Drug & pharmaceutical industry plays a vital role in the health care of the any country.Rapid growth of this industry requires further attention because even after 50 years of independence, India, with around 15 percent of the World population, accounts for lessthan 2 percent of the drug production in the world. Annual per capita consumption of medicine in India is less than 2% of that in Japan. Health care expense in India is adismal 0.8 percent of GDP compared with 12.4 percent in U.S.A. 6.5% in Japan and 6.2 percent in the U.K, despite higher incidence of disease and malnutrition. The povertyand disease in India on one hand calls for higher standard of healthcare and pharmaceuticals production and on the other, stultifies the growth of industry due to poor affordability of an average Indian. Drug & Pharmaceutical industry has therefore,encountered a tough situation which most industry have always found difficult,to provide abundant quantity of quality products at low prices.

The Indian Pharmaceutical industry, valued at $46.2 billion has been witnessingattractive growth rate of 15% to 20% consistently over the past decade. This growthwas build by India’s large population, increasing allocation of income to healthcarespending and exports. Exports which currently accounts for 20% of the productionvalue has grown by a compound annual growth rate of 34% in the past few years due tocompetitive price advantages from India’s low labor and other input cost.

The Indian market for pharmaceutical products stands at an enormous $58.8 billion.The big 10 companies account for over 30% of that, take away 45 marketer and averagesales don’t even come any where near the $2.5 million marks, that’s how fragmented itsis some 50,000 brands from over 20,00 companies growing fast enough to embarrassrainy day mushrooms and enough diseases to savage Indian population all several times  over and turn Dr. Dolittle into Dr. Don’t care..

About MSD
MSD Pharmaceuticals Private Limited is an affiliate of Merck & Co. Inc., USA. (also known as Merck Sharp &Dohme or MSD in many parts of the world), a global research-driven pharmaceutical company dedicated to putting patients first. Established in 1891, Merck Sharp &Dohme currently discovers, develops, manufactures and markets vaccines and medicines to address unmet medical needs.

With global headquarters in New Jersey, USA, Merck & Co. Inc. 2007 sales stood at US $24.2 billion with 59,800 employees and product sales spanning 140 countries worldwide. The Merck Manufacturing Division employs more than 12, 000 people at locations in 25 countries.

UNPARALLELED SCIENTIFIC EXCELLENCE
Merck & Co. Inc., USA success has always been based on innovation and scientific research. A commitment to excellence in research is at the heart of its philosophy and strategy. Since the founding of its research laboratories over 70 years ago, Merck & Co. Inc. has developed more than 100 new medicines and vaccines.

The Merck Research Laboratories employs approximately 9,500 people at sites in the United States, Canada, Europe and Asia. In 2007 Merck & Co. Inc. invested US $4.9 billion in R&D.

Currently Merck’s priority areas of focus in therapeutic research include Alzheimer’s disease, atherosclerosis, cardiovascular disease,

diabetes, novel vaccines obesity, oncology, pain, and sleep disorders. These therapeutic areas were carefully chosen based on a set of criteria including unmet medical needs, scientific opportunity and commercial opportunity. Within these therapeutic areas, Merck & Co. Inc. has committed resources to achieve research breadth and depth and to develop best-in-class targeted and differentiated products that are valued highly by patients, payers and physicians.

MSD operates in India via three separate legal entities MSD Pharmaceuticals Pvt. Ltd., Organon India Limited and Fulford India Limited. 

Since its existence in India, the company has moved quickly in laying the foundation for a successful business in India; a business that is differentiated by its focus on putting patients first and launching innovative products those are relevant to India. MSD India currently operates in various therapeutic areas including Metabolics, Cardiovascular, Vaccines, Critical Care, Immunology, Virology, Oncology, Women’s health, Dermatology, Respiratory, Virology, Muskulotology and Primary Care.

Post integration with Schering-Plough, the new MSD India offers a much stronger, diversified and higher value product portfolio of over 75 brands in various therapeutic areas, of which 13 are already category leading products.

Vaccine                                            

Our world-class prophylactic and therapeutic vaccines bring relief to millions of people in the region. Vaccines are one of the greatest public health success stories of the 20th century, and Merck has played its part in that story. We are one of a few companies who remain dedicated to the complex business of researching and producing vaccines.

Primary Care

We are committed to improving communities’ access to healthcare through our products and solutions. Our direct contact with healthcare providers and institutions ensures that widest reach of and access to put industry-leading products.

MSD in India and Sun Pharmaceutical Industries Ltd. (Sun Pharma)  announced formation of an India-specific strategic partnership agreement under which Sun Pharma will have the right to market, promote and distribute MSD’s diabetes products, sitagliptin and sitagliptin plus metformin, under different brand names in India.  

Both partners complement each other’s strengths in this arrangement. While MSD in India brings the scientific excellence and market success of the compound to the partnership, Sun Pharma brings its proven success and expertise in the marketing of drugs in the relevant therapeutic areas across India. This is yet another testimonial to MSD’s commitment towards the patients of India and towards addressing high disease burdens of chronic diseases like type 2

Diabetes, while providing broader access of our first in class and best in class drugs in the country.”

Sun Pharma enjoys a strong relationship with the physician community such as diabetologists, endocrinologists and consulting physicians treating patients with diabetes across India.  Through this partnership, the reach of sitagliptin and sitagliptin plus metformin will be enhanced amongst doctors & patients in India, helping them efficaciously manage the disease.”

A REVIEW OF MARKETING STRATEGIES WORK BY DIFFERENT PHARMACEUTICAL COMPANIES

The current shift in the marketing strategy is work by multinational pharmaceutical Companies .It is now high-end (rather than adaptive) 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 the processes and outcomes of globally distributed pharmaceutical companies. This article will present the changing marketing strategies when a pharma company shift from Acute base to Chronic therapy base. This research paper will also give an insight about shift in supply chain process and customer and end-customer perception which is the base of formulation of different marketing strategies.

The pharmaceutical industry is the world’s largest industry due to worldwide revenues of approximately US$2.8 trillion. Pharma industry has seeb major changes in the recent years that place new demands on payers, providers and manufacturers. Customers now demand the same choice and convenience from pharma industry that they find in other segment.

Indian Pharmaceutical Industry is poised for high consistent growth over the next few years, driven by a multitude of factors. Top Indian Companies like Ranbaxy, DRL CIPLA and Dabur have already established their presence.

The pharmaceutical industry is a knowledge driven industry and is heavily dependent on Research and Development for new products and growth. However, basic research (discovering new molecules) is a time consuming and expensive process and is thus, dominated by large global multinationals.

Indian companies have only recently entered the area. The Indian pharmaceutical industry came into existence in 1901, when Bengal Chemical & Pharmaceutical Company started its maiden operation in Calcutta. The next few decades saw the pharmaceutical industry moving through several phases, largely in accordance with

47

(doctor) is responsible . Essentially, the end-user (patient) consumes a product and pays the cost .

Use of medical representatives for marketing products to physicians and to exert some influence over others in the hierarchy of decision makers has been a time-tested tradition. Typically, sales force expense comprises an estimated 15 percent to 20 percent of annual product revenues, the largest line item on the balance sheet. Despite this other expense, the industry is still plagued with some very serious strategic and operational level issues.

2.1 From organizational perspective the most prominent performance related issues are enlisted below:

a) .Increased competition and shortened window of opportunity.

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

c). Poor customer acquisition, development and retention strategies

.

d). Varying customer perception.

e). The number and the quality of medical representatives

d). Very high territory development costs.

f). High training and re-training costs of sales personnel.

g).. Very high attrition rate of the sales personnel.

h). Busy doctors giving less time for sales calls.

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

j). Unclear value of prescription from each doctor in the list of each sales person.

k). Unknown value of revenue from each retailer in the territory

l). Virtually no mechanism of sales forecasting from field sales level, leading to huge deviations

m). Absence of analysis on the amount of time invested on profitable and not-so-profitable customers and lack of time-share planning towards developing customer base for future markets

n). Manual and cumbersome administrative systems and processes designed

which     don’t   facilitate   optimal   efficiency   levels   in   sales   teams

And many more…………

2.2 Patents

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

2.3 New Drug Approval (NDA)

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

2.4 WTO

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

2.5 RESEARCH & DEVELOPMENT (R&D)

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

2.6 THE COMPETITION

The level of competition in very high in Acute segment on day to day basis

49

however the degree of competition in not as much as high in Chronic therapy area on day to day basis

As doctor has to prescribe drug for a long time in chronic cases and patient is suppose to consume it without any change of brand. While in acute cases doctor is changing brands on day to day basis.

3.Pharmaceutical Company Business Strategies

What’s the secret behind these successes? For one, the company operates in niche formulations (chronic) segments such as psychiatry, cardiovascular, gastroentology and neurology. While most of the top Indian companies have focused on antibiotics and anti– infectives (acute), Sun Pharma focused on therapeutic areas such as depression, hypertension and cancer. The company has introduced the entire range of products and has gained leadership position in each of these areas. Being a specialty company insulates Sun Pharma from the industry growth. The first quarter results for FY02 explain this to some extent. While the industry was affected to a large extent by a slowdown in the domestic formulations market, Sun Pharma logged a growth of 26% in revenues. Over the years Sun has also used the strategy of acquisitions and mergers to grow quickly. It acquired Knoll Pharma’s bulk drug facility, Gujarat Lyka Organics, 51.5% in M. J. Pharma, merged TamilNadu Dadha Pharma & Milmet Labs and acquired Natco’s brands. Post Merger with TamilNadu Dadha Pharma the company gained presence in gynecology and oncology segments.

One of the constants of pharmaceutical company strategy over the past decade has beenincreasing scale. Only by growing larger are companies able to afford the considerable costs of drug development and distribution.

Within this broad approach at least two business models are discernable:

(i)    Super Core Model involving the search for, and distribution of a small number of drugs from Chronic Threapy Area that achieve substantial global sales. The success of this model depends on achieving large returns from a small number of drugs in order to pay for the high cost of the drug discovery and development process for a large number of patients. Total revenues are highly dependant on sales from a small number of drugs.

Core Model in which a larger number of drugs from Acute Threapy Area are marketed to big diversified markets. The advantage of this model is that its success is not dependant on sales of a small number of drugs.

For more info, Pl  sent email at : findtutoronline.net@gmail.com

Suggestions & Feedback are most welcome.