Current Scenario of Global and Indian Pharmaceutical Marketing and Management

 

Darekar A. B.1 , Zope Janhavi S.1 , Saudagar R. B.2

1Department of  Pharmaceutics , R. G. Sapkal College of Pharmacy , Anjaneri , Nashik-422213, Maharashtra, India.

2Department of  Pharmaceutical Chemistry , R. G. Sapkal College of Pharmacy , Anjaneri , Nashik-422213 , Maharashtra , India.

*Corresponding Author E-mail: janhaviz7777@gmail.com

 

ABSTRACT:

The world pharmaceutical industry has been changing profoundly in the last decade . Intensive globalization , increased competitiveness and the fight for global market shares create new challenges for pharmaceutical companies. Fast globalization definitively reinforces the consolidation of the world Pharmaceutical industry . The current shift in the marketing strategy is work by multinational Pharmaceutical Companies. It is now High – end development that is being carried out by leading companies. And, increasingly, other companies are finding themselves competing against, or working with, new innovation – based companies. My study focuses on objectives, importance, levels, theories, functions and types of pharmaceutical management and also pharmaceutical marketing, difference between general marketing and pharmaceutical marketing. Also study the overlook on Global Pharma Industry and Indian Pharma Industry. In this study the top 50 companies in 2009 and 2014 year are listed out. Also OTC segments and Pharmaceutical Policy are included in this article.

 

KEYWORDS: Objectives, Importance, Functions, Difference between general marketing and pharmaceutical marketing , Top 50 companies in 2009 and 2014 , OTC , Pharmaceutical Policy .

 


 

INTRODUCTION:

Management is a process of conducting and coordinating various human activities. It is a method of optimizing results with minimum efforts so as to secure maximum efficiency and growth for both, the employer and the employee . Management is a subject which comes  under the preview of both science and art. It can be called a science because it proves, defines, measures and uses knowledge. It is an art because it communicates, expresses, describes and practices. Peter Drucker defined  that “Management is a multipurpose organ that manage a business, manages managers and manages workers and work’’.

 

Also George Terry define “Management is a process of planning, organizing, actuating and controlling performance to determine and accomplish the objectives by the use of people and resource”.  While marketing of pharmaceuticals or fine chemicals and raw materials related to the production of medicines is known as Pharmaceutical Marketing. It is the sum of all the business activities that are related to the flow of pharmaceutical goods and services from the pharmaceutical manufacturer to the ultimate consumer or the patient.

 

Pharmaceutical Management:[1,2,5]

Management is utilization of all available resources to the maximum in attaining all the objectives of the organization and the individual goals as well.

 

Objectives of Pharmaceutical Management:

1)   Achieve product realization

2)   Effective control over variables

3)   Continuous improvement

 

Importance of Pharmaceutical Management:

1)   It determines the objectives of a firm

2)   It helps in achieving the stated objectives

3)   It helps in organizational development

4)   It helps in optimum utilization of resources

5)   Progress and development of an organization or country depends on careful planning and management of various issues .

 

Levels of Pharmaceutical Management:

1)   Top Level Pharmaceutical Management

2)   Middle Level Pharmaceutical Management

3)   Lower Level Pharmaceutical Management

 

Theories of Pharmaceutical Management

 

 

 

Fig. 1 Theories of Pharmaceutical Management

 

Functions of Pharmaceutical Management

 

 

Fig. 2 Functions of Pharmaceutical Management

 

Types of Pharmaceutical Management:

 

Fig. 3 Types of Pharmaceutical Management

 

 

Pharmaceutical Marketing[1,3,4,6,7]

Marketing of pharmaceuticals or fine chemicals and raw materials related to the production of medicines is known as Pharmaceutical Marketing . It is the sum of all the business activities that are related to the flow of pharmaceutical goods and services from the pharmaceutical manufacturer to the ultimate consumer , the patient .

 

Objectives of Pharmaceutical Marketing:

1)   To provide guiding policies for marketing of drugs and pharmaceuticals .

2)   To study the problems associated with the marketing of drug and pharmaceuticals and to suggest solutions .

3)   To enable successful distribution of drugs , pharmaceuticals and medicinal products .

4)   To analyze the shortcomings in the existing pattern of pharmaceutical marketing.

 

Importance of Pharmaceutical Marketing

1)   Drugs and pharmaceuticals are required by rich and poor alike for removing diseases and disabilities .

2)   Drugs are should be available at a cheaper rate and accessible to everyone .

3)   Pharmaceutical marketing is a potential force that commands high significance for the country as a whole .

 

 


Functions of Pharmaceutical Marketing

 

Fig. 4 Functions of Pharmaceutical Marketing

 

Process of Pharmaceutical Marketing

 

 

Fig. 5 Process of Pharmaceutical Marketing

 

Difference between General Marketing and Pharmaceutical Marketing[1]

 

Table. 1 Difference between general marketing and pharmaceutical marketing

General Marketing

Pharmaceutical Marketing

1. Consumer is the ultimate decision maker

1 . The doctor or physician is the decision maker .

2. No control of Government on quality of items .

2 . The quality of medicines is stringently controlled by the Government .

3. Audio visual media is used for advertising the products .

3 . Advertising of drugs and medicines is strictly prohibited by Law .

4. General Marketing strategies are used .

4 . It is usually done by personal approach .

5. General Marketing sales personnel do not require special and qualified people .

5 . Only science and pharmacy graduates are utilized as representatives .

6.No shelf-life and no expiry date for general goods .

6 . Shelf-life and expiry date is fixed and legal control over the issue .

7 . Obsolescence is very fast .

7 . No such obsolescence .

8 . Prescription is not required for purchasing consumer goods .

8 . A prescription from a qualified physician is mandatory for purchase of medicines .

9.Consumer has several options and choices .

9 . Consumer does not have a choice .

10. License are not mandatory except for sales license .

10 . Licenses are required for distribution and selling of drugs .

 


Global Pharma Industry – An Overlook[1,2,4,6]

The global Pharma industry is currently undergoing significant transformation . The Pharmaceutical manufacturing is dominated by around 12 majors who have multinational presence and  multi  billion dollar turnover . Traditionally , manufacturing was concentrated in US and Europe .however over the last 15 years or so , with the surge of globalization and dilution of cross country trade barriers , the manufacturing activity is spreading to developing countries which offer many economic advantages .

 

 

 

Fig. 6 Classification of Pharmaceutical Industry

 

 

Fig. 7 Global Pharmaceutical Sales by Region, 2009

 

 

Fig. 8 Global Pharmaceutical Sales by Region, 2012

 

 

Fig. 9 Global Pharmaceutical Sales by Region, 2015

Table. 2 Top 50 Global Pharmaceutical Companies

Rank

Company Name In 2009

Company Name In 2014

1

Pfizer

Novartis

2

GlaxoSmithkline

Pfizer

3

Sanofi-Aventis

Roche

4

Novartis

Sanofi-Aventis

5

AstraZeneca

Merck

6

Johnson & Johnson

Johnson & Johnson

7

Merck

GlaxoSmithkline

8

Roche

AstraZeneca

9

Eli Lilly

Gilead Sciences

10

AbbVie

AbbVie

11

Bristol-Myers Squibb

Amgen

12

Abbott

Teva

13

Bayer

Bayer

14

Amgen

Eli Lilly

15

Meda

Novo Nordisk

16

Boehringer Ingelheim

Boehringer Ingelheim

17

Takeda

Takeda

18

Teva

Bristol-Myers Squibb

19

Kyowa Hakko Kirin

Actavis

20

Astellas

Astellas Pharma

21

Daiichi Sankyo

Baxter International

22

Novo Nordisk

Biogen Idec

23

Merck KGaA

Merck KGaA

24

Eisai

Mylan

25

Otsuka

Daiichi Sankyo

26

Baxter International

Celgene

27

Servier

Otsuka Holdings

28

Gilead Sciences

Allergan

29

Mylan

Les Laboratoires Servier

30

UCB

Shire

31

Genzyme

Abbott Laboratories

32

Shionogi

Sun Pharmaceutical Industries

33

Ratiopharm Ulm

Valeant Pharmaceuticals International

34

Mitsubishi Tanbe

CSL

35

Chugai

Eisai

36

Allergan

UCB

37

Forest

Fresenius

38

CSL

Chugai

39

Apotex

Menarini

40

Nycomed

Grifols

41

Menarini

Aspen Pharmacare

42

Biogen Idec

Hospira

43

Shire

Sumitomo Dainippon Pharma

44

Alcon

Mitsubishi Tanabe Pharma

45

Lundbeck

STADA Arzneimittel

46

Celgene

Mallinckrodt

47

Cephalon

Endo International

48

Hospira

Alexion Pharmaceuticals

49

Watson

Lundbeck

50

Actavis

Kyowa Hakko Kirin

 

Indian Pharmaceutical Industry – An Overlook[1,2,4,6]

The Indian Pharmaceutical Sector makes a valuable contribution to the economic and social life of our country . Globally, the Indian Pharma Industry ranks 4th in volume and 13th in value terms . It is currently on a high growth trajectory and rapidly integrating with the global industry . This integration is opening up tremendous new opportunities for Indian Pharma across all segments including generics , research and development of New Chemical Entities (NCE) & New Biological Entities (NBE) and Contract Research and Manufacturing Services (CRAMS) . Indian companies are now well positioned to explore these opportunities as they adopt effective and efficient business models that are spread across one or more of each of these segments .

 

SWOT Analysis:

Key Strength Areas:

1)    Cost competitiveness .

2)    Well developed industry with strong manufacturing base .

3)    Well established R and D infrastructure .

4)    Third largest English speaking scientific and technical manpower in the world .

5)    Strong marketing and distribution network .

6)    Rich biodiversity .

7)    Competencies in chemistry and process development.

8)    No. Of DMFs filed with U.S. FDA : higher than Spain , Italy < China and Israel .

9)    OTC market : Approx. Rs. 35 billion , Growth 18 – 20 % .

10) Manufacturing Facilities : Largest number of U.S. FDA approved manufacturing facilities outside U.S.A.

11) Alternative Medicine : Herbal ,Ayurvedic , etc. – about Rs. 38 billion .

12) India will now have a TRIPS compliant patent regime . This will help in attracting more foreign investment .

13) Move towards a liberal price control regime : scope for profit and growth .

 

Major Weaknesses:

1)    Low investments in innovative R and D .

2)    Volume driven but low priced markets – limits value realization .

3)    Low healthcare spends .

4)    Highly fragmented industry .

5)    Inadequate regulatory standards .

6)    Spurious drug sales .

 

Key Opportunities:

1)    Significant export potential .

2)    Licensing deals with MNCs (Multinational Companies) for NCEs (New Chemical Entities ) and NDDS (Novel Drug Delivery Systems) .

3)    Marketing alliances with MNCs to sell their products in domestic market .

4)    Contract Manufacturing for MNCs .

5)    Opening up of the health insurance sector .

6)    Potential for developing India as a centre for international clinical trials .

 

Threats:

1)    2005 IPR regime implies drying up of product pipeline for Indian Companies .

2)    Lack of R and D enabling regulatory environment .

3)    Pricing pressure imposed by DPCO .

4)    China threat .

5)    Loopholes in the patent Bill .

 

Over The Counter ( OTC ):[1]

These are non – prescription medicines and sold directly to the end – users . OTC include following therapeutic segments ;

 

Antibiotics:

It is single biggest therapeutic category in the domestic market and covers vast range of drugs . The popular drugs from the earlier generation antibiotics such as Penicillins ( eg. Benzyl penicillin , amoxicillin ) and Macrolides ( eg. Erythromycin ) are off patent . Whereas the molecules from the newer generation groups like Quinolones ( eg. Ciprofloxacin )and Cephalosporins ( eg. Ceftriaxone ) are still under patent protection .

 

Cardiovascular:

This is a high growth segment globally wherein new drugs are continually introduced by leading Pharmacos . In India too , this segment has become extremely competitive due to new launches at fast pace by Indian companies . The DPCO coverage is relatively less .

 

Analgesic and Antipyretic:

These medicines are used to relieve pain/ fever . Most of the drugs in this category are under DPCO coverage hence , the operating profits are less compared to other therapeutic segments . The popular drugs are Aspirin , Analgin and Paracetamol , which are off patent products .

Antacids and Anti – ulcer ants:

This is a high growth segment experiencing maximum new launches . This segments has large number of new under – patent molecules , due to ongoing  R and D on developing more effective ways to combat acidity / ulcers . Popular drugs are ranitidine , omeprazole , pentaprazole , etc .

 

Respiratory:

The ailments like cough and cold are common occurrences , especially among children . Asthma is often chronic , providing assured long – term demand for medication . Recently DPCO has excluded most popular anti – cough drugs , which led to high sales growth .

 

Anti – tuberculosis:

Most of the popular drugs , eg. Rifampicin are gone off patent and are covered under DPCO .Other important therapeutic segments are Anti – parasitic and Anti – fungal products , Corticosteroids , NSAID drugs , Vitamins , Anti – anemis , Anti – diabetes , Anti – emetic , Anti – histamine , Anti – malarial , CNS and Psychiatric products , Gynecological , Nutrients and Mineral Supplements .

 

Pharmaceutical Policy[1]

Objectives:

The main objectives of this policy are :-

1)   Ensuring abundant availability at reasonable prices within the country of good quality essential pharmaceuticals of mass consumption .

2)   Strengthening the indigenous capability for cost effective quality production and exports of pharmaceuticals by reducing barriers to trade in the pharmaceutical sector .

3)   Strengthening the system of quality control over drug and pharmaceutical production and distribution to make quality an essential attribute of the Indian pharmaceutical industry and promoting rational use of pharmaceuticals .

4)   Encouraging R and D in the pharmaceutical sector in a manner compatible with the country’s needs and with particular focus on diseases endemic or relevant to India by creating an environment into R and D in pharmaceuticals in India .

5)   Creating an incentive framework for the pharmaceutical industry which promotes new investment into pharmaceutical industry and encourages the introduction of new technologies and new drugs .

 

Approaches adopted in the review:

In order to strengthen the pharmaceutical industry’s research and development capabilities and identify the support required by Indian pharmaceutical companies to undertake domestic R and D , a Committee was set up in 1999 by this Department by the name of Pharmaceutical Research and Development Committee ( PRDC ) under the Chairmanship of Director General of CSIR .

 

Salient Features of The Pharmaceutical Policy:

1)           Industrial licensing

2)           Foreign investment

3)           Foreign technology agreements

4)           Imports

5)           Encouragement to research and development

6)           Pricing

a.    Span of price control

b.    Indian pharmaceutical guide ( IPG )

c.    Maximum allowable post – manufacturing expenses ( MAPE )

d.    Margin for imported formulations

e.    Pricing of formulations

f.     Ceiling prices

g.    Exemptions

h.    Pricing of Scheduled Bulk Drugs

i.     Monitoring

j.     Drug Price Equalization Account ( DPEA )

 

7)           Quality aspects

8)           Pharma Education and Training

 

REFERENCES:

1.     Itkar SC , Pharmaceutical management for Pharmaceutical Industry Professionals and Students of Pharmaceutical Sciences , (4th edn ) Nirali prakashan , Pune , 2010 : 1.1 – 2.8 , 3.1 – 4.3 , 12.1 – 12.31 , 21.1 – 21.11 .

2.     Kesic D , Strategic Analysis of The World Pharmaceutical Industry , Management , 14(1) ; 2009 : 59 – 76 .

3.     Buckley J , Pharmaceutical Marketing - Time for Change , Electronic Journal of Business Ethics and Organization Studies , 9(2) : 4 – 11 .

4.     Growth Agenda for Indian Pharmaceutical Industry – 2015 by Interlink Marketing Consultancy Pvt. Ltd :1-22 .

5.     Economics for Pharmaceutical Management : 10.1 – 10.14 .

6.     Pharma Marketing Brochure Influences on Prescribing , July 2008 : 1 – 14 .

7.     Vasiljev S and Pantelic D , Pharmaceutical Market(ing) : Theory and Reality , Club of Economics in Miskolc TMP , 6(2);2010:85-91 .

 

 

 

Received on 05.04.2016       Accepted on 25.04.2016     

© Asian Pharma Press All Right Reserved

Asian J. Res. Pharm. Sci. 2016; 6(2): 95-100

DOI: 10.5958/2231-5659.2016.00013.8