PharmEvo Strategic Report

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PharmEvo Pvt. Ltd - Pharmaceutical

Fall 2012
Strategic Management
Term Report

Submitted by:
Iqbal Lalani-11041
Syed Muhammad Asif-11523
Umair Uz Zubair - 9967

Submitted to: Mr. Amjad Hussain
Institute of Business Management (IoBM)
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LETTER OF ACKNOWLEDGMENT

22
nd
December, 2012

Mr. Amjad Hussain
Course Instructor
Strategic Management
Institute of Business Management (IoBM)

Respected Sir;

As directed by you, a review on PharmEvo, a leading pharmaceutical company of Pakistan. We have
gathered information to present the market details of the pharmaceutical industry in general and that
of PharmEvo in particular, in the light of what we have learned and understood in this Strategic
Management Course.

The experience in this report making is worthwhile and is going to help us in our professional career
with the real working environment, in particular reference to Strategic Management

Regards,

Iqbal Lalani
Syed Muhammad Asif
Umair uz Zubair

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Contents
Executive Summary .................................................................................................................. 5
Business Scope: ............................................................................................................... 5
Business Environment: ..................................................................................................... 5
Market Structure: .............................................................................................................. 5
Market Data of Last 4 Years: ............................................................................................ 5
Key Issues: ....................................................................................................................... 5
Group Introduction .................................................................................................................... 6
Introduction ....................................................................................................................... 6
Premier Group of Companies Corporate Profile ............................................................... 6
Group Companies ............................................................................................................ 6
i. Premier Distributors ....................................................................................................... 6
ii. Premier Agencies .......................................................................................................... 7
iii. PharmEvo (Pvt) Limited ............................................................................................... 7
iv. Zaman Textile .............................................................................................................. 8
v. Shield Corporation ........................................................................................................ 8
Growth Strategy under taken by Premier Group: ...................................................................... 8
Vision ........................................................................................................................................ 9
Mission ...................................................................................................................................... 9
The Business Scope: .............................................................................................................. 11
Regions Where PharmEvo Pvt. Ltd Operates: ........................................................................ 11
Functions / Applications / Products ......................................................................................... 13
Customers and Users ..................................................................................................... 14
Value Added Services: ................................................................................................... 14
The influencers: .............................................................................................................. 14
Pakistan Pharmaceutical industry is involved with the manufacturing of ................................ 14
Trade Off: ................................................................................................................................ 15
Organizational Structure ......................................................................................................... 16
PharmEvo HeadOffice .................................................................................................... 16
PharmEvo factory Organogram .................................................... Error! Bookmark not defined.
Business Environment ............................................................................................................ 19
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Market Structure: .................................................................................................................... 19
Market Size Last 5 Years: ....................................................................................................... 20
Market Size 5 Years in Value (Rs. In Billion ) : ...................................................................... 20
Driving Forces And Trends In The Business / Industry: .......................................................... 24
Market Size Next 4 Years Value: ............................................................................................ 26
Assumptions for Growth: ......................................................................................................... 26
Products Life Cycle: ................................................................................................................ 28
Distribution Structure in the Industry: ...................................................................................... 29
Competition Segment Matrix ................................................................................................... 33
Competition Segment Matrix/Findings .................................................................................... 34
Michael Porter 6 Forces: ......................................................................................................... 35
Pharmaceutical Industry Analysis ........................................................................................... 41
INTERNAL ANALYSIS............................................................................................................ 42
SWOT-Analysis: ..................................................................................................................... 43
Key Issues / Challenges ......................................................................................................... 45
Key Issues ...................................................................................................................... 45
Product Plan ........................................................................................................................... 49
Strategic Direction .................................................................................................................. 57
Operational Plan to address key issues:......................................................................... 57
Communication Plan ............................................................................................................... 58
Conclusion & Future Guidelines ............................................................................................. 63

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Executive Summary

Business Scope:
PharmEvo is in the Healthcare business.Overall the Pharmaceutical industry is worth Rs. 181 Billion
with more than 16% annual growth rate over last year. There are majorly 16 therapeutic segments.
PharmEvo has presence in 10 segments.

Business Environment:
Pharmaceutical industry is worth Rs.181 Billion with more than 650 companies.

Market Structure:
All in all there are 16 segments and new channels like Direct selling to patients is now being followed,
apart from the normal channels. This is done for hepatitis medicines which are delivered to the
patients home, similarly blood pressure monitors are delivered to patients directly through PharmEvo
sales force.

Market Data of Last 4 Years:
Corporation has invested heavily in new products launches the Distribution is changing as there is
growing trend of Direct selling to patients (home delivery for life saving drugs)

Key Issues:
PharmEvo need to improve new products launching speed, strengthen its Respiratory Segment,
increase its production capacity (installation of new plant for liquid injections), Export market
regulation compliance is required, rising Raw material cost due to devaluation of Pakistani Rupees,
delayed products registrations are problems faced by Pharmaceutical industry.

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Group Introduction
Introduction
The introduction comprises of Premier Group and Shield Corporation profile.

Premier Group of Companies Corporate Profile

Premier group is in business of distribution of consumer and pharmaceutical products for over 35
years. The group is mainly in sales and distribution of major local and international brands all over
Pakistan. The group has also shares in English Biscuits (manufacturer of Peek Freans brand) and
National Foods (packaged spices). And also deals in Dental and Baby Care products and manufacturing
and marketing of pharmaceuticals. Groups turnover is over Rs. 10 billion (approx. 167 million US
Dollars).

Group Companies
Premier group has the following companies:
I. Premier Distributors 1971
Distribution of branded food and household products
II. Premier Agencies 1975
Distribution of pharmaceutical and healthcare products, and toiletries
III. Zaman Textile (* Acquired 2002) 1985*
Leading manufacturers of export quality 100% cotton yarn
IV. PharmEvo Pvt. Ltd Sept 1999
Marketing and manufacturing of pharmaceutical products
V. Shield Corporation (* Acquired 2003) 1984*
Leading manufacturers of dental and baby care products with a well- established
brand name, SHIELD

i. Premier Distributors
Premier distributors, is one of the largest sales and distribution house in Pakistan, have started its
operation in 1971. It deals mainly in distribution of branded food and household products among
different countries. Some of its major brands include Cadburys, National Foods (packaged spices),
English Biscuits, Mitchells, etc.
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ii. Premier Agencies
Premier agencies have started its operation in 1975. It deals mainly in the distribution of
pharmaceutical, healthcare products, cereals and toiletries. Some of its major brands include Abbott,
Aventis, Otsuka, Becton Dickinson,
etc

iii. PharmEvo (Pvt) Limited
PharmEvo has started its operation in 1999. It deals in Marketing and manufacturing of
pharmaceutical products. It is one of the fastest growing pharmaceutical companies in Pakistan and in
just 13 years managed to rank at 30th position out of 650 pharmaceutical companies maintaining a
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growth of over 25% annual growth over last year. PharmEvo is known among its doctors community
with ethical and cause oriented marketing. It is also the sole marketers and importers of Becton
Dickinson Insulin syringes and Bausch and Lomb Visual Care (contact lenses and solutions) products.

iv. Zaman Textile
Zaman textile, a leading manufacturer of export quality 100% cotton yarn has started its operation in
1985 and acquired by the group in 2002.Zaman Textile, acquisition is the example of the
Conglomerate Diversification, where the group diversified into a different industry i.e. Textile, with
unrelated products. This was done as the group had the financial resources and it ventured into the
textile industry.

v. Shield Corporation
Shield Corporation, leading manufacturers of dental and baby care products has been in existence
since 1976. It is formerly known as Transpak Corporation Ltd., renamed as Shield Corporation Ltd in
July 2003. It has a strong brand image and can readily transferable to new product category. It acts as
a separate entity and is professionally managed. It also the contract manufacturing for Gillette
Pakistan for their Oral B and Contura lines of brushes. It has over 30% market share in baby care
products (feeders, soothers, nipples, and teethers) within the local market.

Shield Corporation Limited was incorporated in Pakistan on January 10, 1975 as a Public Limited
Company and its shares are listed on the Stock Exchange of Pakistan.
In 1978, it entered into consumer marketing and became a well-known company across Pakistan in a
very short span of time. Shield range of dental care was introduced in 1984, and Shield range of baby
care products was launched in 1987.

Growth Strategy under taken by Premier Group:
Shield Acquisition& establishing its own Pharmaceutical manufacturing company, by the group are
examples of Backward integration, where the group was already distributing Pharmaceutical and
personal care products, hence the group acquired Shield in 2003 and established PharmEvo in 1999.
The premier group annual revenues stand at more than Rs.12Billion.
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Vision

Our dream is to build a healthier society by becoming a leading and socially responsible global
company through innovative solutions.

Mission

Our mission is to be a global organization whose philosophy is characterized by a highly
refined sense of ethics which is expressed tangibly through its dealings while upholding
highest standards of integrity.

An organization that aspires to be a leader in providing quality healthcare solutions and
where patients wellbeing is viewed as the ultimate concern.

Creates differentiation through pioneer ship in cause oriented marketing.
Cares for its employees, recognizes merit through rewards on achievements.

Bears a progressive approach thereby encouraging initiatives, welcoming new ideas and
always ready to move off the beaten track.

Respects the hands that help relief pain and suffering.

Embraces Information Technology as heart of the business and employs leading
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technologies to help achieve defined objectives.

From the desk of M. D. (Message of the M.D. .Giving a
Vision )

Occasionally I have difficulty finding the words to describe the intangible drive that sets PharmEvo
apart from the rest. If I put it mildly, it is the power of dreams that has brought such a phenomenal
success in it's wake. Though our challenges are fearsome so are our strength, a force that help us defy
being lulled into complacency. PharmEvo genetic blue print carries these four Cs as its basic
constituents:

* Competence
* Commitment
* Consistence &
* Compassion

Alongwith an indomitable passion to out-perform our competitors helped us forged PharmEvo into a
soul now viewed as a yard stick against which ethical practices are measured.
We feel proud to serve as a catalyst for integrating the well being of body, mind and spirit as every
passing day keeps strengthening our conviction to stand firmly behind our vision; our dream, a
healthier society.

M. HaroonQassim
Managing Director

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Business Scope
The Business Scope:
PharmEvo is in the Pharmaceuticals &healthcare business, providing essential & quality medicines to
the customers. c

PharmEvo started its operations in 1999 with toll manufacturing*and marketing of medicines. Then
its own plant was operational in 2003 at Port Qasim.

Pakistans Pharmaceutical industry is now worth Rs. 181 Billion and growing with more than
15%growth Rate.

In less than 13 years PharmEvo currently PharmEvo enjoys 30th ranking in the pharmaceutical
industry annual growth rate of more than 25%. Having annual Revenues of more than Rs. 1.61
Billion.

*Toll manufacturing = To do the manufacturing at some other companys plant also known as contract
manufacturing.

Pharmaceutical industry is growing aggressively having broadly 16 segments while PharmEvo is
present in atmost 10 segments.

Regions Where PharmEvo Pvt. Ltd Operates:

1. North Region (Pakhtunkhwa) covering cities like Bannu, Peshawar, TimarGarh, Swat, Mardan,
Kohat

2. Central Region (comprising of Punjab) Bahawalnagar, Multan, Lahore, Islamabad, RawalPindi,
Jehlum, Bhurewala, Bahawalpur, Jhang, Faisalabad, Sialkot, Sahiwal, Layyah, Gujrat, Rahim Yar
Khan, Dera Ismail Khan, Okara, Dera Ghazi Khan.

3. Southern Region (comprising of Sindh and Balochistan) Karachi, Hyderabad, Nawabshah,
Larkana, Sukkur, Mirpurkhas, Quetta etc

4. The sales are mainly focused in Urban areas while Rural areas are not covered very well

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While PharmEvo Export operations are in following Regions of the world:
Asian Region:

Afghanistan SriLanka Vietnam Cambodia Myanmar Philippines

African Region South American Region:

Kenya Guate Mala

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Functions / Applications / Products
All in all there are 16 broad segments which are further segmented to 100+ segments. In the 16 broad
segments PharmEvo has presence in 10 segments
1. Systemic Anti Biotics(for infections treatment) Augmentin, Ampiclox ,Velocef,Evofix, EvoRox,
Evozid

2. Alimentary and Metabolism- (Diabetes, Ulcer )Amarayl, InsuGet, Evopiride, Zoltar, Innogen

3. Cardiovascular- (blood pressure)Tritace,Ramipace, Telsarta, Tansin

4. Blood and Blood Forming- (Anti Clot and Blood forming)Steplex, Lowplat, Lowplat Plus

5. Musculoskeletal- (Pain, Gout)Voltral, Panadol, Disprin, Nise, Anex, Gouric

6. Respiratory System- (Asthma, cough syrups etc)Actified DM, Sancos,Aireez

7. Nervous System- (Depression, Anti Epilepticetc)Epival, Lyrica, Estar, Voxamine, Klevra

8. Anti Neoplastics- (All type of Cancers)Gemzar, Herceptin Oxalitin, Oncotaxel

9. Various (Infant Nutrition & Adult Nutrition etc)Lactogen, Similac, Ensure etc)

10. Diagnostics Agents(Blood PressureMonitors, Fat monitors& blood sugar monitors)Accu-
Check, Omron etc

11. Sensory Organs(Urinary & Sex Hormones) Benesol-N,Polyfax,LidosporinPharmEvo is
absent in this segment

12. Genito Urinary & sex Hormones(Urinary & Sex Hormones) Urixin, Hytrin,
SyntocinonPharmEvo is absent in this segment

13. Systemic Hormones(anti inflammatory& metabolic hormones)Kenacort-A, Betnesol,
ThyroxinePharmEvo is absent in this segment

14. Hospital Solutions(Hospital drip solutions)Hemaccel, Calmin-600, LiposynPharmEvo is

15. Dermatology(Skin infections & Skin preparation)PolyFax, Rigix, StieproxPharmEvo is

16. Parasitology(anti viral, anti protozoal diarrhea, malaria etc) Entamizole, Flagyl,
MospeletcPharmEvo is absent in this segment

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Customers and Users
In Pharmaceuticals according to Drug Law, companies cannot interact / promote medicines to
Customers (patients) directly. So more focus is made to influencers i.e.the doctors while the end users
are the patients. However DTC (Direct to Consumer brands can be advertised and promoted to
consumers directly e.g. Panadol, Sensodyne Tooth Paste, Dentonicetc)

Doctors (influencers)
Hospitals / Institutes
Government (Tenders)
Wholesalers
Retailers

Value Added Services:
i. Innovative molecules for treatment at affordable rates (monoclonal bodies for cancer patients)
e.g. Etanercept by Wyeth (now part of Pfizer Pakistan) for bone problems. etc
ii. Delivering life saving drugs to patient homes e.g. to Hepatitis patients, Kidney failure cases and
to Cancer patients.
iii. Bringing ease of administration, taking of medicine by patients i.e. bringing Palatable (easy to
swallow) and good taste tablets and sachet formulations of different medicines.

The influencers:
The Target audience in Pharmaceuticals is the doctors community WHO are the main influencers of
the medicines, whether it is about medicine sales from retails through doctors prescription or
through institution sales (hospital purchases). PharmEvo targets such influencers to get their business.
It is how, the pharm. Companies get to their or reach their real customers i.e. the patients.

Pakistan Pharmaceutical industry is involved with the manufacturing of

1. Tablets

2. Capsules

3. Caplets (Capsule shaped Tablets)

4. Suspensions

5. Syrups & Suspensions

6. Injection (Dry and liquid injections)

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7. Bandages

8. Prefilled Syringes

9. Aerosols (Inhalers) etc

Trade Off:

PharmEvo is in the Health Care (i.e. diagnosis, treatment and prevention of the disease) business and
following are the tradeoff ) forPharmEvo (which PharmEvo does not offer.

1. Hospital drips
2. Injections.
3. Sutures &Surgicals Instruments.
4. Bandages etc

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Organizational Structure
PharmEvo HeadOffice

GM HR and
Administration
Marketing and
Sales
Director
Medical Affairs
Director Intl
Market &Nutrition
Marketing Manager
Institution, Biotech
Oncology
Marketing
ManagerDivision I
Marketing
ManagerDivisionII
Marketing
ManagerDivisionIII
Business unit
head
Business unit
head
Business unit
head
Business unit
head
Business unit
head
Business unit
head
Business unit
head
Business unit
head
Internal audit
(Outsourced
KPMG)
GM Finance
Senior
Manager
Distribution
and Sales
Support
Manager MIS
Group chairman
Chairman
Managing Director
Director
Business
Development
Chief
Operating
Officer
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Pharmaevo factory
Productio
n
Product
developme
nt
Engineeri
ng
Supply chain Administrati
on
Quality
assuranc
e
Quality
control
Regulator
y affairs
Managing director
Chief operating
officer
Raw
materials
Warehou
se
Export
shipment
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MD of PharmEvo sets the vision of the company and from time to time refreshes the vision and give
his input on strategies and objectives. While the 2 COO (Chief Operating Officers) mainly looks after
head office and Factory matters. While GM Finance, Director Business Development and the 2 COO
reports to the MD. This Year sales goal is set to achieve Rs.3 billion Sales, which is very ambitious, as
last year PharmEvo achieved around Rs.1.91 billion Sales.
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Anti Infectives

Augmentin
Velosef
Evofix
Alimentary &
Metabolism
Risek
Insuget
Zoltar
Nervous
System
Evpival
Citanew
Estar
Respiratory
system
Acefyl
Aireez
Sancos

Cardiovascular
System
Zestril
Tansin
Tritace
Blood & Blood
Forming
Steplex
Lowplat
Ferrum
Various
(nutrition)
Ensure
Lactogen
Similac
Anti Neoplastics
Gemzar
Xeloda
Oxalitin
Parasitology *
Flagyl
Artequine
Mospel
G. U. & Sex
Hormones *
Urixin
Hytrin
Syntocinon
Systemic
Hormones *
Betensol
Kenakort-A
Thyroxine
Sensory Organs *

Betnesol-N
Lidosporin
Polyfax
Hospital
Solutions*
Hemaccel
Calmin-600
Liposyn
Musculoskeletal
Voltral
Feldene
Gouric
Nise
Dermatologicals *
Rigix
PolyFax
Stieprox
Diagnostics
Agent
Accu Check
Omron
Environment Scanning
Business Environment
Market Structure:
1. End user/application segments
2. Product application combinations
3. Distribution structure
*Means PharmEvo is absent in that segment

PharmEvo
Sub
Distributors
Distributors
Retailers

Hospitals /
Institutes
Wholesalers
End Users
Application

Products
Channels
;;;;;;;;;;;;;;
Channels
End Users
Application

Products
End Users
Application

Products
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5 Years Trend of the Industry
Value in Rs.
Avg
Growth of
5 years
2012
share
%
2011
share
%
2010
share
%
2009
share
%
2008
share
%
Total Pharmaceutical Market 181,712,895,131 150,752,445,126 130,905,299,682 112,721,925,825 95,262,532,608 15.28
Segments
1 SYSTEMIC ANTI-INFECTIVES 43,288,189,175 23.82 36,668,547,890 24.32 32,137,256,485 24.55 28,044,589,217 24.88 23,420,722,468 24.59 15.41
2 ALIMENTARY T.& METABOLISM 39,985,456,676 22.00 32,132,964,810 21.32 27,401,531,960 15.08 23,586,179,576 20.92 19,814,277,271 20.80 15.74
3 NERVOUS SYSTEM 16,091,326,379 8.86 13,779,232,363 9.14 12,266,294,975 6.75 10,922,048,638 9.69 9,551,365,602 10.03 11.91
4 MUSCULO-SKELETAL SYSTEM 13,205,647,370 7.27 10,845,890,538 7.19 9,396,855,714 5.17 8,205,750,511 7.28 6,899,031,550 7.24 14.89
5 CARDIOVASCULAR SYSTEM 12,760,457,925 7.02 10,697,382,713 7.10 9,358,152,138 5.15 8,054,854,130 7.15 6,893,120,141 7.24 13.50
6 RESPIRATORY SYSTEM 12,494,368,583 6.88 10,509,291,816 6.97 9,488,639,372 5.22 8,073,935,854 7.16 7,020,206,533 7.37 12.48
7 VARIOUS 10,771,421,558 5.93 8,443,904,494 5.60 6,937,217,569 3.82 4,844,205,704 4.30 4,405,820,846 4.62 25.98
8 BLOOD + B.FORMING ORGANS 6,065,604,891 3.34 5,034,925,729 3.34 4,438,000,802 2.44 3,804,107,410 3.37 3,116,937,106 3.27 17.75
9 DERMATOLOGICALS 5,906,176,195 3.25 4,993,844,702 3.31 4,294,838,527 2.36 3,975,888,958 3.53 3,316,541,261 3.48 14.07
10 PARASITOLOGY 5,606,724,896 3.09 4,548,100,761 3.02 3,630,232,771 2.00 3,001,536,795 2.66 2,525,824,060 2.65 18.44
11 G.U.SYSTEM & SEX HORMONES 5,144,686,254 2.83 4,323,065,695 2.87 3,750,528,635 2.06 3,114,431,362 2.76 2,485,009,582 2.61 16.41
12 ANTINEOPLAST+IMMUNOMODUL 3,561,907,533 1.96 2,987,789,397 1.98 2,771,304,998 1.53 2,579,024,525 2.29 2,022,238,507 2.12 17.00
13 SENSORY ORGANS 3,337,471,880 1.84 2,881,332,931 1.91 2,470,414,221 1.36 2,096,583,532 1.86 1,766,734,275 1.85 17.52
14 HOSPITAL SOLUTIONS 1,675,382,388 0.92 1,399,466,863 0.93 1,257,300,794 0.69 1,148,085,361 1.02 946,163,451 0.99 11.53
15 SYSTEMIC HORMONES 1,653,536,478 0.91 1,349,162,180 0.89 1,185,310,433 0.65 1,120,396,962 0.99 966,097,756 1.01 11.69
16 DIAGNOSTIC AGENTS 164,536,950 0.09 157,542,244 0.10 121,420,288 0.07 150,307,290 0.13 112,442,199 0.12 7.51
Market Size Last 5 Years:
In pharmaceuticals the products price vary per unit a lot e.g. a cardiovascular injection Rapilysinis sold
for Rs. 75,000 per pack while a pack of blood pressure medicine may sell at Rs. 76 for 10s tablet. So it
is insignificant in Pharmaceuticals to compare and analyze the Units (volume) growth. And assess
further. So analysis is done on the basis of Value, which is very important.
Market Size 5 Years in Value (Rs. In Billion ) :

Our Analysis
i. Anti Infectives (Anti biotic) segment has grown to Rs.43 Billion market from Rs. 36 Billion,
this is mainly due to growth in existing brands like Augmentin Worth annual sale of Rs. 3
billion, Velosef annual sale of more than Rs. 1 billion, Amoxil worth Rs. 1 billion etc. The
increased sale in Anti biotic is due to the fact that scarcity of clean drinking water,
unhygienic food, unawareness about health issue and environment pollution are leading to
more and more infections ranging from common cold n cough, to Pneumonia, T.B
(Tuberculosis) etc.
ii. In the Alimentary & Metabolism Segment the growth is seen in the anti ulcerants,
Nutrition Supplements like Cac-1000, Surbex-Z, the Anti Diabetic market with oral anti
Diabetics like Amaryl, Getryl, Sitaglu etc. The rise in anti ulcerants is mainly associated with
depression that results in ulcers, High fats intake, eating of junk foods etc. (all these
causative agents are proven by studies by leading doctors and health professionals)
iii. Nervous System segment has shown a steady growth as its brands like Lamotrigine, Epival
and Citanew have shown steady growth. In the Nervous System the problem lies with the
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Diagnosis of Nervous (psychiatry problems) as mostly the person having this problem do
not refer it to the doctors and even families are unaware of such ailments or do not want
to visit a psychiatrist for such diseases etc.
iv. Respiratory Segment, has shown very minor growth due to the fact that the major
products in Respiratory are the Asthma inhalers that experience a dip in growth due to
supply issues. Earlier the govt banned the use of CFC gas in inhalers, later manufacturers
like GSK and Macter won a govt stay till 2012 for such products after this period no inhaler
should be based on CFC gas which is considered no environment friendly as CFC damages
the Ozone layer. While the overall positive growth is seen due to other respiratory
medicines like Quibron, Acefyl syrup etc.
v. Cardiovasculars segment is experiencing growth, the studies suggest and annual growth of
7-12 % in cardiac arrest cases in Pakistan this is due to unhealthy life style of sleeping too
late and rising too late, eating junk food, smoking etc are adding up to these problems. All
these condition are leading to Cardiac (Heart) disease and blood pressure. And we have
seen a surge in the cardiovascular new products especially in blood pressure drugs like
Amlodipine + Valsartan, Telmisartan etc.
vi. Parasitology Segment(Anti malarial, anti dirrohealetc). uncleaned drinking water is adding
to the diarrhea problem while from late 2007 a surge is observed in Malaria and Dengue
cases. The dengue problem is seen to get severe mostly in late Monsoon season. A rush of
new launches and heavy investment is seen in new products of Artemether + Lumefantrine
combination and Dihydroartemisinin + Piperaquine etc.
vii. Anti Neoplasts (Anti Cancer) Segment is seen to have been growing at a slow pace. The
main reason is that the cancer products sales data is mostly under reported as here mostly
the purchase is done by patiently directly with the distributors that involve at discounted
prices and normally a single cancer treatment involves expenses ranging from Rs. 100,000
to Rs. 700,000 depending on the severity of the disease and in later stage of the disease
the treatment cause may move uptoRs. 2 million or more etc.
viii. Due to constant increase in pollution of air and water borne disease on the rise (WHO).
ix. Un healthy lifestyle. Unhygienic food intake leading to diabetes, cardiac and ulcer.
(Diabetes is growing more than 15% rate, Cardiac stands at 10% while Ulcer cases hover
around 8% rates.
x. Nervous system decline due to psychiatric cases are mostly under reported due to
unawareness (unlike west).
xi. Hospital Solutions segment is seen to grow not aggressively as there are only few
manufacturers that produce these products and the hospital sales / institutional sale data
is not extensively covered, so here the data is under reported but expert evaluation suggest
that around 40% sale of hospital solution is not being reported.
xii. Diagnostics Segment is not experiencing significant growth as there are few players in the
manufacturing of such Blood Pressure monitors, Fat Monitors, Body Mass Index while
people purchase such instruments from local vendors selling unbranded Chinese goods
that are cheaper than the branded instruments like Omron, Accu check etc.

Sales achieved through new Products in the various Segments during the last 4 years:

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Ranking
Rs. Wise
2011

0 TOTAL PHARMA MARKET 153,510,438,005 131,821,319,027 114,280,477,382 96,354,648,200
1 SELECTED TOTAL (LAUNCHES) 14,756,727,618 8,405,552,523 3,599,157,588 420,391,709
1 SYSTEMIC ANTI-INFECTIVES 3,458,776,885 1,961,741,124 810,377,743 83,833,197
2 ALIMENTARY T.& METABOLISM 3,148,327,158 1,588,343,565 570,474,763 53,853,325
3 NERVOUS SYSTEM 1,584,185,203 969,630,254 472,970,179 73,896,441
4 CARDIOVASCULAR SYSTEM 1,047,043,941 541,820,614 201,835,819 21,433,626
5 VARIOUS 1,000,640,754 661,887,265 344,128,048 47,691,887
6 MUSCULO-SKELETAL SYSTEM 970,240,657 560,760,203 253,863,916 16,990,309
7 RESPIRATORY SYSTEM 730,704,897 402,416,660 216,430,442 38,983,650
8 PARASITOLOGY 703,412,592 431,979,271 236,595,363 22,603,247
9 BLOOD + B.FORMING ORGANS 545,554,331 356,996,659 164,115,357 18,762,657
10 G.U.SYSTEM & SEX HORMONES 485,291,660 250,020,420 62,005,390 3,543,566
11 DERMATOLOGICALS 363,157,941 226,969,515 108,359,655 14,778,949
12 ANTINEOPLAST+IMMUNOMODUL 348,523,222 225,337,538 73,586,971 11,600,745
13 SENSORY ORGANS 338,228,566 215,956,354 81,331,881 11,380,488
14 SYSTEMIC HORMONES 31,773,390 10,979,128 1,962,873 769,760
15 HOSPITAL SOLUTIONS 840,578 713,953 1,119,188 269,862
16 DIAGNOSTIC AGENTS 25,843 0 0 0
decline
Growth
Past 4 years launches in the segments
Value in Rs.
2011 2010 2009 2008

Following molecules have been launched in following segments that has added tremendous growth
(in terms of sales to the pharmaceutical companies)
a) Systemic Anti infectives
1. Me too of Augmentin (that is Amoxicillin + Clauvanic Acid) that has added more than 300
Million Rs. In sales to companies
2. Piperacillin + Tazobactum launch by Bosch

b) Musculoskeletal
1. Febuxostat
2. Diclofenac + Misoprostol has added more that Rs. 150 Million sales
3. Ibandronate Sodium More than Rs. 5 Milliion Sale ( a once month tablet for bones, i.e. Rs.
2200 tab of Roche while PharmEvo has launched it at Rs. 385, this is the maximum price
allowed by Ministry Of health to launch this medicine.
`
c) Respiratory
Fluticasone, Beclomethasone launch by other companies.
d) Blood and Blood Forming
1. Prasugrel

e) Alimentary and Metabolism
1. Insulin 70/30 by Getz and Novo Nordisk
2. Peg interferon launch by Roche
3. Cac-1000 a nutrition supplement by Novarits has added Rs. 222 million sales

f) Various Segment
23

1. Launch of Meiji Big by Meiji
2. Lactogen Gold by Nestle etc

g) Psychiatry
Pregabalin molecule was launched in 2007 and companies have so far generated annual sales
of around 80 Million each on this molecule while later Pfizer the innovator of this drug took
companies to the court and since then no further registration and launch of this medicine is
seen.

Strategic Take Home Message for PharmEvo:
PharmEvo has, we must say under perform in the new products launches especially in
segments like Sytemic Anti Infectives, Respiratory, Psychiatry, Cancer (anti Neoplastics) and
Peg interferon.

Mergers and Acquisitions& Investments by MNC (Multi Nationals and National Companies) during
the last 4 years in Pakistan.
1. Over 3 years competition has entered heavily into Parasitology mainly with anti malaria
products.Genixpharma has around Rs.490million sales value in this category with Artemether
+Lumefantrine and Artemisinin + Piperaquin.
2. National companies are aggressively investing in procuring Pegylated interferon, which is
originally a product of Roche with more than Rs 1 Billion market. Ferozsons a National Co. has
invested in the plant of Bio tech to produce this product in Pakistan with license from an
Argentinean company, while Getz has arranged this product from other company of Argentina.
Many companies are also trying to procure this product. This product is in high demand as it is
used in Hepatitis and is superior product that other normal interferons.
3. Getz has procured a 20 acre land and building a new plant for its production.

4. GSK Pakistan has bought the entire stiefel a skin care Co. and in the mean while has also
acquired BMS Pakistan operations entirely.

5. MSD (Merck Sharpe &Dhome) has sold its operation to OBS Pakistan.
6. Parke Davis, Farmacia Upjohn have merged with Pfizer Incorporation both locally and
internationally.
7. Roche globally and in Pakistan retained its cancer & biotech business while divested other
products like Anti biotics and psychiatry segments. In Pakistan these divested segments are
24

purchased by Martin Dow.
8. Astra Zeneca has stopped its plan to enter Pakistan due to law and order and political
conditions while continuing to market product with ICI Pakistan.
9. ICI pharmaceuticals is now owned by Lucky Cement group.
10. A Sitagliptin(a diabetes) drug is launched by OBS under license from MSD while Getz, Hilton
and CCL has also launched its molecule. MSD has filed suit against these companies for patent
violation. The Raw material API is also very expensive at around US $ 3000 / Kg.
11. Nestle is investing more in nutrition products ( infant milk product) and various segments and
companies like Cow & Gate and Meiji are also investing in Pakistan.
12. Danone dairy products has entered in the Pakistan market and have launched infant milk
products, which are primarily prescribed by doctors.
13. AGP (Ali Gohar Pharmaceuticals has sold its pharmaceutical operations to GETZ Pakistan.

What has been done in PharmEvo for the last 4 years:
1. Launched its Biotech division in 2007 and had sales of Rs 50 Millions in Year 1 of this division
launch.
2. In 2008 09 industry launched more than 40 brands while PharmEvo launch 4-5 brands.
3. Invested around 120 million in plant expansion in 2008.
4. In 2010 11 PharmEvo launch around 12 14 products and added revenues of more than 150
million.
5. Planning to invest around Rs. 150 million for liquid injection to strengthen its Anti biotic
segment.
6. Entered in diagnostic segment with Omron (Japan). Omron is having 70% BP monitors share
globally.
7. Launched Celia infant milk formula in 2010 and achieved sales of Rs 25 million in Year 1 of the
launch. IN year 2 Celia brand has achieved sales upto June 2012 with Rs.86million
sales.Wwhileplanning to expand this segment with new brands. Celia is a franchise business for
PharmEvo so its sales are not directly shown in Sales of PharmEvo but as separate one.

Driving Forces And Trends In The Business / Industry:

Machine cost, new customer group, customer usage, product innovation, marketing
innovation, technological change, cost factors etc.

Pharmaceutical Market is dominated by following Forces

1. Technology
Biotech and Oncology Products Plant are expensive to buy and install, so most of the generic
companies are opting for these products via import. These biotech segments have seen an
influx of medicines from Argentina, China, Brazil and India and every second company in
Pakistan want to have these segments in their portfolio.Key technologies and components.
1. Biotech Plants (for Hepatitis, Insulin, Oncology medicines)
25

2. Tablet Manufacturing Plants
3. Cephalosporins Plantsare all expensive and obtained from China, India and Europe.

2. Products Innovation
Product innovations are mainly done by the multinational that contribute globally in the R & D after a
hectic research of 5 to 7 years and in some cases up to 10 years research come up with a new product
for the ailment (disease). The benefit such companies reap in terms of patent protection and earn
hefty profits are earned by them in terms of patent exclusivity that grant them the right to
manufacture and market the product to 17-20 years and no generic or copy molecule is allowed.

3. General profitability margins in the business.
The general profitability margins vary from 30% to around 50%.

4. User appreciations, loyalty.

In medicines the importance of influencers (doctors) is the Key as once a drug is prescribed to a
patient the patient will religious seek to buy and take the medicine regularly till his ailment persists?
Once a brand is purchase very few chance of brand shifting can be seen or the case may be that
doctor changes the medicines otherwise the patient will continue to take this medicine. E.g. blood
pressure and blood sugar medicines.etc.

5. Certifications
PharmEvo is ISO 9001 & 14001 qualified organization, international accreditation and
certification like FDA approval (US), EMEA approval will raise the industry competence and
make it a formidable force in the Pharmaceutical industry worldwide.

26

Market Size Next 4 Years Value:

Assumptions for Growth:

1. New innovative molecules help doctors in treating the diseases these new products ensure,
shorter duration of treatment, effective against diseases, having less side effects and plenty of
studies to support the new drug claims.

2. These above qualities tempt doctors in prescribing the new medicines.

3. Unclean environment will further aggravate the existing infections, skin infections and viral
diseases, so plenty of Growth is seen for Anti Biotics. While more stronger Anti biotics are
being used, especially the combination of Anti biotics use is gaining momentum as the existing
infection bacteria are becoming resistant or immune to current therapies. In short plenty of
growth can be forecasted in this segment.

4. The national companies are more and more spending in their facilities-Capacity building that
will result in new products being introduced.

5. Innovative molecules to be introduced in Pakistan for diseases like Cancer, Heart, Bone areas.

6. Growing opportunities in the international market for export, currently stagnating at US $ 141
Million only (industry)

7. Unhealthy life styles and eating habits are leading to Obesity, Diabetes, Cardiac diseases and
these conditions will prevail in future as well.
2012 2013 2014 2015
TOTAL Pharmaceutical MARKET 173,791,187,552 200,350,825,790 230,969,440,741 266,267,345,523 15.28%
Segments
1 SYSTEMIC ANTI-INFECTIVES 42,272,418,721 48,732,701,112 56,180,276,160 64,766,026,864 15.41%
2 ALIMENTARY T.& METABOLISM 37,043,685,157 42,704,886,341 49,231,260,596 56,755,027,997 15.74%
3 NERVOUS SYSTEM 15,885,043,549 18,312,675,329 21,111,309,936 24,337,645,877 13.91%
4 MUSCULO-SKELETAL SYSTEM 12,503,413,759 14,414,247,967 16,617,105,413 19,156,614,548 14.89%
5 CARDIOVASCULAR SYSTEM 12,332,210,226 14,216,880,254 16,389,574,979 18,894,311,775 13.50%
6 RESPIRATORY SYSTEM 12,115,374,338 13,966,906,421 16,101,398,895 18,562,095,181 12.48%
7 VARIOUS 9,734,344,198 11,221,995,350 12,936,996,790 14,914,093,324 22.98%
8 BLOOD + B.FORMING ORGANS 5,804,388,254 6,691,443,888 7,714,063,801 8,892,965,601 17.74%
9 DERMATOLOGICALS 5,757,029,019 6,636,846,978 7,651,123,118 8,820,406,008 14.07%
10 PARASITOLOGY 5,243,164,260 6,044,450,838 6,968,194,037 8,033,108,291 20.44%
11 G.U.SYSTEM & SEX HORMONES 4,983,738,210 5,745,378,002 6,623,415,395 7,635,638,853 16.41%
12 ANTINEOPLAST+IMMUNOMODUL 3,444,398,312 3,970,788,484 4,577,624,234 5,277,199,657 17.00%
13 SENSORY ORGANS 3,321,672,636 3,829,307,257 4,414,521,138 5,089,170,331 17.52%
14 HOSPITAL SOLUTIONS 1,613,340,386 1,859,899,131 2,144,138,216 2,471,816,138 11.53%
15 SYSTEMIC HORMONES 1,555,347,890 1,793,043,931 2,067,065,870 2,382,965,212 11.69%
16 DIAGNOSTIC AGENTS 181,618,637 209,374,506 241,372,165 278,259,866 7.51%
Value
Avg Projected
Growth
Future 4 Years Trend of the Industry
27

8. PharmEvosYearly sales are expected to grow around 20% to 30% annuallykeeping in mind
PharmEvos past 5 years Sales trend. Whiletoout pace the competition a staggering growth of
around 35-45% annually is required.

9. 12%-16% annually growth of pharmaceutical industry in Pakistan is expected that will be in
2015 around Rs. 266 Billion industry

1. PharmEvo can achieve growth of 35% to 45% provided the following things

2. Aggressive launches in segments like Anti Cancer (with mono clonal anti bodies),
Various (Nutrition), Women and Child Health, Respiratory, Sytemic Anti Infectives,
Respiratory, Psychiatry, Cancer (anti Neoplastics) and Peg interferon.

3. Expanding the base (sales) of their existing products by more penetration in the
peripheries of existing cities, and going into new cities.

4. Speedy registration of molecules and timely launch of molecules will help PharmEvo to
gain leadership position in various therapeutic segments.

28

Products Life Cycle:

i. Telsarta is in growth phase after is launch in late 2010 and earliy 2011
ii. Lowplat is the cash cow product of PharmEvo and now it is in Declining phase
iii. X-plendid is in growing phase and it is moving toward maturity
iv. Aireez is in declining phase and soon it may have to be divested
v. Gouric is in growing phase and it has Xurig as competitor from GETZ

Majority of PharmEvos products are in the maturity phase, (like Tansin, Fasteso, Treatan, EvoRox,
EvoZid, Anexetc, Zoltar, Voxamine,) which needs renewed marketing activities, Close liaison with
Doctors and Chemists (whole salers and Retailers) so these could be revived and turned into Star
products i.e. the growing in sales and in market share.

Product Segments INTRODUCTION GROWTH MATURITY DECLINE
Lowplat
Xplendid
Aireez
Gouric
Evopiride
Limitrol
Evozid
29

Distribution Structure in the Industry:

Goods flows chart of Competition Sanofi Aventis

30

Distribution Structure Shift from 2008 to 2012:

In pharmaceuticals 80% sale is done by the main distributors while 20% sale is achieved through
institution sales.

5-10 % sale is done by Sub distributors, While retailers comprise of 60% sale of the Wholesalers sale.

Distribution Network of PharmEvo:

PharmEvos main distributor is Premier Agencies (The parent company of PharmEvo).

Coverage
PharmEvo has main distributors in around 34 cities of Pakistan that also cater to the nearby cities from
these locations. Like Multan distributor serves to Bhurewala etc.

Sub-distributors
While 5 sub-distributors are appointed for better availability of PharmEvos goods.

To manage the distribution issues professionally PharmEvo has adopted a policy as to treat Premier
Agencies as Distributor only and not treat it as Group companies. As earlier, stock delays, expiry issues,
payment issues were arising due to this.

PharmEvo distributes the general medicines to Chemists and hospitals through Distributors and
subdistiributors while for some institutes like Indus hospital, KIHD (Karachi Institute of Heart Disease,
31

NICVD Karachi, etc, special discount offers are made and stock are directly dispatched to them.)

For Niche products (Oncology, Hepatitis-Intef) PharmEvo offers the doctors and patients a facility, as to
contact PharmEvo sales person and he delivers the medicine at their homes. These medicines require
special storage conditions and temperature management at 2-8 C

ORDERING & INVENTORYMANAGEMENT:
Inventory of all products are maintained to six weeks level at any given time.
Order are send on PharmEvo Order Format and filled order format are send to PharmEvo by 3
rd
of
every month thru email.
Signed and stamped order Format with DD is send on schedule date with Demand Draft.
Order quantity should be as per the carton size.
Stocks against the order are sent within six working days (if order receives to us on schedule date)
Stocks should be checked before acknowledging to the courier service like number of cartons, carton
condition and weight of the shipment. If any breakage, short & less weight of shipment are found
than immediately (within seven working days) inform us thru letter or email.

Sales Data:
Sales data should send on standard format as described by the software company.

Sales Data should receive on daily basis.

We cannot afford a single day delay so after closing the daily sales, compiled data should send to
PharmEvo immediately.
Preceding date data should receive to PharmEvo before 12:00 PM of the running day i.e. data till
14
th
Aug should receive before 12:00 PM of 15
th
Aug.Data received after the dead line should consider
late.
Computer generated sales report should receive be sent to PharmEvo on every 8
th
, 16
th
, 24
th
& 1
st
of
the month.

NEAR EXPIRY INTIMATION :
Near Expiry intimation of market and ware house should be intimated four month prior to the expiry.
Near Expiry intimation should be sent before 15
th
of every month, otherwiseclaimable.
Near Expiry intimation should be properly and completely filled like In the month of July the
intimation of expiry of November is made.

EXPIRED STOCKS CLAIM:
Expired stocks claim are settled for which distributors should send details to PhamrEvo before 10
th
of
every month.
Claim should be in our format.
If Intimated products get expired than you should lift the stock from the market/warehouse and send
to PharmEvo factory and claim to PharmEvo Head Office.
Acknowledge copy (by PharmEvo) of Near Expiry intimation should attach with the claim and expired
32

product should be highlighted in near expiry intimation.
Expired stock should dispatch to our factory and ensure to place filled and complete copy (Batch
Number, Quantity, Expiry Month and etc) of distributor claim.
Short Expiry stocks should only be sending on request.
No old expired stocks would acceptable for us; you should send the claim on monthly basis like July
expired stocks claim should receive to us before 15
th
August.

DISCOUNT CLAIM:
Discount claim should also receive to us before 10
th
of every month.
Discount approval letter and invoice should attach with the claim.
Total discount issued on individual products like discount issued on Evotaxime, Evozid and Evorox
should mentioned/calculated in the summary of discount claims.
If you can provide software generated one or two page report of customer wise discount issued,
invoice number, product detail than no need to attach invoices with discount claim.

SHORT STOCK & BREAKAGE CLAIM:
It should be sending on need.
Courier slip mentioning short stock or breakage/less weight should attach with the claim within 7
days.
Courier acknowledge slip contain Number of Big Carton, Weight of Shipment, Number of small carton
so you are advise to check carefully before giving acknowledgment to the courier company.
Claim should not be settled if courier acknowledged copy will not attach with the claim.

OVER NIGHT DISPATCHES:
If shortages happen due to the mismanagement of inventory by distributor than PharmEvo will make
the overnight dispatches and reduce distributor discount to 5% on particular invoice or product.
Any products short with PharmEvo should dispatch overnight without reduction of discount.
Any boost in sales and result shortages shall also be dispatched overnight without reduction of
discount.

Strategic Take Home for PharmEvo:
PharmEvo sales of anti biotics if needs to be improved, for which special handling of institution is
needed to meet the sales target, the institution business is vital for the anti biotic business as
hospitals are the main source of these medicines.
33

S.
No
Therapeutic Segments
Value
Wise
Share
Growth
GSK
Rs.17.44 B,
11.16%
Abbott Rs.
10.41 B
6.66%
Novartis
Rs. 7.00 B
4.48%
Getz Rs.
6.35 B,
4.07%
Sanofi
Aventis
Rs. 6.25B
4.01%
Sami Rs.
5.77 B,
3.69%
Hilton
Rs. 4.21
B, 2.70%
PharmEvo
Rs. 1.26 B,
0.81%
PharmEvo
Growth
Others
Remaining
Share %
Overall
Share
Profitability
1 Sys Anti Inf Rs. 36.68 Billion 24.32 14.10 49.57 10.47 15.64 23.01 27.07 48.36 10.05 9.10 10.41 54.50 100.00 +
2 Alim & Metab Rs. 32.13 Billion 21.32 17.27 8.33 28.52 28.02 39.86 22.48 14.27 32.86 18.14 24.73 63.72 100.00 +
3 Nerv Sys Rs. 13.77 Billion 9.14 12.33 12.66 6.97 10.35 3.24 1.51 9.13 18.54 5.06 4.60 64.20 100.00 +
4 Muscu Skelet Sys Rs. 10.84 Billion 7.19 15.42 1.09 14.65 16.26 5.38 0.86 17.72 10.76 13.44 48.40 56.30 100.00 +
5 Cardiov Sys Rs.10.69 Billion 7.10 14.31 1.13 0.60 7.17 12.17 7.11 1.09 5.75 25.94 29.91 76.73 100.00 ++
6 Resp System Rs.10.50 Billion 6.97 10.76 8.07 8.33 8.21 8.64 11.78 3.03 8.13 1.56 -16.62 56.40 100.00 +
7 Various Rs. 8.44 Billion 5.60 21.72 0.63 11.40 1.04 - - 0.71 0.06 - - 84.12 100.00 +
8 BLOOD & B.form Rs. 5.03 Billion 3.34 13.45 2.90 3.66 - 0.84 3.59 2.97 8.50 22.40 18.24 62.71 100.00 ++
9 Derma Rs. 4.99 Billion 3.31 16.28 9.43 1.42 0.75 0.00 0.08 0.00 - - - 63.37 100.00 +
11 Parasitology Rs. 4.54 Billion 3.02 25.28 1.05 6.39 0.05 0.65 15.42 2.28 4.04 - - 71.92 100.00 ++
10 G. U & Sex Horm Rs. 4.32 Billion 2.87 15.27 0.23 7.44 3.95 3.16 0.98 0.36 1.36 - - 71.00 100.00 +
12 Anitneop & Immuno Rs. 2.98 Billion 1.98 7.81 0.51 0.13 6.15 3.05 1.51 - - 4.35 36.64 70.30 100.00 +++
13 Sensory Organs Rs. 2.88 Billion 1.91 16.63 3.14 - 1.70 - - - - - - 73.50 100.00 +
14 Hosp Solution Rs. 1.39 Billion 0.93 11.31 - 0.00 - - 7.61 0.06 - - - 66.20 100.00 +
15 Sys Hormones Rs. 1.34 Billion 0.89 13.82 1.26 - 0.70 - - - - - - 81.50 100.00 +
16 Diagnost Agents Rs. 0.15 Billion 0.10 29.75 - 0.00 - - 0.00 - - - - 0.00 100.00 ++
Total Company's Share 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Historical Growth 15.16 12.17 18.04 19.10 28.03 17.27 37.15 22.16 22.15
Projected Growth 16.00 13.00 17.00 20.00 25.00 18.00 32.00 18.00 23.00
IMS Aug 2010-July 2011
Total Pharma
Market
Selected 8 Corporations Therapeutic Segments Share % in terms of Value Vs PharmEvo
Competition Segment Matrix

For clear view of this (above mentioned) Competition Segment Matrix, kindly view this attached
Excel file.

34

PharmEvos Therapeutic Segments:

Competition Segment Matrix/Findings
Systematic Anti-infective is the largest therapeutic segment followed by Alimentary and
Metabolism.
Parasitology and Various (Nutrition) segments are the thriving segments.
Internationally innovative drugs are being launched in cancer segment (Antineoplast and
Immuno.)
In anti-Invectives, companies are engaged in unethical practices and PharmEvo refrain from
such activities resulting in less growth for PharmEvo in this segment. Moreover, PharmEvo
lacks the facility for liquid injections in anti-biotic which is also a hindrance in this segment
expansion.
For broader anti-infective market penetration PharmEvo needs to have a Parentral (liquid
injection) facility. To enter into Penicillin antibiotics manufacturing, a separate area is needed
in the plant.
For cancer products PharmEvo urgently need to have agreements with good cancer medicine
manufacturing companies.
CARDIOVASCULAR
SYSTEM, Rs.453.38
M, 28.02%, +38.48
BLOOD +
B.FORMING
ORGANS, Rs.
342.45 Million
21.17%, +21.11
ALIMENTARY T.&
METABOLISM,
Rs.338.82 M,
20.94%, +47.99
MUSCULO-
SKELETAL SYSTEM,
Rs.227.20 M,
14.04%, +33.84
SYSTEMIC ANTI-
INFECTIVES,
Rs.122 M, 7.54%,
+5.86
NERVOUS
SYSTEM, Rs.0.86
M, 5.36%, +35.71

ANTINEOPLAST+I
MMUNOMODUL,
Rs.41.01 M, 2.54%,
-25.27
RESPIRATORY
SYSTEM, Rs.6.29
M, 0.39%, -68.11
35

To enter in the nutrition segment they need to have franchise agreement with good nutrition
product companies.

Michael Porter 6 Forces:

Bargaining power of Suppliers:

In case of PharmEvo, the supplier does not have high hand in dealing of Raw materials.
Companies including PharmEvo engage Raw material manufacturers from India, China,
Argentina or western countries.

Bargaining power of Buyers:

In this case, the buyers are the patients and institutes and once the patient is suffering from a
disease he or she has to bear the cost of medicine, no matter how costly it is. So in this case
36

the buyers negotiation power is low. While in case of institutes the buyer power is very much
high, and results in great discounts from the manufacturer. Companies, give huge discounts of
30-40% on medicines to large institutes. In case of institutes (hospitals) the buying power is
high

Threat of Substitution:

Threat of substitution is high for PharmEvo products, although they are quality products but
can lose their market share to quality generics products of national companies. E.g. if you look
for an antibiotic Cefixime you can find more than 50 brands available in the market, which
directly compete with your company brands. The company got the edge by engaging the
influencer (Doctor) in writing your brand as prescription.New technologies and/or substitute
products.
The chance of substitution is high in Pharmaceuticals more than 650 companies are there and
in few months time a single molecule can as many as competitors resulting in fierce
competition and eating in profit margins as prices are greatly reduced by new entrants

Threat of New Entrants:

The threat of new Entrants is very high as pharmaceuticals have profit margins as high as 40-
60%, which make this industry highly lucrative for new entrants. The barrier to entry is also
low, as a company can register itself with DRAP (Drug Regulatory Authority of Pakistan) and
can start the marketing of products (Medicines) which registrations the firm or company has
got in its name. The firm can launch these brands by getting them manufactured in other
pharmaceutical manufacturing unit (Toll manufactured or by contract manufacturing). Once
these products have good market, then the individual can buy and install the manufacturing
plant of such medicines. As this is evident by case of PharmEvo, how they started its
operations.

Main entry barriers:

The entry barriers in the Pharma Industry are less that is the main reason why more than 650
pharmaceutical companies are there in Pakistan.

New entrants (their origin and competence base).

For new entrants it is now not at an easy sailing as you have to compete with fierce
competition, establish your name among the influencers (doctors community), win your
customers confidence and gain market share etc.
37

Rivalry among competitors

PharmEvo has high threat potential from existing national and other multi nationals, whose
marketing activities and cheaper products of national companies pose a serious threat to its
business. There are a lot of companies competing with each other. There is no clear restriction
from DRAP in giving registration to no. of companies. E.g. we can find no. of companies
manufacturing and selling molecules like Paracetamol, Diclofenac, Glimepiride etc. However,
few Multinationals have restricted local companies in launching and making these new
molecules which are protected through patent restrictions. E.g. Pegylated Interferon etc,
though few companies have launched this molecule also, but day by day patents are being
used frequently by MNCs to stop competition to launch their research molecule as generic. In
US, Europe, prior to patent expiry no other firm can manufacture and market the same
molecule. This gives an edge to the research company to milk their brand. Recently Pfizer
Atrovastatin (Lipitor), went off patent hence Pfizer fears for Revenue loss in billions of US$ in
sales to generics.

Relative Power of other stake holders:
PharmEvo is owned by private owner, hence it has no pressure from shareholders, the
company is part of the family business of Premier Group, while the government regulations
impact the company, while there are no Trade unions in PharmEvo.

38

Bargaining power and structure of the buyers (key players in the distribution?)
The distribution plays a vital link between the manufacturers and retailers/ whole salers. It is
very significant for Cold chain maintenance products and life saving products.
MARKET STRUCTURE, DATA & TRENDS

Sales structure of PharmEvo:
Have around 730 Medical Sales representative all over Pakistan
Having 113 Area Managers
Sales Managers 29, Total Sales force of 850 person

Head Office Staff:70
Factory Staff: 200

Marketing Department Structure of PharmEvo

Chief Operating Officer to whom, Director Medical Affairs, Director International Markets & Nutrition
Division, MIS Head, GM HR & Administration & 4 marketing Managers report

Marketing Manager Division 1 (Cardio Vascular Division)
Marketing Manager Division 2 (Anti Diabetics, Neuropsychiatry, Anti-Obesity)
Marketing Manager Division 3 (Bio Tech, Injectableetc)
Marketing Manager Division 4 (Oncology, Institution Sales)

To a marketing Manager at least 2 Business Unit Managers report

To a business Unit manager 3 Product Mangers / Assistant Product Managers report.

39

PHARM EVO GETZ PHARMA GSK
SANOFI-
AVENTIS
HILTON NOVARTIS
1
Growth of Rural
Markets & Focus of
Companies on this
area
Increasing
Competition
+= increase penetration
in rural areas with low
price & good quality
medicines
++ + + ++ +
2
Price fixed by
Ministry since 2000
Margin / Sales
Pressure
+ = due to price fixation
by Ministry & Increase
inflation the margin &
sale pressure has
increased
+ ++ ++ ++ ++
3
Application
Segmentation
Customization
+++ = Entering in many
segments
like(Pharmaceutical,
diagnostics, Milk
product etc)
+++ + + +++ +
4
Premium Product
Growth
Opportunity
++= Pharmevo launches
new molecules before
ant other company, it
can charge premium
price
++ +++ +++ ++ +++
5
World wide (instant)
communication
influence on sales &
margin
+ = PharmEvo is
present in only 8
countries, so it has low
International
communication as
compared to
MNC,which also
reflects its low Sales &
less margins
+ +++ +++ + +++
6
Untapped Market in
Health-care
Opportunity
++++ = PharmEvo is the
first company in
Pakistan to introduce
complete healtrelated
products to the
consumers, starting
from Prevention to
Treatment
+++ + + +++ +
7
Change in
Environment
Legislation
Decentralization of
Ministry affairs-
Threat
- = All the products
under registration is
on hold due to
change in ministry
policy & has
negatively impacted
the companies due to
which they are
unable to launch new
molecules
_ _ _ _ _
8
Foreign Loans / Lack
of Budget
Sales down in Govt
Sector
+++= it has put
companies on fire, due
to lack of budget
companies cant sale on
credit, rather they ask
for cash
+++ ++ ++ +++ ++
TOP 10 External Trends
TREND POTENTIAL IMPACT
TAKING ADVANTAGE
40

For the details of the 10 External Trends

Relative Importance of Factors

Pakistan Total Multi Nationals Operating in Pakistan

Actually Bristol Myers Squibb and
Stiefel Pakistan have been taken over
by GSK Pakistan, so now all in All 24
multinationals corporations exist in
Pakistan.

Disease wise segments share in
terms of Sales
These includes Cardiovascular, Anti
Diabetic, Anti Osteoporotic, Anti
Cancer, Respiratory (Cough, Flu,
Asthma Products) and other life
saving products that includes Anti
Biotics, Anti T.B drugs and others. In
ABSOLUTELY CRUCIAL V. IMPORTANT QUITE IMPORTANT NICE TO HAVE NOT SIGNIFICANT DON'T WANT IT
5 4 3 2 1 0
1 Parenteral Area (Liquid Injection) to strengthen
anti biotic segment
P
2 Ethical Marketing to influencers P
3 Online BMS (Building Management System) for
production of medicines
P
4 Expansion in International Marketing P
5 Diagnostic and Nutrition Division P
6 Good relation with hospitals / institutions P
7 Good printed products P
PHARM EVO's RELATIVE IMPORTANT FACTORS
FACTOR NAME
44%
56%
MNCs and National
Companies Share % in terms
of Value
Mulitnationals
Companies
National Companies
41

0.000
50.000
100.000
150.000
200.000
2008 2009 2010 2011 2012
105.000
123.130
140.330
151.000
181.000
Industry Sales in Billion Rs.
2008
2009
2010
2011
2012
broader category Pharmaceuticals are divided into following segments

1. Systemic Anti Infectives (comprising of Antibiotics: Penicllins, Cephalosporins,
Macrolide etc)
2. Anti Alimentary (Anti Diabetics, Anti Ulcerant, Laxatives, Vitamins etc)
3. Parasitology (Anti Malarials, Anti helminthes, Anti Protozoans etc)
4. Dermatology (Medications related to Skin)
5. Musculoskeletal (Muscle relaxants, Pain relievers etc)
6. Cardiovasculars (Anti Hypertensives (Blood Pressure), Cardio protectivesetc
7. Blood and Blood forming Agents (Anti thrombotics (anti blood clotting), blood forming
etc)
8. Hospital Solutions (drips and other solutions)
9. Anti Neoplastic (Anti cancer medications)
10. Systemic Harmones (Growth Hormones,
11. Gentio Urinary and Sex Hormones
12. Medical Devices (Blood pressure, blood sugar, body mass monitors etc)
13. Neuropsychiatry (mediations of Epilepsy, Alzheimer, depression etc)
14. Sensory Organs (Ear, Nose medications)
15. Various (nutrition products, infant milk products, energy drinks etc)
16. Respiratory System (Asthma, Cough, Flu, Anti Allergicsetc)
Pharmaceutical Industry Analysis
Pakistan Pharmaceutical Industry is one of the leading industries of Pakistan. It comprises of 24
Multinationals corporations and more than 650 national corporations. The total Pharmaceutical
industry of Pakistan is worth over Rs. 181.6 Billion (annual sales), with annual growth of more than
15.5%.While it export medicines worth Billion of Rs. to countries like Afghanistan, Philippines,
Malaysia, Vietnam, Sri Lanka, Cambodia, Uzbekistan, Myanmar, Tajikistan etc. MNC represent 44%
market share of the industry in term of values while 56% of the market is represented by National
Companies.

42

Pakistan Pharmaceutical Industry
INTERNAL ANALYSIS
Key Indicators of How Well the Strategy Is Working for PharmEvo:

1. Trend in sales and market share:
The sales trend of PharmEvo is growing, giving an encouraging sign of Growth that is averagely
around 25% over the last 3 years, growing from Rs. 670 Million company to Now Rs. 1.61
Billion company

2. Acquiring and/or retaining customers:
According to the sales collection data company of Pharmaceuticals in Pakistan the IMS Health,
among the national companies PharmEvo

3. Trend in profit margins:
The profit margins are shrinking due rising cost and Rupee devaluation and rise of US $,
making the imported raw materials costlier.

4. Overall financial strength and credit ranking:
PharmEvo is financially viable and all the expansion in the plant like in 2008 of Rs. 120 million
was pumped by its own profits and new expansion is planned in 1-2 Years of about Rs. 140-150
Million. Adding new plant for liquid injection in the PharmEvofacility, that will open a new
formulation segment for them to do business and add more good products in their portfolio.

5. Efforts at continuous improvement activities:

Continuous improvement of processes, easing the working and removing extra barriers are the
hall marks. Adding New product development plan PMA Pre Marketing Analysis, that involves
a thorough understanding of the product for its selection, Registraiton, development and
launch.

6. Trend in stock price and stockholder value:
PharmEvo is not enlisted in The stock exchange, while its image is growing with respect to
time.

7. Image and reputation with customers:
The image of PharmEvo is improving with the Customers, rather we should say the influencers.
PharmEvo is engaging with doctors with Ethical marketing practices, i.e. cause oriented
marketing.

8. Leadership role(s) Technology, quality, innovation, e-commerce, etc:
43

Lowplat, X-Plendid and Orslim are the brand leaders in the Anti Platelet, Cholestrol lowering
agent and anti obesity categories.

SWOT-Analysis:
Threats

1. Multinationals entering into the Generic business
2. DRA formation New Registration (details on page no. 52)
3. Immense Marketing Competition
4. Inflation and Price Ceilings etc. (details on page no. 52)
5. Rivalry among competitions
6. International standard qualification (details on page no. 53)
7. CTD format (explained on page no. 52-53)

Opportunities

1. Ample gaps are there to launch products in ever expanding Women & Child Health, Nutrition,
Cancer(oncology)
2. New avenues for launches and plenty of room for new launches.(Strong Pipeline of products
few registered and many near registration)
3. Export market of Far East, CIS region, and regulated markets can be won by (CTD) compliance
(details on page no. 52-53)

Strengths

1. Skilled Field Force
2. Diversified and Strong Pipeline for future launches
3. Good Reputation among influencers and establishing its brand image in the heart and minds of
its Customers.
4. Motivated Team, with the confidence of Winning and doing the Clock Building
5. Strong Distribution Network, as premier Agencies is the parent Company.

Weaknesses

1. Not been able to convert most of the brands among top 5 in their respective categories
2. Products Accessibility is not as extensive as compared to Getz, Sami and Hilton products
availability.

44

OPPORTUNITIES THREATS
O1 O2 O3 O4 T1 T2 T3 T4
S
T
R
E
N
G
T
H
S
S1 5 5 3
S2 5 3
S3 4 4
S4 3
W
E
A
K
N
E
S
S
E
SW1 4 4
W2 5 2
W3 5 3
W4
Confrontation Matrix

Companys price and cost competitive?: This is covered in the pricing section on Pg no. 51

45

Key Issues / Challenges
Key Issues
Developing the worry list of strategic challenges concerning:

What Strategic Issues Company Face

1. To combat the product innovation of rivals (Getz, GSK, Sami, Hilton):
Timely registration of products, development and launch is the key in Pharmaceuticals to launch the
products and compete with the rivals. In Pharmaceuticals the speed in new launches that give an edge
to companies to gain premium price on products

Win new customers (influencers) with new drugs, adding to the high end patient base of doctors.

These are of utmost importance to PharmEvo to cater to these problems.
.

2. Reducing the cost of Production.
In pharmaceuticals the most costly items are the Raw Materials and the packaging, to reduce the cost
Supply Chain needs to be trained in procuring the best quality material at very competitive rates.

To reduce the waste of resources, material, time, fuel, electricity and labour are the key in cost
reduction.

To decrease the bureaucracy in the processes and ease the steps are the requirement that PharmEvo
need to look at.

3. Sustaining the companys present rate of growth or grow the business at a faster rate?

Close liaison with Doctors engaging them with CME (continued medical Education), New studies and
updates regarding drugs and their treatment in reference to PharmEvos products so that it serves as
reminder to the influencer regarding prescribing of PharmEvos Products.

4. To gain better market visibility for the companys product?

CSR activities (corporate Social responsible activities) like awareness walks regarding disease e.g.
about hear attack and prevention, fatness (obesity) etc, Talk shows will create noise among the
doctors community, while in order to gain market share, more and more close relationship is to be
maintained with doctors to get along with the products promotion and increase market share.

5. How to capture the e-commerce & technology opportunities:
The ERP and SAP are the softwares that are revolutionizing the Human Resource & Supply chain. As
companies like GETZ, GSK are employing these softwares that result in better management of Human
46

Resources, avoiding of shortages of products and better management of Raw materials for the
production.

6. Unethical Marketing practices: There are few companies in Pakistan who bribe doctors to
prescribe their products and in doing so, such doctors indiscriminately prescribe medicines to
patients. This holds threat to PharmEvo as it become difficult to tackle such wrong strategies and
some doctors start prescribing medicines of those companies.

Impact on PharmEvo: All these are critical to PharmEvos growth locally and for its Export, while
we have proposed the solution for these key issues as follows.

7. Economic climate; growth, currencies, inflation, investment levels, taxes.
The recession in Pakistani economy is impacting the Pharmaceutical business as more inflation is
being witnessed, eating away the profit margins

8. Imposition on Sales Tax / Sales Tax
In medicines companies pay the sales tax to the government but they cannot charge this extra sales
tax from patient or consumers as the drug law does not permit the companies. The prices in Pakistan
are fixed and centrally controlled by Ministry of Health Price Advisory Committee. Under the new
setup of DRAP, price fixing mechanism and body to fix the price is yet to be announced.

9. Pharmaceutical Sector Sales tax raised from 16% to 17%: This has adversely impacted on the
pharmaceutical industry as other industrial sectors pass on this impact to their consumers by
raising their products prices. Whereas in pharmaceuticals there is no such provision to put this
impact on to consumers (patients). In Pharmaceuticals when products are registered by the
ministry of health each product is given a sealing price, which is the capping or the maximum price
a company can sell at this price and not beyond that and on most of the product the ministry of
health has not raised the prices since 2001.

10. Income Tax on import of Finished Goods has been increased from 4% to 5%. (This will eat away
profits on imported medicines like for insulins, Hepatitis& cancer drugs for the pharmaceutical
companies). Turnover tax increased from 0.5% to 1%

11. 5% withholding tax is levied on Air tickets. In Pharmaceuticals Air Traveling is extensive, in order
to monitor the sales force and marketing activities being carried out. This is additional burden on
their revenues.

12. 10% Tax Credit will be given on BMR (Balancing, Modernization and Replacement): This is
applicable on machinery and plants etc and will motivate people to make repairs of their plants
and machinery. (This is beneficial for the industry)

13. Patents:
Patent laws are becoming stringent and stringent and it is becoming increasingly difficult for Generic
47

companies like PharmEvo and other national companies to launch new products e.g. recent litigation
between multinational and national companies on Sitagliptin
In Pakistan Patent regime has been quite weak, but recently we have seen that multinationals have
tightened the Patent regime for local companies and sued many companies e.g.

1. Sitaglitpin (MSD Merchk Sharpe &Dhomeis the innovator) filed cases against many Pakistani
companies

2. Gemcitabine (Eli Lilly)

3. Vildagliptin (Novartis)

4. Valsartan (Novartis) etc

14. Pricing:
The ministry of health, price advisory committee is not allowing pharmaceutical companies to
increase the prices of products that were registered 15-20 years back or 10 years back, resulting in
financial stringent conditions for the entrepreneurs.

15. Rupee Devaluation against the US $. In pharmaceuticals most of the raw materials are
purchased from abroad and weakening Rupee against the US $ is eating the profit margins and
increasing the Cost of Goods Sold.

16. The biggest expense in the Pharmaceutical company is the cost of goods sold, then the Selling
and General Expenses is the 2
nd
largest cost.

17. Governmental regulations (national/international)

18. Products Registration (Delays):
To launch a product, a company needs to register a product with MOH (Ministry of Health) Pakistan.
Currently more than 70000 products are registered in Pakistan. Without prior registration of drug
(medicines one cannot launch a pharmaceutical product).

To register a product, product is applied to MOH, which in current days is taking almost 12-14
months in registering a new product and give you a go ahead to launch the product. While normal
products Registration period is from 4-6 months which is not the case currently

If you launch a product without their registration, a companys manufacturing license can be cancelled
for good.

19. The 18
th
Amendment in the constitution
The 18
th
amendment in Pakistans constitution has devolved the Ministry of Health to Province that
resulted the federal Ministry of Health (MOH) to devolve. This will result in no control of medicines
48

registration and export in Pakistan and even every province might be registering the same medicines
separately while earlier only MOH registration was enough to market the medicine in Entire Pakistan.

20. DRA Formation
Now DRA is formed, that is Drug Registration Authority which will work Centrally in Pakistan to control
the medicine s registration, export and import and assigning the retail price matters.

21. CTD Format
For Export PharmEvo and the entire pharma Companies need to update their drugs documents, which
include expensive equipment to furnish the detailed quality data of products and stability studies that
are too extensive. To sustain in the global Arena pharma companies need to Comply for CTD, a dossier
format necessary for products registration abroad. Even countries like Tanzania and Kenya have
adopted CTD guidelines.

To meet the challenges posed by global competition in Registration and Product launches (Export):

Without CTD compliance and FDA approval, Pakistani companies will not be able to export and
such export will cease to exist and this hold true for PharmEvo as well.

To comply with CTD guidelines for Product Registration to be able for export to the world. To
be compliant with FDA (Food and Drug Administration of USA), EMEA, (European Medicine
Agency Approval) quality standards, and extensive documents are needed which none of the
pharmaceutical company in Pakistan qualifies for, this include the MNCs as well. Even the top
ranking MNCs in Pakistan like Pfizer, GSK, Abbott cannot export their medicines to US, Canada,
UK etc due to non compliance and lack of documentation and standard in conformities.

The above is the main reason Pak Pharmaceutical export are limited to Far East countries
(Philippines, Laos, Vietnam, Myanmar, Cambodia), SriLanka, Afghanistan, CIS countries, African
countries, South America.

Providing quality medicines to the patients at reduced prices globally as internationally
companies from China & India put forth fierce pressure this make it difficult in Export.

22. FDA & EMEA approvals:
In the Pharmaceutical world FDA (Federal Drug Administration) of US and the EMEA (European
Medicines Evalution Agency) are the most respected authorities that evaluate global companies for
granting them certification and registration approval that pave the way for those countries companies
to start exporting medicine to Europe and US accordingly.

China has more than 20 FDA approved plants India has more than 15 FDA approved facilities like Dr.
Reddys, Cipla, Ranbaxy etc, Bangla Desh has 4 FDA approved plant. Pakistan has none FDA or EMEA
approvals, even the MNCs in Pakistan do not qualify the quality and safety standards of these
49

agencies.

23. Environmental concern.
EHS Environment Health & safety are also very important and this also needs diligence on part of the
companies to comply with the environment standards set by the regulators.

24. Installed industrial capacities (surplus/shortages) in the business)
Pakistan faces shortages in the Oncology medicines (cancer medicines) that are being imported from
abroad while the tablet, capsule and syrups are widely produced in Pakistan.

Product Plan
Pricing Strategy
PharmEvo products prices are comparable to Hilton and Getz and in few instances it is lower
than the competitors

PharmEvo brand leader Lowplat was a me-too of MNC brand, which price was Rs.140per tab,
PharmEvo launched it at Rs. 14 per tab, competitive trial were done by engaging leading
doctors of cardiologists that ensured that their product is a quality product. Now the brand is
worth more than Rs. 250 million with 14% annual growth.

Increase Prices

Implications for PharmEvo:Prices of Products are at a standstill since 2001, as Ministry of
Health has not allowed companies to increase their prices, special cases are considered which
are termed as HARDSHIP cases but that corresponds to very few molecules.

4 problems are there for PharmEvo Regarding Prices

a. This is due to the fact, that Ministry of Health grants products registration to companies
e.g. Drug A is registered at Rs. 100 for pack of 10s tabs. But companies launch it at Rs.
80 or 90 per pack. So they have price cushion to increase maximum to Rs. 100 and
beyond that they cannot raise prices on their own without prior Ministry of Health
Price advisory Committee approval. And for most of the medicines prices are at stand
still and is cause of concern for companies in days of High Inflation and rising cost of
Fuel, Energy, Materials, Labors ETC which is eating away the profits.

b. By interacting with Cost manager of PharmEvo, we came to know that the highest Cost
factor is the materials, packaging cost.

c. The Government of Pakistan collects Sales tax from companies and in particular
50

Pharmaceuticals cannot pass on the Sales tax burden to consumers as they do not have
such price raising flexibility on their own with regard to other business sectors like
FMCG, Cement, Sugar, Engineering Goods Etc.

d. Rupee devaluation against US $, (as most of the materials is imported in
Pharmaceuticals) it is decreasing the profits. To counter this impact the Cost
Department at PharmEvo , refers to the State Bank of Pakistan Website for future
exchange rate of US $ against rupee for the next 1 year. This helps them to have margin
of inflation in their annual budget and keep expenses within their own control. The
entire Pharmaceutical import of raw materials and Finished goods are done in US$. The
Rupee in last 5 years has lost its value against major international currencies and in
2007 Rs.61 were equivalent to 1 US$, now Rs.98 are equivalent to 1 US$. This adversely
effect the profit margins of the companies, as they have to absorb this price impact.

Zyloric: (A GSK Product)

It is the only treatment available for Gout patients and this drug falls in the
category of essential medicines. By virtue of this essential medicine status,
GSK is obliged to manufacture and market such medicine. It is registered
since1976 and is available as follows:

Zyloric 100mg in pack size of 50s tabs Retail Price Rs. 70.20
Zyloric 300mg in pack size of 30s tabs Retail Price Rs. 120.98

Issues with Zyloric:

The Government has ceased the prices of Pharmaceuticals since 2000 and the raise we see in prices is
not as per the inflation companies are facing. In such scenario Zyloric is not profitable for GSK to
manufacture and market, the more they manufacture the more loss GSK has to incur. But as
mentioned earlier, Zyloric is one of the essential medicines, which compels GSK to keep manufacturing
this product.
It is most of the time short from the market and gout patients suffer a lot due to it. This has created a
gap for pharmaceutical companies and identifying the gap of supply of this molecule, PharmEvo has
launched Febuxostat molecule-brand name GOURIC and is doing very well.

PharmEvo Launches FEBUXOSTAT Gouric:
So there was a GAP of demand and supply, a novel molecule PharmEvo launched in this segment i.e.
FEBUXOSTAT, GOURIC which is priced at around Rs. 25 per tab and is growing very well in 12 months
from its launch has done a business of 30 Million Pak Rs.

51

PharmEvos Products Price Comparision with Competitors products. Per Tablet or Per capsule price/
per injection price

S. No Molecules Segments / Uses PharmEvo Hilton Getz Others
1 Telmisartan 20mg Caridovascular/ Blood pressure 11.00 12.50 12.14
Telmisartan 40mg 20.00 19.50 21.43
Telmisartan 80mg 30.00 29.75 32.00
2 Telmisartan 40mg + HCTZ Caridovascular/ Blood pressure 21.00 19.71 22.14
Telmisartan 80mg + HCTZ 31.00 29.75 33.00
3 Rosuvastatin 5mg Caridovascular/ Cholestrol Lowering 12.00 10.70 12.00
Rosuvastatin 10mg 20.00 19.00 20.00
Rosuvastatin 20mg 32.00 32.50 33.00
4 Paclitaxel 30mg Antineoplast/ Cancer 3500.00 - - 5300.00 GSK
5 Febuxostat 40mg Musculoskeletal / Anti Gout 16.50 - 16.50
Febuxostat 80mg 29.25 - 29.25
6 Escitalopram 5mg Nervous System / Gout 8.50 11.57
Escitalopram 10mg 14.50 16.43 14.95
Escitalopram 20mg 23.00 27.50
7 Cefixime 100mg susp 30ml Anti Infectives / Anti Biotic 115.00 145.00 125.00
Cefixime 400mg Cap 47.00 63.00 59.00
Cefixime 200mg DS Dry Susp Cap 170.00 230.00 209.00
Cefixime 100mg susp 60ml 150.00 230.00 -
Cefixime 200mg Cap - 27.50 20.00
8 Interferon Alpha 2B 3000MU Anti Infectives / Hepatitis 610.00 - 700.00
Interferon Alpha 2B 5000MU 1020.00 - 1316.00
9 Peg interferon Anti Infectives / Hepatitis - - 8165.00
10 Clopidogrel 75mg Blood Blood Forming/ Anti Platelet 14.00 - - 120.00 Sanofi Aventis
11 Clopidogrel 75mg + Aspirin 75mg 14.50 - -
Clopidogrel 75mg + Aspirin 150mg 15.00 - -
12 Glimepiride 1mg Alimentary & Metab / Anti Diabetic 3.00 - 4.10 8.07 Sanofi Aventis
Glimepiride 2mg 5.60 - 7.15 16.02
Glimepiride 3mg 8.75 - 9.90 24.02
Glimepiride 4mg 11.75 - 11.75 32.03
13 Omeprazole 20mg Cap Alimentary & Metab / Anti Ulcerant 12.00 - 12.85 10.29 Sanofi Aventis
Omeprazole 40mg Cap - - 18.50 -
Omeprazole 40mg IV 240.00 - 260.00 -
14 Montelukast 4mg Chew tab Respiratory / Asthma management 12.00 13.57 12.00
Montelukast 5mg Chew tab 15.00 20.50 16.00
Montelukast 4mg Sachet 12.00 16.07 13.00
Montelukast 10mg Tab 18.00 22.36 18.00
52

PharmEvo Products Details

Therapeutic
Categories
Generic Brand Name
Allergy / Asthma Montelukast sodium

Cetirizine HCL

Cardiovascular Enalapril

Losartan pottasium +
Hydrochlorothiazide

Simvastatin

Clopidogrel

Ramipril

Losartan potassium

Losartan potassium

Candesartan Cilexetil

Rosuvastatin Calcium

Dentistry Naproxen sodium

53

Diabetes Glimepiride

Gastroenterology Esomeprazole

Omeprazole

Infectious Diseases Cefpodoxime

Cefixime

Cefuroxime axetil&
Cefuroxime for Inj.

Cefotaxime sodium

Ceftazidime

Roxithromycin

Levofloxacin

Osteoporosis Alfacalcidol

Alendronate sodium

Pain & Inflammation Nimesulide

Celecoxib

54

Psychiatry Sertraline HCI

Fluvoxamine maleate

Brand Name Generic Pack Size

Enalapril 5 & 10mg 10's/20's

Saccharomyces Boulardii 250mg 10's each

Montelukast sodium 4, 5 & 10mg 14's/30's/30's

Naproxen sodium 275 & 550mg 30's each

Alfacalcidol 0.25, 0.5 & 1mcg 10's each

Alendronate sodium 10mg & 70mg 10's

Cetirizine HCL 10mg 10's/60ml

Medicated Toothbrushes 1's

Losartan pottasium 50mg + Hydrochlorothiazide 12.5mg 10's

Topiramate 25mg & 50mg 60's

Escitalopram 5, 10, & 20mg 10's each
55

Cefpodoxime 100mg/40mg per 5ml 10's/50ml

Cefixime 400mg/100mg/5ml 10's/60ml

Glimepiride 1,2,3 & 4mg 20's each

Cefuroxime axetil 125,250mg & Cefuroxime 250, 750 (Inj.) 10's10's/1's/ 1's

Cefotaxime sodium 250mg/500mg/1g 1's each

Ceftazidime 250mg/500mg/1g 1's each

Esomeprazole 20 & 40mg 14's each

Iron Polymaltose Complex + Folic Acid 60ml, 100mg 1's/10's each

Sertraline HCI 50 & 100mg 30's/20's

Gabapentin 200mg, 400mg , 600mg 10's each

QuetiapineFumarate 25mg, 100mg 10's each

Simvastatin 10 & 20mg 10's/5's

Simvastatin + Ezetimibe 10mg+10mg & 20+10mg 7's

Clopidogrel 75mg 10's

Clopidogrel + Asprin 10's
56

Nimesulide 100mg 20's

Orlistat 120mg 30's

Roxithromycin 100, 150 & 300mg 10's/10's/5's

Ramipril 1.25, 2.5, 5 & 10mg 10's/10's/28's /28's

Celecoxib 100 & 200mg 10's each

Medicated Toothbrushes 1's

Levofloxacin 250 & 500mg 10's each

Iron ProtienSuccinylate 60ml, 120ml 1's each

Losartan potassium 50mg 10's

Losartan Potassium 100mg 10's

Candesartan Cilexetil 4, 8, 16mg 14's/14's/28's

Candesartan + Hydrochorothiazide 14's

Fluvoxamine maleate 50 & 100mg 10's each

Rosuvastatin Calcium 5, 10 & 20mg 10's

Omeprazole 20mg 14's

57

Strategic Direction
Operational Plan to address key issues:
To address the key issues highlighted earlier in the report, proposed operational plan sets out the
clear strategic direction for PharmEvo.

1. New product Development / R & D:
A pure R & D in true sense in Pakistan is absent as R & D of new molecules take minimum of
Rs. 2-4 billion of Rs. Investment, which might not always result in success.

2. While for the new launches the international molecules are being identified evaluated by their
Business Development Department through PMA (Pre Marketing Analysis document). After
the selection, products are being applied for registration and plenty of new products are being
developed with safety studies to launch the product in time once the registration is obtained.

3. To launch a product a minimum of 6 month (accelerated) stability studies are required, that
ensure that the product after its manufacture will retain its shape, color, efficacy during the
next 2 years. This the quality test for the formulations.

4. Add more production capacity:
Expansion of Rs. 120 Million is done at PharmEvo facility in 2008 while a new plant for liquid
injection is being installed for Rs. 140-150 Million in 2012-2013.

5. Cut prices in response to the action of competitors:
PharmEvo has cut prices in the Respiratory product Aireez to match the competitors marketing
as done in response to their price reduction. In general prices are not lowered for most of the
medicines.

6. Add new features that will boost the performance of companys product:
PharmEvo has come along with patient compliant medicines like Prefilled syringe products for
its Hepatitis products like Inteferon. That reduces the chance of wrong dosage as the medicine
is already filled in the injection and the patient just has to inject it in his/ her body.

7. Go forward with investments in foreign markets:
CIS states (Uzbekistan, Ukraine, Tajikistanetc), Far East Asian & South American region
countries are being evaluated for Export.

58

Communication Plan

Marketing and Management Strategies implied so far
To sustain in the business world companies need growth in their revenues and reduce their costs,
following ways are adapted by PharmEvo

Differentiation and image building:PharmEvo came up with the launch of existing selling brands at
competitive prices.

Launched innovative molecules at low prices like Rosuvastatin, Clopidogrel, Sitagliptin, Prasugreletc.
To win the hear of the customers PharmEvo

Being a new organization from its birth in 1999, a pharmaceutical company has to face a lot of
challenges especially the one to win the confidence of the influencers and its customers (the institutes
and patients). The PharmEvo Team had a BHAG (Big Hairy Audacious Goal to be among Top 10
Companies in Pakistan in 10 years time.

In about 13 years time, PharmEvo is among top 19 National Pharmaceutical companies and overall
stood at 30
th
position in National and Multinationals rankings.

To win the confidence utmost importance and Zero Tolerance policy on Quality was adopted, which is
still in force.

All Good Manufacturing Practices are adopted for manufacturing of Medicines.

Prune Away Marginal Activities

Implications for PharmEvo: PharmEvohasfrom time to time divested products like Zemitra,
Teganorm, Epik, etcthis is done as these products were hardly meeting their break even and
company has simply discontinued them.

Out Source some or All procedures
Implications for PharmEvo: In this regard, PharmEvo has all manufacturing &packaging of
products are done at PharmEvos own facilities, so outsourcing is not true for PharmEvos.

Creating Blue Ocean:
The launch of INTEF, interferon in PharmEvo was about creating Blue Ocean in this particular segment.
Prior to PharmEvo few companies have launched Interferon injection (A Hepatitis Drug) and were
doing a very good business. At that point of time, PharmEvo launched INTEF a prefilled syringe at low
price than the available brands. Those brands were only vials and patient had to buy separate syringes
for injecting this drug, also increasing chances of improper dosing and chances of contamination.
PharmEvosINTEF avoided this problem of Dosing and to buy separate syringe with prefilled syringe at
59

prices competitive to vials.
This was a major force behind this products success in a year it achieved sales of Rs. 50 Million.

Retaining Staff:
Employee Retention is one area that gives stability to the organization.

Training:
To ensure corporate growth PharmEvo understands the need to Training and Professional
development of its employees. For this purpose a full fledge Training Manager is hired, while the
Executives are send to external trainings as well. Recently an MBTI assessment was also conducted for
the entire PharmEvo head office colleagues to let them know, how they can be successful in managing
their lives with a little effort.

Hiring Young Team:
It is very peculiar for PharmEvo, in the Pharmaceutical industry the average age of a business manager
is around 32 years old while in the industry it is around 40-44years. Similarly the entire PharmEvo
work force is quite young, that ensures one thing that there is no scarcity of energy and it is only
channelized to get the desired results.

Promoting Internal Employees first:
In case of any growth (senior position) internal employee is considered to fill the space and mostly
promotions are made from within the company that adds to stability of the company and also ensure
the steady Growth pace of the company.

Values of the Company:
PharmEvo is known in the industry with its Ethical marketing practices and cause oriented marketing
activities. Promoting literature among the various circles of the society, is PharmEvos hallmark.
Various, programs on literature, poets, poetry, scientific advancements are arranged by PharmEvo.
PharmEvo also launches the annual calendar which is based on some theme. This year calendar 2013
theme is JAMAL E-Hikmat o Danish KaAinaHaiKitab.

60

Cause oriented marketing & Corporate Social Responsibility activities conducted by PharmEvo.
Targetingthe influencer

VI. As a pioneer of cause oriented marketing in the Pakistani pharmaceutical industry,
PharmEvo (Pvt.) Ltd has been instrumental in changing the landscape of pharmaceutical
marketing practices. Today PharmEvo has earned a matchless reputation among their
customers and community at large through their unique marketing philosophy i.e.
differentiates with a cause. A number of feats have been accomplished to date and become
examples for others to follow. These projects made PharmEvo stand out in the crowd and
have opened new vistas in pharmaceutical marketing arena of Pakistan.

1. PharmEvo is actively engaged in sponsoring bright students e.g. PharmEvo extends
scholarships to promising medical students who want to do the fellowship (FCPS) in Pakistan.
Besides PharmEvo also have examples where it sponsored the entire degree course (MBBS) for
students.

Impact:
Making available good and skilled human resource to the society to serve them that would have
otherwise ruined if financial help would not be available.(Establishing good relations with
Influencers)

2. On similar pattern, seminars on diseases and their current treatment are held from time to
time. One such event held in Sri Lanka 2010 and one in Cambodia.

3. PharmEvo chose to provide education and trainings to doctors community to benefit the
society in a larger context rather than rewarding them personally.

Impact:
PharmEvo is relentlessly working to make a paradigm shift in marketing practices of Pakistani
Pharmaceutical Industry, where dignity of Massihas could be restored and patients didnt have to pay
for unnecessary medications on prescriptions.

4. Learning Resource Centers (LRC) and information kiosks at major hospitals in Pakistan like
DUHS(KHI), NICVD, Indus hospital, KIHD, ShaikhZaid, DHQ (Faisalabad) ,King Edward(Lahore)
etc. LRCs are provided with computer systems by PharmEvo to train the faculty members and
junior doctors on basic computer skills (Microsoft office).

61

5. Regular research methodology and SPSS workshops (so far 14 hosted) thus circa 280 doctors
have been trained on how to conduct their research work and bringing our doctors at par with
global standards when it comes to gaining cutting edge information.

6. PharmEvo weekly inspirational quote on front page of DAWN.

Friday DAWN regularly carries an inspirational quote and there are reasons to believe that it impresses
a positive mark on the minds of reader and helped in improving their lives.

62

7. Supporting philanthropic institutions (e.g. Indus Hospital) in providing best possible care to the
patients. PharmEvo assistance has literally made Indus a paperless facility which has enhanced
its efficiency.

8. Built children playing area at different hospitals that provides a good source for social and
emotional development of the young generation.

Other Cause Oriented Marketing Activities

9. PharmEvo calendars have gained a unique positioning in the pharma industry and amazes
everybody that how calendars can be used as an effective tool to educate people. Our
calendars are not merely aesthetic day reminders but also attract spotlights as an extremely
powerful memorandum that constantly stir up an incessant desire to question and evaluate
our way of life. Since its inception, 1999 PharmEvo has brought out twelve calendars, all
carrying powerful messages e.g. Rise and Fall of Nations (in the light of Quran),Quran the
ultimate miracle,Qitadat&Hukumrani etc.

Moreover PharmEvo published corporate books (so far twenty four) e.g. Zafran-e-zar, Golden words
(vol.1 & 2),Dewane-Ghalib 3)Muslim scientists etc.

Impact:
Inculcate the reading habit at its core as well as re-establishing acquaintance between our forgotten
values/culture and masses to improve our confidence and self-image as a nation.

10. Hosted career guidance programs for Pharmacy students, for which a permanent facility, has
been established at Karachi University, Faculty of Pharmacy.

Impact:

Proper guidance to the youth holds the key in redefining nations landscape and PharmEvo is at the
heart of it.

11. PharmEvo also routinely engages itself in thought provoking programs like evenings with
famous personalities especially from Urdu literature, for example, several evenings with
renowned poet, Ahmed Faraz ,Mushtaq Ahmed Yousufi, AnwerMaqsood and Amjad Islam
Amjad etc.

Arranged in 2009

Impact;
Historically literature has great impact on human minds. It helps the society to develop depth in their
thoughts and also create a positive energy in them. In nutshell, such programs pay great dividends in
relieving stress and improving interpersonal skills of the participants that can go a long way in
enhancing the quality of life in any society.

63

Conclusion & Future Guidelines
A bright future awaits PharmEvo, a staggering growth of 35-40% can be achieved by following
ways.Key elements of PharmEvos Success in future will depend on the followings:
Improving relations with the Doctors (influencers)
Improving products penetration (availability) to the peripheries of the city.
Improving Field Force working (by strict vigilance from Marketing, Sales managers & giving
proper training to the Staff and Field Force)
Launching of new products with good speed.
Winning new customers with the new launches and strengthening of relations with the existing
customers by giving doctors choice of new treatment to their patients with the novel drugs
launched.
Adding liquid injection facility and adding these formulations in their product portfolio.
Adding products in Child Health, Nutrition and Women Health
Launching of New Monoclonal bodies with good companies collaboration in Pakistan.
Reducing the cost with good management of Supply Chain
Optimizing the production out put with the exisiting resources
Upgrading of their quality process for Export like preparing for CTD, FDA and World Health
organization (WHO) qualification.
Ethical Marketing Cause Oriented Marketing (strengthening existing relationship with
customers by continued marketing activities.

Name PharmEvo Pvt. Ltd
Business Pharmaceuticals and Health Car Business
Owned by Premier Group. PharmEvo was Established in Sep 1999
Annual Sales
Revenue
Rs. 1.61 Billion (upto July 2012 figures)
Listings on
Stock
It is not a public listed company.
Employees Over1,000 Employees
Field Force 800-850Field Force (Sales Persons)
Regions Mostly the urban areas and very less presence in Rural
areas.
Market Share 0.9% of total market share
Head Office Address:402 Business Avenue, Block-6 P. E.C. H. S
Shahrah-e-Faisal Karachi-75400, Pakistan
Phone: +92 21 34315195
Fax: +92 21 34556344
Factory Address:A-29, North Western Industrial Zone, Port Qasim
Karachi-75020
Phone: +92 21 34720158-64
Fax: +92 21 344720161
64

Reference: www.pharmevo.biz

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