauges of fixed cost requirements, tells us that
in bigger companies this ratio is in the range of 3.5-4 times. For smaller companies, it would
be even higher.
Many small players that are focused on a particular region have a better hang of the
distribution channel, making it easier to succeed, albeit in a limited way.

21
An important fact is that, pharmaceutical is a stable market and its growth rate generally
tracks the economic growth of the country with some multiple (1.2 times average in India).
Though volume growth has been consistent over a period of time value growth has not
followed in tandem.
The product differentiation is one key factor which gives competitive advantage to the firms
in any industry. However, in pharmaceutical industry product differentiation is not possible
since India has followed process patents till date, with loss favoring imitators. Consequently
product differentiation is not a driver, cost competitiveness is. However, companies like
Pfizer and Glaxo have created big brands over the years which act as product differentiation
tools.

Earlier it was easy for Indian pharmaceutical companies to imitate pharmaceutical products
discovered by MNCs at a lower cost and make good profit. But today the scene is different
with the arrival of the patent regime which has forced Indian companies to rethink its
strategies and to invest more on R&D. Also contract research has assumed more
importance now.

(b) BARGAINING POWER OF BUYERS

The unique feature of pharmaceutical industry is that the end user of the product is different
from the influencer (read doctor). The consumer has no choice but to buy what doctor says.
However, when we look at the buyer’s power, we look at the influence they have on the
prices of the product. In pharmaceutical industry, the buyers are scattered and they as such
do not wield much power in the pricing of the products. However, govt with its policies, plays
an important role in regulating pricing through the NPPA (national pharmaceutical pricing
authority).

(c) BARGAINING POWER OF SUPPLIERS

The pharmaceutical industry depends upon several organic chemicals. The chemical
industry is again very competitive and fragmented. The chemicals used in the
pharmaceutical industry are largely a commodity. The suppliers have very low bargaining
power and the companies in the pharmaceutical industry can switch from their suppliers
without incurring a very high cost. However, what can happen is that the supplier can go for
forward integration to become a pharmaceutical company. Companies like Orchid Chemicals
and Sashun Chemicals were basically chemical companies who turned themselves into
pharmaceutical companies.

(d) BARRIERS TO ENTRY

Pharmaceutical industry is one of the most easily accessible industries for an entrepreneur
in India. The capital requirement for the industry is very low; creating a regional distribution
network is easy, since the point of sales is restricted in this industry in India. However,
creating brand awareness and franchisee among doctors is the key for long term survival.
Also, quality regulations by the government may put some hindrance for establishing new
manufacturing operations. The new patent regime has raised the barriers to entry. But it is
unlikely to discourage new entrants, as market for generics will be as huge.

(e)THREAT OF SUBSTITUTES

This is one of the great advantages of the pharmaceutical industry. Whatever happens,
demand for pharmaceutical products continues and the industry thrives. One of the key
reasons for high competitiveness in the industry is that as an ongoing concern,
pharmaceutical industry seems to have an infinite future. However, in recent times the

22
advances made in the field of biotechnology, can prove to be a threat to the synthetic
pharmaceutical industry.

SWOT ANALYSIS - INDIAN PHARMACEUTICAL INDUSTRY

The SWOT analysis of the industry reveals the position of the Indian pharmaceutical industry
in respect to its internal and external environment.

STRENGTHS-

1. India with a population of over a billion is a largely untapped market. In fact the
penetration of modern medicine is less than 30% in India. To put things in perspective, per
capita expenditure on health care in India is US$ 93 while the same for countries like Brazil
is US$ 453 and Malaysia US$189.
2. The growth of middle class in the country has resulted in fast changing lifestyles in urban
and to some extent rural centres. This opens a huge market for lifestyle drugs, which has a
very low contribution in the Indian markets.
3. Indian manufacturers are one of the lowest cost producers of drugs in the world. With a
scalable labour force, Indian manufactures can produce drugs at 40% to 50% of the cost to
the rest of the world. In some cases, this cost is as low as 90%.
4. The fact that despite the low level of unit labour costs India boasts a highly skilled
workforce has enabled the country's pharmaceutical industry at a relatively early stage to
offer quality products at competitive prices. Each year, roughly 115,000 chemists graduate
from Indian universities with a master’s degree and roughly 12,000 with a PhD.4 The
corresponding figures for Germany – just fewer than 3,000 and 1,500, respectively – are
considerably lower. After many chemists from India migrated to foreign countries over the
last few years, they now consider their chances of employment in India to have improved. As
a result, a smaller number is expected to go abroad in the coming years; some may even
return.
5. Indian pharmaceutical industry possesses excellent chemistry and process reengineering
skills. This adds to the competitive advantage of the Indian companies. The strength in
chemistry skill helps Indian companies to develop processes, which are cost effective.

WEAKNESS-

The Indian pharmaceutical companies are marred by the price regulation. Over a period of
time, this regulation has reduced the pricing ability of companies. The NPPA (National
Pharmaceutical Pricing Authority), which is the authority to decide the various pricing
parameters, sets prices of different drugs, which leads to lower profitability for the
companies. The companies, which are lowest cost producers, are at advantage while those
who cannot produce have either to stop production or bear losses.
Indian pharmaceutical sector has been marred by lack of product patent, which prevents
global pharmaceutical companies to introduce new drugs in the country and discourages
innovation and drug discovery. But this has provided an upper hand to the Indian pharma
companies.
Indian pharma market is one of the least penetrated in the world. However, growth has been
slow to come by. As a result, Indian majors are relying on exports for growth. To put things in
to perspective, India accounts for almost 16% of the world population while the total size of
industry is just 1% of the global pharma industry.
Due to very low barriers to entry, Indian pharma industry is highly fragmented with about 300
large manufacturing units and about 18,000 small units spread across the country. This
makes Indian pharma market increasingly competitive. The industry witnesses price

23
competition, which reduces the growth of the industry in value term. To put things in
perspective, in the year 2003, the industry actually grew by 10.4% but due to price
competition, the growth in value terms was 8.2% (prices actually declined by 2.2%)

OPPORTUNITIES-

The migration into a product patent based regime is likely to transform industry fortunes in
the long term. The new patent product regime will bring with it new innovative drugs. This will
increase the profitability of MNC pharma companies and will force domestic pharma
companies to focus more on R&D. This migration could result in consolidation as well. Very
small players may not be able to cope up with the challenging environment and may
succumb to giants.
Large number of drugs going off-patent in Europe and in the US between 2005 to 2009
offers a big opportunity for the Indian companies to capture this market. Since generic drugs
are commodities by nature, Indian producers have the competitive advantage, as they are
the lowest cost producers of drugs in the world.
Opening up of health insurance sector and the expected growth in per capita income are key
growth drivers from a long-term perspective. This leads to the expansion of healthcare
industry of which pharma industry is an integral part.
Being the lowest cost producer combined with FDA approved plants; Indian companies can
become a global outsourcing hub for pharmaceutical products.

THREATS-
There are certain concerns over the patent regime regarding its current structure. It might be
possible that the new government may change certain provisions of the patent act
formulated by the preceding government.
Threats from other low cost countries like China and Israel exist. However, on the quality
front, India is better placed relative to China. So, differentiation in the contract manufacturing
side may wane.
The short-term threat for the pharma industry is the uncertainty regarding the implementation
of VAT. Though this is likely to have a negative impact in the short-term, the implications
over the long-term are positive for the industry.

24
Pharma Marketing and Its Challenges
Marketing in Pharmaceutical industry is totally different from other industries like FMCG.
Industrial goods etc. because of following reasons:-

The pharmaceutical product does not reach directly as the patients consume only those
brands which are being prescribed by the doctor so as we know companies can’t sell directly
to patients i.e the end users of the products is away from companies. So there can’t be
concept of direct seeking in the pharma market. So it is doctor who is the customer for
companies.

Pharma marketing is also different as the product is technical in nature as compared to any
consumer product. The product has to undergo various clinical trails, medical test, before it
is introduced in the market.

Strategies are followed by pharmaceutical companies:-

• Personal Selling
• Symposium
• Sample Gifts
• Promotional Literature
• Conferences
• Direct Mailing

Pharmaceutical marketing is the business of advertising or otherwise promoting the sale of

pharmaceuticals or drugs.

Mass marketing of prescription medications was rare until recently, however. It was long
believed that since doctors made the selection of drugs, mass marketing was a waste of
resources; specific ads targeting the medical profession were thought to be cheaper and just
as effective. This would involve ads in professional journals and visits by sales staff to
doctor’s offices and hospitals. An important part of these efforts was marketing to medical
students.

The marketing of medication has a long history. The sale of miracle cures, many with little
real potency, has always been common. Marketing of legitimate non-
prescription medications, such as pain relievers or allergy medicine, has also long been
practiced. Mass marketing of prescription medications was rare until recently, however. It
was long believed that since doctors made the selection of drugs, mass marketing was a
waste of resources; specific ads targeting the medical profession were thought to be
cheaper and just as effective. This would involve ads in professional journals and visits by
sales staff to doctor’s offices and hospitals. An important part of these efforts
was marketing to medical students.

Direct and indirect marketing to health care providers

Physicians are perhaps the most important component in pharmaceutical sales. They write
the prescriptions that determine which drugs will be used by the patient. Influencing the
physician is the key to pharmaceutical sales. Historically, this was done by a large
pharmaceutical sales force. A medium-sized pharmaceutical company might have a sales
force of 1000 representatives. The largest companies have tens of thousands of
representatives around the world. Sales representatives called upon physicians regularly,
providing information and free drug samples to the physicians.

25
This is still the approach today; however, economic pressures on the industry are causing
pharmaceutical companies to rethink the traditional sales process to physicians.
More recently, the Partners Healthcare, Massachusetts' largest hospital and physician
network, will adopt new guidelines prohibiting physicians and researchers from accepting
gifts from pharmaceutical manufacturers. This will include meals or individual drug samples,
and also drug samples left by companies will be distributed through a centralized system,
while educational programs and fellowships will also be required to be centrally reviewed
and approved.
Pharmaceutical companies are developing processes to influence the people who influence
the physicians. There are several channels by which a physician may be influenced,
including self-influence through research, peer influence, direct interaction with
pharmaceutical companies, patients, and public or private insurance companies. There are
also web based instruments that can be used to determine the influencers and buying
motives of physicians.
There are a number of firms that specialize in data and analytics for pharmaceutical
marketing.

Individual research

Physicians discover pharmaceutical information from such sources as the Physician's Desk
Reference and online sources such as PDR.net, as well as via PDAs with applications.
They also rely upon pharmaceutical-branded e-detailing sites, pharmaceutical sales and
non-sales representatives, and scholarly literature. Scholarly literature can be in the form of
medical journal article reprints, often delivered by sales representatives at their place of
employment or at conference exhibitions.

Peer influence

Key opinion leaders

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

Colleagues
Physicians acquire information through informal contacts with their colleagues, including
social events, professional affiliations, common hospital affiliations, and common medical
school affiliations. Some pharmaceutical companies identify influential colleagues through
commercially available prescription writing and patient level data.Doctor dinner meetings are
an effective way for physicians to acquire educational information from respected peers.
These meetings are sponsored by some pharmaceutical companies.

Direct physician contact with pharmaceutical sales representatives

A pharmaceutical representative will often try to see a given physician every few weeks.
Representatives often have a call list of about 200 physicians with 120 targets that should be
visited in 1-2 week cycles.

Because of the large size of the pharmaceutical sales force, the organization, management,
and measurement of effectiveness of the sales force are significant business challenges.
Management tasks are usually broken down into the areas of physician targeting, sales force
size and structure, sales force optimization, call planning, and sales forces effectiveness.

26
A few pharmaceutical companies have realized that training sales representatives on high
science alone is not enough, especially when most products are similar in quality. Thus,
training sales representatives on relationship selling techniques in addition to medical
science and product knowledge, can make a difference in sales force effectiveness.
Specialist physicians are relying more and more on specialty sales reps for product
information, because they are more knowledgeable than primary care reps.

Physician targeting

Marketers attempt to identify the universe of physicians most likely to prescribe a given drug.
Historically, this was done by measuring the number of total prescriptions (TRx) and new
prescriptions (NRx) per week that each physician writes. This information is collected by
commercial vendors. The physicians are then "deciled" into ten groups based on their writing
patterns. Higher deciles are more aggressively targeted. Some pharmaceutical companies
use additional information such as:
• profitability of a prescription (script),accessibility of the physician,
• tendency of the physician to use the pharmaceutical company's drugs,
• effect of managed care formularies on the ability of the physician to prescribe a drug,
• the adoption sequence of the physician (that is, how readily the physician adopts new
drugs in place of older, established treatments), and
• the tendency of the physician to use a wide palette of drugs

Data for drugs prescribed in a hospital are not usually available at the physician level.
Advanced analytic techniques are used to value physicians in a hospital setting

Opinion Leader Influence Mapping

Alternatives to segmenting physicians purely on the basis of prescribing do exist, and

marketers can call upon strategic partners who specialize in delineating which
characteristics of true opinion leadership, a physician does or does not possess. Such
analyses can help guide marketers in how to optimize KOL engagements as bona fide
advisors to a brand, and can help shape clinical development and clinical data publication
plans for instance, ultimately advancing patient care.

Sales force size and structure

Marketers must decide on the appropriate size of a sales force needed to sell a particular
portfolio of drugs to the target universe. Design the optimal reach (how many physicians to
see) and frequency (how often to see them) for each individual physician. Decide how many
sales representatives to devote to office and group practice and how many to devote to
hospital accounts. Additionally, customers are broken down into different classes, each class
is differentiated by their prescription behaviour and of course, their business potential.

Direct marketing to patients

Recent years have seen an increase in mass media advertisements for pharmaceuticals.
Expenditures on direct-to-consumer (DTC pharmaceutical advertising) have more than
quintupled in the last seven years since the FDA changed the guidelines.

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

27
transaction (prescription) for which direct customer (doctor) of pharma industry is
responsible. Essentially, the end-user (patient) consumes a product and pays the cost.

From organizational perspective the most prominent performance related issues are
Increased competition and unethical practices adopted by some of the propaganda base
companies.

• Low level of customer knowledge (Doctors, Retailers, Wholesalers).

• Poor customer (both external & internal) acquisition, development and retention
strategies

• Varying customer perception.

• The number and the quality of medical representatives

• Very high territory development costs.

• High training and re-training costs of sales personnel.

• Very high attrition rate of the sales personnel.

• Busy doctors giving less time for sales calls.

• Poor territory knowledge in terms of business value at medical representative level .

• Unknown value of revenue from each retailer in the territory

• Absence of ideal mechanism of sales forecasting from field sales level, leading to
huge deviations

PATENTS
Patents are a vital aspect of the global pharma industry. Patent protection is essential to
spur basic R&D and make it commercially viable. But, only the developed nations endorse
product patents. Most third world countries have patent laws but enforcement is totally lax.

NEW DRUG APPROVAL (NDA)

Prior to launching its products in any country, a pharma company undertakes patent
registration to protect its own interests. To protect the interests of the consumers, it is
necessary that the product be approved by the drug authorities in that country. Mostly the
process for seeking approval is initiated alongside the patent registration process.

WTO
Due to pressure from the developed countries, across the world uniformity in patent laws is
being implemented under WTO (World Trade Organization - earlier GATT i.e. General
Agreement on Tariffs & Trade). Presently, different countries have different patent types and
life period. WTO has decided upon a product patent life of 20 years in all countries.

RESEARCH & DEVELOPMENT (R&D)

The pharmaceutical industry is characterized by heavy R&D expenditure. It is only the large
pharmaceutical companies who can allocate significant resources for R&D to introduce new
products. As the products are an outcome of significant R&D expenditures incurred by these
companies, they have their products patented. The patent allows the companies concerned
to wield immense pricing power for their new products.

28
THE COMPETITION
The level of competition on day to day basis in very high in Acute segment however the
degree of competition in not as much as high in Chronic therapy area. As doctor has to
prescribe drug for a long time in chronic cases and patient is supposed to consume it without
any change of brand. While in acute cases doctor is changing brands on day to day basis. In
acute area however there is a large competition from local and propaganda companies.

Sales Promotion Activity through Medical Representatives

JOB DESCRIPTION

Medical sales representatives are a key link between medical and pharmaceutical
companies and healthcare professionals. They work strategically to increase the awareness
and use of a company’s pharmaceutical and medical products in settings such as general
practices, primary care trusts and hospitals.

Based in a specific geographical location, and usually specializing in a particular product or

medical area, medical sales representatives try to ensure clients are aware of, buy and
subsequently use their company's products. They may also make presentations and
organize group events for healthcare professionals, as well as working with contacts on a
one-to-one basis.

TYPICAL WORK ACTIVITIES

In particular, typical work activities include:

• Arranging appointments with doctors, pharmacists and hospital medical teams, which
may include pre-arranged appointments or regular 'cold' calling;

• Making presentations to doctors, practice staff and nurses in GP surgeries, hospital

doctors, and pharmacists in the retail sector. Presentations may take place in
medical settings during the day or may be conducted in the evenings at a local hotel
or conference venue;

• organizing conferences for doctors and other medical staff;

• building and maintaining positive working relationships with medical staff and
supporting administration staff e.g. receptionists;

• managing budgets (for catering, outside speakers, conferences, hospitality, etc);

• keeping detailed records of all contacts and reaching (and if possible exceeding)
annual sales targets;

• Planning work schedules and weekly and monthly timetables. This may involve
working with the area sales team or discussing future targets with the area sales
manager. Generally, medical sales executives have their own regional area of
responsibility and plan how and when to target health professions;

• regularly attending company meetings, technical data presentations and briefings;

• keeping up with the latest clinical data supplied by the company and interpreting,
presenting and discussing this data with health professionals during presentations;

29
 • monitoring competitor activity and competitors' products;

• developing strategies for increasing opportunities to meet and talk to contacts in the
medical and healthcare sector
• staying informed about the activities of health services in a particular area;

• Working with team managers to plan how to approach contacts and creating effective
business plans for making sales in a particular area.

Distribution:
For distribution of the product, mainly pull strategy is practiced.
The product is sold directly to the customer only by the medical stores only with doctor’s
prescription.
For distribution: the customer comes to the medical store and asks about the medicine, the
medical store owner inquires to the stockiest situated near to their medical store by direct
contact or by the phone and the stockiest contacts to the dealer of the company or to the
godown of the company where the stocks are delivered from ware houses in the respective
regions and at there the stocks are delivered directly from the production units.
In this distribution network, cost of the distribution is on company up to the stock reaches to
the stockiest and while in the case of the product reaching from stockiest to the various
medical stores charges do mostly the medical stores pay.

30
MOLECULE USED IN SERVEY
ATORVASTATIN, sold by Pfizer under the trade name Lipitor, is a member of the drug
class known as statins, used for lowering blood cholesterol. It also stabilizes plaque and
prevents strokes through anti-inflammatory and other mechanisms. Like all statins, an
enzyme found in liver tissue that plays a key role in production of cholesterol in the body.

Atorvastatin was first synthesized in 1985 by Bruce Roth while working at Parke-Davis
Warner-Lambert Company (now Pfizer). With 2008 sales of US$12.4 billion, Lipitor was the
top-selling branded pharmaceutical in the world.

• Atorvastatin is a drug used for lowering cholesterol and thereby preventing

cardiovascular disease.
– Inhibition of cholesterol synthesis
– Decrease production of VLDL
– Hepatocytes are able to remove more LDLs from the blood
– Inhibits hepatic HMG CoA reductase
– Decrease plaque cholesterol content
– Decrease inflammation at the plaque site
– Improve abnormal endothelial function
– Enhance the ability of blood vessels to dilate
– Decrease risk of thrombosis

Mechanism of action
As with other statins, atorvastatin is a competitive inhibitor of HMG-CoA reductase. Unlike
most others, however, it is a completely synthetic compound. HMG-CoA reductase catalyzes
the reduction of 3-hydroxy-3-methylglutaryl-coenzyme A (HMG-CoA) to mevalonate, which is
the rate-limiting step in hepatic cholesterol biosynthesis. Inhibition of the enzyme decreases
de novo cholesterol synthesis, increasing expression of low-density lipoprotein receptors
(LDL receptors) on hepatocytes. This increases LDL uptake by the hepatocytes, decreasing
the amount of LDL-cholesterol in the blood. Like other statins, atorvastatin also reduces
blood levels of triglycerides and slightly increases levels of HDL-cholesterol.
In clinical trials, drugs that block cholesterol uptake like ezetimibe combine with and
complement those that block biosynthesis like atorvastatin or simvastatin in lowering
cholesterol or targeting levels of LDL.

Why is this medication prescribed?

Atorvastatin is used along with diet, exercise, and weight-loss to reduce the risk of heart
attack and stroke and to decrease the chance that heart surgery will be needed in people
who have heart disease or who are at risk of developing heart disease. Atorvastatin is also
used to decrease the amount of cholesterol (a fat-like substance) and other fatty substances
in the blood. This will decrease the risk of stroke, heart attack, and other heart diseases
because when there are high levels of cholesterol and other fats in the blood, these
substances may build up along the walls of the blood vessels and decrease or block blood
flow to the heart. Atorvastatin is in a class of medications called HMG-CoA reductase
inhibitors (statins). It works by slowing the production of cholesterol in the body.
What special dietary instructions should I follow?
Eat a low-cholesterol, low-fat diet, which includes cottage cheese, fat-free milk, fish,
vegetables, poultry, and egg whites. Use monounsaturated oils such as olive, peanut, and
canola oils or polyunsaturated oils such as corn, safflower, soy, sunflower, cottonseed, and

31
soybean oils. Avoid foods with excess fat in them such as meat (especially liver and fatty
meat), egg yolks, whole milk, cream, butter, shortening, pastries, cakes, cookies, gravy,
peanut butter, chocolate, olives, potato chips, coconut, cheese (other than cottage cheese),
coconut oil, palm oil, and fried foods.
Avoid drinking large amounts (more than about 1 quart, 1 liter every day) of grapefruit juice
while taking atorvastatin.

What side effects can this medication cause?

Atorvastatin may cause side effects.
• diarrhea
• constipation
• gas
• headache
• joint pain
Some side effects can be serious. The following symptoms are uncommon:
• muscle pain, tenderness, or weakness
• lack of energy
• fever
• chest pain
• nausea
• extreme tiredness
• unusual bleeding or bruising
• loss of appetite
• pain in the upper right part of the stomach
• flu-like symptoms
• yellowing of the skin or eyes
• rash
• hives
• itching
• difficulty breathing or swallowing
• swelling of the face, throat, tongue, lips, eyes, hands, feet, ankles, or lower legs
• hoarseness
Atorvastatin may cause other side effects. Call your doctor if you have any unusual problems
while taking this medication.
What storage conditions are needed for this medicine?
Keep this medication in the container it came in, tightly closed, and out of reach of children.
Store it at room temperature and away from excess heat and moisture (not in the bathroom).
Throw away any medication that is outdated or no longer needed. Talk to your pharmacist
about the proper disposal of your medication.

32
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It may be
understood as a science of studying how research is done scientifically. In it I study the
various steps that are generally adopted by a researcher in studying his research problem
along with the logic behind them. It is necessary for the researcher to know not only the
research methods or techniques but also the methodology.

RESEARCH DESIGN

The following research is Descriptive Research which is based on facts and figures.
This project is done according to the “descriptive research design.”
Design maybe broadly classified into:
- Exploratory research
- Conclusive research

Conclusive research is typically more formal and structured than exploratory research. It is
based on large representative samples and that data obtained are subjected to a
quantitative analysis. The findings from this research are considered to be conclusive in
nature in that they are used as input into marginal decision making.

As the name implies, major objective of “descriptive research” is to describe something

usually market characteristics and time. Descriptive research is pre planned and structured.
It is typically performed on large representative samples. A descriptive design requires a
clear specification of the “who, what, when, where, why and way (the W’s of research).
Descriptive research assumes that the research has much prior knowledge about the
problem solution.

SAMPLING DESIGN:

Type of research: Exploratory Study by a questionnaire survey. (Chemist)

Sample Unit: chemist
Sampling type: Stratified Random Sampling
Sample size: 100 (chemist /retailer)

In this project non-probability sampling is being used. The methods being used is
convenience sampling. Since I have not been given a list of particular chemists that must be
targeted therefore, I am able to target anyone that fits into my different sample populations.

DATA COLLECTION METHOD:

Mainly Primary data was used in my research and a bit of secondary data for understanding
the background of my research.

Primary Data: Two types of primary data, i.e. Questionnaire method and Interview method
was used in the survey. Primary data are generally information gathered or generated by the
researcher for the purpose of the project immediately at hand. These methods are
used with customers to acquire the real information, which is current and effective, and it
helps a lot in the planning and selling.

Secondary Data: Data, documents, records, or specimens that have been collected, are in
existence prior to the beginning of the study. It had information about our product and its
terms and also details about the other competitor companies of our product existing in the

33
same market. This information was extracted from facts and figures already there, from
magazines, internet, Newspaper & journals etc.

DATA ANALYSIS TECHNIQUE:

The data were analyzed through simple cross tabulation and unvaried techniques. Visual
displays of the data were done through pie charts and histograms
Analysis has been done through the following steps.
- Preparing and organizing the raw data.
- Summarizing the data contained in the categories.
- Determining whether significant differences exist between categories.
- Explaining why difference exists.
- Making recommendations.

In the present study data was stored and tabulated in absolute numbers as well as
percentages and presented in bivariate and multivariate data to obtain more meaningful
conclusions.

RESEARCH LIMITATIONS:

Though every effort was put in to make this report authentic in every respect,
there were few uncontrollable factors that might have had their influence on the
final report. The various limiting factors are-:
• The study was mainly conducted in North Delhi. So, the sample size taken for
the analysis may not represent the whole population.
• The retailer some often does not provide actual information required for the project
work.
• Most of the Questionnaire is poorly filled.
• The data could be gathered from secondary source thus any error in the information
would have also got replicated in this report.
• As the data was gathered from the secondary sources, the validity of the data could
not be tested.
• Time constraint was the major limitation faced by the researcher.
• However, every effort is made to ensure that these do not in any way adversely affect
the results of the study and inject an element of objecting in the report.

34
ANALYSIS:
After meeting the chemists, interviewing them, collecting the data and studying the project in
depth following conclusions about the amoxicillin propensity has been made:

1. Type of the business deal in: -

Retail Wholesale Both

Objective: to know the type of business in which the respondent deals, because according to
the demand of the survey, the respondent must be dealing either with retail pharmacy or
retail + wholesale both only. Their responses are shown in the following graph along with the
table.

16

84

retail wholesale both

G1: type of business

2. Which pharmaceutical company comes first at top in your mind in terms of CV drug?

Ranbaxy Cipla

Lupin Dr. Reddy

Objective: - This question was asked with the objective to know which company leads in the
market in terms of sales of cardiovascular drug.

35
 pharma company
60
50
40
30
20
10
0
ranbaxy dr reddy lupin cipla

G2: pharma company in cardiovascular segment

3. Why do you think this company is leading at the moment?

Price Quality

Margin Availability

Object: To know chemist perception towards drug company.

Series 1
80
70
60
50
40
Series 1
30
20
10
0
price quality margin availability

G3: chemist perception towards drug company

4. Which statin molecules are mostly prescribed by the Doctor’s?

Atorvastatin Rosuvastatin

Simvastatin Others

Object: to know which statin is most frequently sold in the market.

36
 Rxs statin molecule

others
15%
Simvastatin
9%
Atorvastatin
44%

Rosuvastatin
32%

G4: type of which statin mostly sold in the market

5. In Delhi which are the most selling Atorvastatin?

STORVAS TONACT

ATOCOR OTHERS ………………………….

Object: to know which atorvastatin brand is most frequently sold in the market

ATORVASTATIN BRAND
40 37
35

30 28

25 22
20
ATORVASTATIN BRAND
15 13

10

0
STORVAS TONACT ATOCOR OTHERS

G5: Atorvastatin brand mostly sold in the market

37
 6. Which Composition (mg) of Atorvastatin is mostly selling?

5 10

20 40

Object: to know which atorvastatin composition is most frequently sold in the market

COMPOSITION OF
ATORVASTATIN

40 MG
8% 5 MG
20 MG 24%
13%

10 MG
55%

G6: types of Atorvastatin composition

7. Which combination of Atorvastatin salt is most frequently sold in the market?

Atorvastatin Atorvastatin + Finofibrate

Atorvastatin + Ezetimibe others

Object: to know which atorvastatin composition is most frequently sold in the market

38
 COMPOSITION OF SALT
70
60
50
40
30
20
10
0 COMPOSITION OF SALT

G7: types of Atorvastatin combination

8. How many strips are selling per week of Atorvastatin?

STORVAS ATOCOR TONACT OTHERS

Objective: The objective of asking this question was to know the approximate average
weekly sale.

AVG SALES PER CHEMIST SHOP (STRIP/WK)

30

25

20

15 AVG SALES PER CHEMIST SHOP

(STRIP/WK)
10

0
STORVAS ATOCOR TONACT OTHERS

G8: Sales of Atorvastatin per shop

39
FINDINGS
In Atorvastatin therapy STORVAS (RANBAXY) captured maximum market share because of
their product quality, followed by TONACT (LUPIN) and ATOCOR (DR REDDY) rest of
market captured by others. From the sales data, CV patients are increase day by day. In
India cardiovascular segment is nearly 14% which was published in reputed journal and
newspaper. In CV segment Atorvastatin play a very vital role, whereas Rosuvastatin gives
tough competition in statin-war.
In Delhi 10 mg Atorvastatin is mostly sold. From this data it is easily analysed that CV
patients taking Atorvastatin when they were dictated as CV risk factor patients. Post MI and
ACS patients also taking Atorvastatin in the form of 40 mg tab.

40
CONCLUSION
There can be various ways through which a business organization can achieve success in
the market, but all those ways can be comprised into as above, then it can be rightly said
that it revolves specifically around three parties or more; the triangular linkages or the
relationship between these three parties (company, customers and competitors) determine
the success and failure of business organization. In the medium to long run, the domestic
pharmaceutical market will be largely driven by the increasing prevalence of chronic
segment. The basis of success in any competitive context can be, at the most, elemental
level commercial success; and commercial success can be derived either from a cost
advantage or a value advantage or ideally from a combination of both. In other words, the
organization with Competitive Advantage tends to be the cost leader in the industry or a
seller of most differentiated products amongst all the players.

If we have to compete with our rivals then we have to make concrete marketing strategy and
follow it strictly. We also have to keep a keen watch on our rival’s strategy and take steps
according to them.

Besides we also have to work on other possible areas of marketing like maintain good
relation with doctors & chemists that can strengthen our sales.

At last the role of supply chain is very prominent in both the phases (in acute as well as in
chronic). But the successes of any pharmaceutical industry; when a company changes its
concentration from “Acute” to “Chronic” therapy market depend on competitiveness of supply
chain. Supply Chain Managers can provide considerable value to their companies by
understanding the customers' delivery requirements. A very powerful tool for understanding
these requirements is account segmentation. A company can use account segmentation to
identify market segments Such as Acute & Chronic therapy market. Which is well positioned
to serve and then organize its product range and even SKU’s and service in a superior way.

41
RECOMMENDATIONS
Pharmaceutical companies are taking care to satisfy the above factor however but a little
extra care & also monitor the feedback provided by its marketing executives then the results
will boost up.

In my view following key factors may be helpful in increasing the sales of a company, these
are:-

• Frequent Doctors’ Visits.

• Maintaining better relations with the doctors.
• Samples & Gifts.
• Availability of products with retailers.
• Company should give more profit to the chemists
• The company should work more on replacement schemes, replacement of expired
medicines.
• Company should keep in mind about cost factor
• Dosage.
• Advertisement in medical journals.
• Quality assurance.
• Before launching a new product company should provide information to the chemists
by arranging get together & Seminars.

42
Annexure
Questionnaire for the Retailers (Chemist and Druggist)

Dear Sir,

As part of our two-year PGDM program at Integrated Academy of Management and

Technology, Ghaziabad. I have undertaken a project work to study “Comparative study of
various brands in Atorvastatin therapy”. I would be grateful if you spare few minutes in
filling up the following questionnaire.

All information provided by you remains completely confidential.

Name of the chemist ______________________________________

Location ____________________________________________

Mob: ……………………………………….

1. Type of the business deal in: -

Retail Wholesale Both

2. Which pharmaceutical company comes first at top in your mind in terms of CV drug?
Ranbaxy Cipla

Lupin Dr. Reddy

3. Why do you think this company is leading at the moment?

Price Quality

Margin Availability

4. Which statin molecules are mostly prescribed by the Doctor’s?

Atorvastatin Rosuvastatin

Simvastatin Others

5. In Delhi which are the most selling Atorvastatin?

STORVAS TONACT

ATOCOR OTHERS ………………………….

6. Which Composition (mg) of Atorvastatin is mostly selling?

5 10
20 40
7. Which combination of Atorvastatin salt is most frequently sold in the market?

Atorvastatin Atorvastatin + Finofibrate

43
 Atorvastatin + Ezetimibe others

8. How many strips are selling per week of Atorvastatin?

STORVAS ATOCOR TONACT OTHERS

44
Bibliography:
Books & Journal:
• KOTHARY, Research methodology,2nd edition,2007
• Naresh K. Malhotra , Introduction to Market Research
• Walker-Mullins-Boyd-Larreche, Marketing strategy, 5th edition, TATA Mcgraw- Hill
• Marketing Research- Cooper and Schindler.
• “Marketing Management”, by Keller Kotler
• Deutsche bank report: India’s pharmaceutical industry on course for globalization.
• Research paper on “Critical Challenges & Issues in Patent Documentation”by
Ashutosh Nigam (Asst Professor, Dept of Management Studies,Vaish College of
Engineering, Rohtak)
• Drugs and Pharmaceuticals: International Pharmaceutical Industry-A Snapshot,Jan
2004, ICRA
• Presention by Jerry A. Rosenblatt, PhD on“Predicting 2008: Global Pharma Market
Forecast” Global Practice Leader, Forecasting & Opportunity Assessment November
14, 2007

Website:
• www.scribd.com
• www.wikipidia.org
• www.ncbi.nlm.nih.gov
• www.mims.com/
• www.medlineindia.com
• www.bharatbook.com/.detail.asp?=44690
• www.news.pharma-mkting.com/
• www.oppi.com
• www.capitaline.com
• www.altavista.com
• www.site.securities.com
• www.pharmainfo.com
• www.etintelligence.com
• www.pharmainfo.net
• www.kpmg.de
• www.info.shine.com
• www.equitymaster.com
• www.expresspharmaonline.com

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