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The pharmaceutical industry, which includes the development, production and marketing of
pharmaceutical products, is characterized by its large size, growth, globalization and significant
investment in research and development. The global pharmaceutical industry is driven by a
continuing need for medicines for the treatment of disease, demographic shifts that strengthen
this underlying demand and improved healthcare infrastructures that are providing people with
greater access to medicines. According to IMS, sales in the global pharmaceutical industry
exceeded U.S.$750.0 billion in 2009 (Source: IMS Health – MIDAS dataset 2009.) with a
flattened growth rate primarily due to lower growth rates in well established markets such as the
U.S. and Europe. The global pharmaceutical industry has historically been dominated by the
U.S., European and Japanese markets. In 2009, the U.S. market was the largest market
accounting for sales of U.S.$301.0 billion (Source: IMS Health – MIDAS dataset 2009.).
However, it is now believed that China, India, Brazil and Russia are very attractive nations for
growth in the pharmaceutical industry. These markets offer a high growth potential due to their
rising GDPs, expanding access to healthcare, improving intellectual property and regulatory
environments.
BPL operates its business through extensive departmentalization as needed for specified effectiveness
of the tasks. The business activities of BPL are directed, controlled and monitored from the head office
of Beximco Pharmaceuticals Ltd. Being a leading Pharmaceutical company in the country it employs a
good number of people in different departments to keeps its business thriving. The following major
departments coordinate the activities of BPL:
● Planning department
● Procurement Department
● Sales department
● Training department
● MIS department
● Multimedia department
Accounts & Finance Department The activities of the Accounts and finance department are carried over
by talented and adequate person. The functions of Accounts and Finance department are carried over
five sections. Actually proper control purpose, they subdivide their functions to the several sections. The
sections of Accounts and Finance department are as follows:
• Treasury
The major function of this section is to prepare financial report. They prepare the financial report of
Beximco Pharma. There is a manager to monitoring the activities of this section. The major activities of
these sections are as follows:
Sales Department
Sales department is a marketing execution department. It supplies sales forecast to the planning
department. The activities and function of Sales department is very important. The profit of the
company is dependent on the sales. Sales department assigns selling responsibility to the Medical
Representative.
Low manufacturing cost and quality standards
India’s cost of production of these medicines is one third than that from
USA and almost half of that of Europe due to availability of skilled
workforce, scientists, engineers as well as developed technology. Indian
pharmaceutical industry has a strong manufacturing base of over 20,000
manufacturing units, which makes it highly favorable for producing
pharmaceutical products at a very affordable price as compared to its
Western counterparts.
India has emerged as a strong base for conducting clinical trials in recent
times. Due to the multitude of advantages like large patient base and low
cost base, the country is growing as a center for conducting clinical trials
for many MNCs. It is estimated that patient recruitment for clinical trials
in India results in 60% time savings as compared to the USA.
Strengths
India enjoys the advantage of low cost & high skill in process development.
The cost of research in India is much lower than compared to any other nation.
There is high potential for the generics in the use and European markets. And the governments
worldwide showed a bullish trend in their national health care budgets.
Many pharma companies have increased their expenditures on R & D. These companies are alembic
Shawn chemicals, Ind. swift laboratories and J. B. Chemicals.
Over and above the R & D up gradation the Indian companies have gone for high profile acquisitions
and marketing tie ups. Examples are zydus Cadillac 24 acquisitions of French generic drug manufacturer
Al Pharma and its acquisition of German Remedies Torrent is also seeking for acquisition in the U. S.
Market.
There has been a trend of Indian pharma companies to acquire brands from MNCs.
The entry strategy of Indian pharma companies who are planning to set shop in Europe will be through
acquisition rout which will help companies to start with a readymade marketing infrastructure and
certain market share.
Zydus Cadillac acquisition of Al pharma France, the French affiliate of one of the world’s largest genetic
companies will also help the pharma sector to serve the entire European market.
Weaknesses
Though India accounts for 1/6th of world’s population it accounts only 1.6% of the world’s values of
pharmaceutical consumption.
Price control and changes in drug policies adversely affect the pharma sector.
Research and Development expenses are on higher side and small companies do not afford it.
Moreover, it is a continuous process requiring huge expenses and time consuming too.
Research institutions are very few and there is lack of coordination with pharma industry.
Industry size is very small and not viable for large investments.
The basic and petrochemical industries which are the main supplier of raw material for pharma
industry do not give adequate support to the industry.
The customers are mainly diverted by the doctors and drug choice is with the doctors.
Price sensitive customers are opting to purchase substitute from the market.
Threats
Many drugs will be going off patent by the year 2005 and the Indian companies can take advantage of
the situation.
Only 30% of the population has access to modern medicines. There is vast scope to acquire more
customers in the market. 25
Possibility of export of drugs and pharmaceuticals is more as these are identified as thrust areas of
export by the Government of India.
India’s market share is less than 1% in terms of value in the global market. Indian pharma companies
can pay its attention to increase its exports.
Indian companies can emerge as major bulk drug suppliers to the world.
Multinational companies are eager to enter the Indian markets through joint ventures and Indian
companies can avail its benefit.
Pharma products are mainly used to save life. Indian companies can produce quality lifesaving drugs
and can get good market and reputation.
Technology is fast changing and becomes obsolete and hence pharma products are subject to change.
Different custom tariff increases the cost of indigenously produced bulk drugs and sometimes its cost
is higher than the imported bulk drug.
Exports of bulk drugs are subject to many changes in the international market.
The labour and others costs in china are so low that it can become serious threat to the industry.
The commutative approach of multinational companies at global level can affect the Indian companies.
Materials Management
Successful materials management requires the development of a highly integrated and coordinated
system involves
• Sales Forecasting,
• Purchasing,
• Receiving,
• Storage,
• Production,
• Shipping,
These materials are the direct material for the product. The classification of materials is as follows:
• Raw material.
• Packing material. Before going to the report part, let’s have a look that what are the steps are
involved in case of purchasing raw and packing materials from local and abroad. Both types of materials
are purchased in two forms such as:
• Local purchase.
• Import of materials.
The domestic purchase of raw material and Packing Material include following business functions;
When the purchase department got the requisition, it calls for quotation or tender. After receiving the
quotation or tender, supplier has been selected. The supplier may be local or international. If the terms
and conditions are in favor of both IPL and the selected supplier, the purchase order is issued by the
factory
Another source of raw and packing material is importing from overseas market. For this purpose,
purchase department must open a letter of credit at bank. It ensures the liquidity of foreign supplier.
After opening a letter of credit, Purchase department maintains a file where all the related documents
are kept separately for each LC and sends a copy of each document to the Finance and Accounts
department for further processing of information and to prepare the cost sheet for the materials
received against each LC. This file is called PC (pharmaceutical consignment) file. Three departments are
involved in the entire materials procurement process. They carry their own responsibilities in this
regard. The departments are:
• Sales Department
• Procurement Department
the last 6 years. This is based solely on the information published by the Insurance Regulatory &
Development Authority of India (IRDAI) and is measured on consistently used bases. You may
use this information as a key parameter in your term insurance purchase decision.
2011-12 91%
2012-13 83%
2013-14 88%
2014-15 95%
2015-16 88%
2016-17 95%