A STUDY OF PROMOTIONAL STRATEGY OF

SUN PHARMACEUTICAL
Project Report submitted to
(NAAC Re-Accredited “A” Grade)
Dr. Babasaheb Ambedkar Marathwada
University ,Aurangabad

M.S.P Mandal’s
Deogiri College, Aurangabad
For Degree of,
Master of Commerce
Under the Faculty of Commerce and Management
In Subject of Commerce

By
AKSHAY KULKARNI

Under the Guidance of

Prof.Dr. Vasundhara Maturkar Prof. Dr. Sanjay D. Ratnaparkhe

M.Com. B. Ed., Ph.D. M.Com., M.B.A., NET., GDC&A., L.L.B., Ph.D.
(HOD & Co-ordinater)

Department of Commerce
Deogiri College Aurangabad
2021-2022

1
 CERTIFICATE

This is to certified that this,

A STUDY OF PROMOTIONAL
……………………………………..STRATEGY OF SUN PHARMACEUTICAL

Is the bonafide work of, AKSHAY KULKARNI

Exam Seat No: ----------------------------

She /He carried out the research under my supervision certified

further, that to the best of my knowledge the work reported herein is
completed as per the requirements of Dr. Babasaheb Ambedkar
Marathwada University, Aurangabad. In partial fulfillment of Master
of Commerce for the Academic year 2021-2022.

Signature of the Guide HOD(P.G.) &Coordinator

P.G Studies

Internal Examiner External Examiner

2
 DECLARATION

I Akshay Kulkarni student of the M.COM Studying in Deogiri

College, Aurangabad, Solemnly declare that the project-

A STUDY OF PROMOTIONAL STRATEGY OF SUN

PHARMACEUTICAL

Was carried out by me in partial fulfillment of the degree of M.com

program under the Dr. Babasaheb Ambedkar Marathwada University,
Aurangabad.
This project was undertaken as part of academic curriculum as per
university rules and norms and by no commercial interest or motive. It is
my Original work and not elsewhere for any other earlier.

PLACE: Aurangabad
Akshay Kulkarni
DATE /0 / 2022 Exam Seat No: --------

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 ACKNOWLEDGMENT

“Gratitude is not things of expression; it is more a matter of

feeling”. There is always a sense of gratitude which one express for
other for their help and supervisor in achieving the goals.
I too express my deep gratitude to each and every one who has been
helpful me in completing the project report successfully.
First, of all, I am highly thankful to Dr. Sanjay D. Ratnaparkhe,
Prof. Dr. Vasundhara Maturkar Madam , for allowing me to pursue my
project –
A STUDY OF PROMOTIONAL STRATEGY OF SUN
PHARMACEUTICAL

My special thanks to Prof. Nitin G. Kharat Sir, Prof. Saurabh M.

Sale Sir who encouraged me, properly guided me in each and every
possible way throughout my project reports.
I also give my regard and sincere thanks to Principal Prof. Dr.
Ashok Tejankar Sir, Prof. Dr. Dilip Khairnar Sir, who has devoted their
precious time in guiding me and helping me with it in time.

Date:- /0 / 2022
Akshay Kulkarni
Seat No-----------------

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 TABLE OF CONTENTS

S. No. PARTICULARS PAGENO.

1. Certificate from Guide 1
2. Student declaration 2
3. Acknowledgement 3
4. Chapter-1 Introduction 7
 About the topic 8
 Government Policies 9
 Objectives and Scope 11
5. Chapter-2 Literature 13
Review
6. Chapter-3 Research 49
Methodology
 Research Design 50
 Data Sources 51
7. Chapter-4 Data Analysis 53
8. Chapter-5 Findings and 79
Inferences
9. Chapter-6 Conclusion 85
10. Chapter-7 References 88

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6
 CHAPTER -1
INTRODUCTION
Government Policies
Objectives and Scope

7
 INTRODUCTION

PHARMACEUTICAL MARKETING IN INDIA: A MACROSCOPIC

VIEW
Sun Pharmaceutical Industries Limited Sun Pharma is a leading global
specialty generic and India’s top pharmaceutical company. A vertically
integrated business, economies of scale and an extremely skilled team enable
it to deliver quality products in a timely manner at affordable prices. It provides
highquality, affordable medicines trusted by customers and patients in over
150 countries, globally.

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 less than 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 a dismal 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 poverty and
disease in India on one hand call 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

witnessing attractive growth rate of 15% to 20% consistently over the past
decade. This growth was build by India's large population, increasing
allocation of income to healthcare spending and exports. Exports which
currently accounts for 20% of the production value has grown by a compound
annual growth rate of 34% in the past few years due to competitive price
advantages from India's low labor and other input cost

8
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 average sales don't even come any where near the $2.5 million
marks, that's how fragmented its is some 50,000 brands from over 20,00
companies growing fast enough to embarrass rainy day mushrooms and
enough diseases to savage Indian population all several times over and turn
Dr. Dolittle into Dr. Don't care.

GOVERNMENT POLICIES

In a country lacking the assurance of free health care for all (not to talk of an
effective health insurance system), it is the poor patient's family who must pay
the bill. This was the justification for the policy. But it killed any incentive to
invest in R&D (Research and Development), which makes global drug
manufacturers what they are: leader of mankind's war on disease. India's per
capital consumption of drugs is said to be just $3. In the US its over $100 and
in Japan, over $400. India has about 20% of the world's disease burden (with
just 16% of its population). Western spending is high because in a system
where the government pays the bills, the patients get themselves prescribed
all sorts of pills for ailments that aren't terribly serious. But why is Indian
spending so low? Only 35% of the population has access to modern (read
allopathic) medicines. India has alternative system of medicines, Ayurveda,
e.g. are not quacks, neither are homeopaths who make their own medicines.

India also exports sizable quantities of drugs & pharmaceuticals. More

companies are now venturing into traditional health care systems beside
modern medicine. With the launching of new drugs policy, all bulk drug
formulation and intermediaries except five bulk drugs have been de-licensed.
Many drugs that were hither to under price control have been taken out of
such control. Actually, the list of controlled drugs has been halved and is
limited to 73 items.

9
Higher rate of return has been allowed for those drugs that are still under
price control. Companies with 51 percent foreign equity have been brought on
par with wholly Indian companies, automatic clearance would be given for 51
percent foreign equity automatic approval would be given for foreign
technology agreement as well. Earlier such companies had restriction on the
product they could manufacture or import. A National Drug Authority is to be
set up to monitor quality control and rational use of medicine. A national
pharmaceutical pricing authority is also to be set up to fix prices in respect of
drug, which would continue to be under price control (Ramaswamy &
Meerakumari, 1988).

The Indian pharmaceutical industry is highly regulated, essentially on three

aspects:

 Patents

 Price

 Product quality

The various legislations that govern the Indian Pharmaceutical Industry are:

 The Indian Patents Act 1970 (and the amendments thereafter)

 Drug Price Control Order (soon to be replaced by Pharmaceutical

Policy 2002)

 The Drugs and Cosmetics Act 1940

The legal framework for the industry should be such so as to increase the
strengths of the industry, mitigate the weaknesses, void off the threats and
cash in on the opportunities.

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OBJECTIVES AND SCOPE

OBJECTIVES AND SCOPE: The Board of Directors (the “Board”) of the Sun
Pharmaceutical Industries Limited (the “Company”) recognises the need to lay
down a broad framework for considering decisions by the Board of the
Company, with regard to distribution of dividend (including any interim
dividend) to its equity shareholders and/ or retaining or plough back of its
profits. The Policy sets out the circumstances and different factors for
consideration by the Board at the time of taking such decisions of distribution
or of retention of profits, in the interest of providing transparency to the equity
shareholders. The Policy is not an ‘alternative’ but a ‘Guide’ to the decision of
the Board for recommending dividend, which may be made after taking into
consideration all the relevant circumstances enumerated hereunder and such
other factors as may be decided as relevant by the Board. While
recommendation of Dividend shall be guided by this Policy, in extraordinary
circumstances, the Board shall have complete liberty to recommend dividend
in deviation to this policy, if so deemed necessary in the best interests of the
Company and its stakeholders. The Policy reflects the intent of the Company
to reward its equity shareholders by sharing a portion of its profits after
adjusting for accumulated losses, if any, and also retaining sufficient funds for
future growth of the Company. The Company intends to pay, subject to the
circumstances and factors enlisted hereon, dividend, which shall be
consistent with the performance of the Company over the years. Subject to
the considerations as provided in the Policy, the Board shall determine the
dividend payout in a particular year after taking into consideration the
operating and financial performance of the Company, the advice of executive
management including the CFO, and other relevant factors.

The present study of the pharmaceutical industry of India revolves around the
following basic objectives:

 To understand how pharmaceutical companies launch their product.

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 To know what promotional strategies are used by pharmaceutical
companies to sell their products in the market.

 To understand what is the role played by sales representatives in this

regard.

12
 CHAPTER – 2
LITERATURE REVIEW

13
 LITERATURE REVIEW

Company profile

Sun Pharmaceutical Industries Ltd. (Sun Pharma) is the fourth

largest specialty generic pharmaceutical company in the world with
global revenues of over US$ 4.5 billion. Supported by more than 40
manufacturing facilities, we provide high-quality, affordable
medicines, trusted by healthcare professionals and patients, to more
than 100 countries across the globe.


1983
Year Founded


$4.5 Billion+
Global Revenue


14
 4th Largest
Generic Pharmaceutical
Company Worldwide


36000+
Employees
Across The Globe

Diversified Specialty and Generics Portfolio

We manufacture and market a large basket of pharmaceutical formulations
covering a broad spectrum of chronic and acute therapies. It includes
generics, branded generics, specialty, complex or difficult to make
technology-intensive products, over-the-counter (OTC), antiretrovirals (ARVs),
Active Pharmaceutical Ingredients (APIs) and Intermediates. Our broad
portfolio of more than 2000 high quality molecules covers multiple dosage
forms, including tablets, capsules, injectables, inhalers, ointments, creams,
and liquids.
Every year, we sell over 30 billion doses covering neuro-psychiatry,
cardiology, gastroenterology, anti-infectives, diabetology, oncology,
ophthalmology, dermatology, urology, nephrology and respiratory among
others.

Driven by Innovation
The first among Indian pharmaceutical companies to realise and embrace the
importance of investing in research, we invest up to 7-8% of our global
revenues into Research and Development (R&D) every year.
Our core strength lies in our ability to excel in developing generics and
technologically complex products backed by our dedicated teams in
formulations, process chemistry, and analytical development.

15
Our capabilities extend beyond the development of differentiated products,
including liposomal products, inhalers, lyophilized injections, nasal sprays,
and controlled release dosage forms.
Our R&D is led by a strong team of more than 2000 scientists.

Global Footprint
From humble beginnings in 1983, Sun Pharma has grown to become one of
the largest generic pharmaceutical companies worldwide. We are the largest
pharmaceutical company in India.
In the US, we are among the top 10 generic pharmaceutical companies and
are ranked second by prescriptions in the generic dermatology market.
We are the largest Indian company in emerging markets with a presence in
over 80 markets. Brazil, Mexico, Russia, Romania and South Africa are some
of our key emerging markets.
We are present across all major markets in Western Europe, Canada,
Australia, New Zealand, Japan and China among others.

Milestones

2021
We launched ILUMYA™ (tildrakizumab injection), a treatment for adults living
with moderate-to-severe plaque psoriasis in Canada
We launched a speciality dermatology product, WINLEVI® (clascoterone)
cream 1% in the U.S. for topical treatment of Acne Vulgaris
We forayed into the nutrition bar segment in India with the launch of Revital
NXT, India’s first nutrition bar with the goodness of natural ginseng, 16
vitamins & minerals and triple blend protein

2020
We complete 25 years of making our debut on the Indian Stock Exchanges

16
We launched ILUMYA™ for treatment of plaque psoriasis in Japan

2019
We acquired Pola Pharma in Japan to strengthen our global dermatology
presence
We launched our specialty product, Cequa in the United States for the
treatment of dry eyes
We entered Greater China market through partnership with China Medical
System Holdings

2018
We launched specialty product, ILUMYA™ (tildrakizumab-asmn) in the United
States for treatment of moderate-to-severe plaque psoriasis

2017
We launched specialty product, Odomzo in USA

2016
We acquired 14 brands from Novartis in Japan
We acquired Ocular Technologies, Sarl to strengthen our branded ophthalmic
portfolio
We acquired Biosintez to enhance our presence in Russian market
We launched our first branded ophthalmic product, BromSite™ in USA

2015
We acquired GSK’s Opiates business in Australia
We acquired InSite Vision Inc. to strengthen our branded ophthalmic portfolio
in USA

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2014
We acquired Ranbaxy in a US$ 4 billion landmark transaction to create the
world’s 5th largest specialty generic pharmaceutical company
Sun Pharma and Merck & Co. Inc. entered into licensing agreement for
Tildrakizumab (MK- 3222)
We acquired Pharmalucence in USA

2012
We acquired Dusa Pharmaceuticals and the generic business of URL
Pharmaceuticals in USA

2010
We acquired controlling stake in Israel-based Taro Pharmaceuticals,
headquartered in USA to effectively double company’s US business

2008
We acquired Chattem Chemicals Inc, USA

2007
We demerged Sun Pharma Advanced Research Company (SPARC) into a
separate entity

2005
We completed buyout of manufacturing unit in Bryan, Ohio, USA
We acquired ICN’s business in Hungary from Valeant Pharma

2004
We set up a new formulation unit in Jammu, India
We commissioned the first joint venture manufacturing unit in Dhaka,
Bangladesh

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We acquired Phlox Pharma (India) and niche brands from Women’s First
Healthcare (USA)

2001
We commenced production at our new formulations unit in Dadra, India

2000
We acquired Pradeep Drug Company in India

1999
We acquired Milmet Labs, Cephalexin and 7ADCA actives manufacturing site
in India

1998
We began operations at a new formulation unit in Silvassa, Gujarat, India

1997
We purchased equity stakes in TDPL and MJ Pharma
We had our first international acquisition – Caraco Pharmaceutical
Laboratories, USA (completed 100% acquisition in 2010)
We established new research facility in Mumbai, India

1996
We expanded our sales network across 24 countries
We acquired API plant from Knoll Pharma at Ahmednagar, Maharashtra, India

1995
We began production at API manufacturing plant in Panoli, Gujarat, India

1994
We launched Initial Public Offering (IPO)

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1991
We established our first research center to create a base for strong product
and process development

1988
We launched Monotrate and Angize, our first cardiology products

1983
Sun Pharma established with five psychiatry products and a two-person
marketing team
Sun Pharma set up our first manufacturing facility for tablets and capsules at
Vapi, Gujarat, India

CORPORATE SOCIAL RESPONSIBILITY In compliance with the

requirements of Section 135 of the Act read with the Companies (Corporate
Social Responsibility Policy) Rules, 2014, the Board of Directors have
constituted a Corporate Social Responsibility (CSR) Committee. The details of
membership of the Committee and the meetings held are detailed in the
Corporate Governance Report, forming part of this Report. The contents of
the CSR Policy of the Company as approved by the Board on the
recommendation of the CSR Committee are available on the website of the
Company and can be accessed through the web link:
http://www.sunpharma.com/policies. During the year, the Company has spent
`43.71 Million which amounts to about 3.24% of the average net profits of the
Company in the three preceding financial years. The annual report on CSR
activities containing details of expenditure incurred by the Company and brief
details on the CSR activities are provided in ‘Annexure – F’ to this Report.

Historical Prospective of pharma companies

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The production of bulk drug was virtually non existent in India at the time of
independence in 1947. It increased from a meager $715 million in 1962 to
$2.4 billion in 1980 and further about $8.4 billion in 1990. Production of
formulation is increased from $90 million in 1947 to $14.4 billion in 1980 to
$36.3 billion in 1990. The demand for pharmaceuticals increased due to
increase in population, increase in affordability of a section of population and
government emphasis on health program. The industry grew despite claims of
price & production control. By the year 2000 the demand for pharmaceuticals
is expected to reach up to $6.72 billion per annum. There has been 1000%
growth in the number of drug manufacturers in India since 1970. That was the
year when the Indian Patent Acts and Drug Price Control Order (DPCO) came
into force (The Eastern pharmacist 1988). While the first accorded intellectual
property protection to manufacturing processes (not product formulas), the
second began regulating prices to ensure that drug manufacturer who were
being allowed to copy foreign drugs would make them cheaply available to the
common man.

Indian Drug and Pharmaceutical (D & P) industry presents a picture of fast

development. Today, India manufactures most of its requirement of bulk drugs
and formulation. In fact, more than 30,000 different pharmaceutical
formulation worth $210 million are manufactured and sold in India. There are
45 major pharmaceutical firms, each with a sizable investment and sales
turnover. Investment ranges between $1.47 million to $4.2 million the sales
ranges between $2.10 million to $54.6 million per annum. Growth in this
industry was to the tune of 23.4 per cent in 1997-98. This was phenomenal in
comparison with the other industries most of which have run into losses or
very nominal profits leading to a slowing down of the growth.

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 India’s Pharmaceutical Industry
India’s pharmaceutical industry is one of the fastest growing segments of the
Indian economy with an average annual growth rate of 14 percent during
2005-2008. Overall, the Indian market for pharmaceuticals is projected to
grow at an average annual rate of between 15 and 20 percent during 2005 -
2010. The surge in production has been driven by legislative reforms, the
growth in contract manufacturing and outsourcing, value added foreign
acquisitions and joint ventures, India’s mastery of reverse engineering of
patented drug molecules, and India’s efforts to comply with its World Trade
Organization (WTO) Trade Related Intellectual Property Agreement (TRIPs)
obligations. When India joined the WTO in 1995, its pharmaceutical exports
were valued at less than $600 million. By 2009, its exports had grown to $3.7
billion and accounted for more than 61 percent of industry turnover. Currently,
Indian pharmaceutical companies produce between 20 and 22 percent of the
world’s generic drugs (in value terms) and offer 60,000 finished medicines
and nearly 400 bulk drugs used in formulations.

The pharmaceutical industry in India is going through a major shift in its

business model in the last few years in order to get ready for a product patent
regime from 2009 onwards. This shift in the model has become necessary
due to the earlier process patent regime put in place since 1972 by the
Government of India. This was done deliberately to promote and encourage
the domestic health care industry in producing cheap and affordable drugs. As
prior to this the Indian pharmaceutical sector was completely dominated by

22
multinational companies (MNCs). These firms imported most of the bulk drugs
(the active pharmaceutical ingredients) from their parent companies abroad
and sold the formulations (the end products in the form of tablets and
capsules, syrups etc.) at prices unaffordable for a majority of the Indian
population. This led to a revision of Government of India’s (GOI) policy
towards this industry in 1972 allowing Indian firms to reverse engineer the
patented drugs and produce them using a different process that was not
under patent. The entry of MNC’s was also discouraged by restricting foreign
equity to 40%. The licensing policy was also biased towards indigenous firms
and firms with lesser foreign equity. All these measures by GOI laid
foundations to a strong manufacturing base for bulk drugs and formulations
and accelerated the growth in the Indian Pharmaceutical Industry (IPI), which
today consists of more than 20,000 players. As a result, the Indian
pharmaceutical industry today not only meets the domestic requirement but
has started exporting bulk drugs as well as formulations to the international
market.

LEADING INDIAN PHARMACEUTICAL MANUFACTURERS

India’s leading pharmaceutical companies are striving to compete not only in

the domestic Indian market, but also in the global market for both generic
drugs and original products. Sales for India’s largest 200 pharmaceutical
companies grew from $7.9 billion in 2007 to $8.6 billion in 2008, or by 9
percent. By 2008, 9 of the top 10 Indian 21 drug makers were Indian-owned
firms accounting for more than 44 percent of total industry sales. India’s top
five pharmaceutical companies, in terms of sales, are Ranbaxy Laboratories,
Dr. Reddy’s Laboratories, Aurobindo Pharmaceutical, GSK-India, and Cipla.
These companies manufacture a wide range of generic drugs (branded and
non-branded), intermediates, and active pharmaceutical ingredients (APIs).

In terms of total sales, Ranbaxy Laboratories is India’s largest pharmaceutical

company and one of the world’s top ten generic drug makers. In 2009, exports
accounted for nearly 80 percent of Ranbaxy’s sales and the United States is
Ranbaxy’s largest market. Ranbaxy accounts for 23 percent of India’s
pharmaceutical industry revenues. Ranbaxy is a vertically integrated company

23
with a presence across the pharmaceutical value chain, offering a range of
unbranded and branded generics, active pharmaceutical ingredients, and
biotechnology products. Ranbaxy markets its products in more than 100
countries, a sales presence in 23 of the world’s top 25 pharmaceutical
markets, and has manufacturing facilities in 8 countries. Cipla, India’s second-
largest pharmaceutical company, is best know for its anti- AIDs drugs, and Dr.
Reddy’s Laboratories, India’s third-largest pharmaceutical company, also rely
heavily on exports as its revenues.

Table: India’s top 10 pharmaceutical company sales ($million)

MNC PRESENCE IN INDIA:

Many of the world’s leading pharmaceutical companies have subsidiaries or

other operations in India. Multinational companies like GlaxoSmithKline
(GSK) Baxter, Aventis, Pfizer, Novartis, Wyeth, and Merck have been
active in India’s pharmaceutical market mainly through subsidiaries. The re-
introduction of product patents precipitated the return of a large number of
other MNCs, some of whom left during the process patent era. MNC
pharmaceutical companies have also been attracted by tax holidays, the
deduction of capital R&D expenditures, and other financial incentives offered
by the Indian government. Industry sources indicate that the most significant
challenges facing MNCs are the uncertainly over pharmaceutical price
controls and data exclusivity.

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There are approximately 34 foreign drug companies engaged in the Indian
pharmaceutical market and among them are 15 of the world’s 20 largest
pharmaceutical companies. According to FICCI, although MNCs have not
launched new products they have invested in new production facilities and
R&D centers and many are engaged in contract manufacturing, clinical trials,
and other forms of outsourcing. In 2008-09, MNCs invested more than $172
million in India’s pharmaceutical industry and FDI has grown by a compound
annual growth rate (CAGR) of 62 percent during 2002-06. However, many
industry experts believe that the return of the world’s leading pharmaceutical
companies will gradually erode India’s cost advantages. According to the
Organization of Pharmaceutical Producers of India, multinational drug
companies currently command 24 percent of the domestic Indian market,
through their share could rise to 40 percent by 2010.

LARGE MARKET SHARE FOR GENERIC DRUGS

As there was no efficient patent protection between 1970 and 2005, many
Indian drug producers copied expensive original preparations by foreign firms
and produced these generics by means of alternative production procedures.
This proved more cost-efficient than the expensive development of original
preparations as no funds were required for research, which contained the
financial risks. This spending block may come to as much as EUR 600 m for
only one drug. This kind of money could previously only be raised by large
corporations in the industrial countries. The competitiveness of generics
producers is based on cost-efficient production. In this field, Indian companies
are currently in top position. At one-fifth, India’s share in the global market for
generic drugs is considerably higher than its share in the overall
pharmaceuticals market (approx. 2%). At the same time, India’s
pharmaceutical companies gained know-how in the manufacture of generic
drugs. Hence the name “pharmacy of the poor” which is frequently applied to
India. This is of significance not least for the domestic market as disposable
income is as little as EUR 1,900 per year for roughly 140 million of the total of
192 million Indian households1, which means the majority of Indians cannot
afford expensive western preparations.

25
 Market Share of Corporate

Market Share of MNCs & Local Companies

Between 1996 and 2006, nominal sales of pharmaceuticals on the Indian

subcontinent were up 9% per annum and thus expanded much faster than the
global pharmaceutical market as a whole (+7% p.a.). Indian companies
strongly expanded their capacities, making the country by and large self-
sufficient. Nonetheless, with total sector sales of roughly EUR 10 bn, India
commands a less than 2% share in the world’s pharmaceutical market (1966:
1.5%). This puts the country in twelfth place internationally, even behind
Korea, Spain and Ireland and before Brazil, Belgium and Mexico. Among the
Asian countries, India’s pharmaceuticals industry ranks fourth at 8%, but has
lost market share to China, as sales growth there was nearly twice as high
and sales volumes nearly four times higher than in India.

26
Globalization has not caused traditional medicine to be abandoned but with
higher education, rising income and a change in lifestyle, western medical
treatment is gaining in importance. At present the population especially in
rural areas still sees western medicine as a stop-gap cure which is unlikely,
though, to provide a lasting solution to health problems. Today, about 70% of
the population on the Indian subcontinent depends entirely or at least in part
on traditional Indian medicine which is cheaper and more easily available than
western drugs.

Indian companies have recognized the opportunity presented by western

pharma in search of lower costs and higher profits, and are exploiting the
low cost base and pool of highly skilled labour in their market to develop a
thriving outsourcing industry, positioning India as a key provider of contract
research and manufacturing services.

India is increasing its R&D and biotechnology focus and taking advantage
of the low R&D productivity of developed markets to gain partnerships with
western players. These alliances enable the companies to gain expertise
in discovery and development as well as maximizing revenues if and when
products reach the market.

Pharma’s and biotech’s in the US, Europe and Japan have realized the
increasing role of India at a global level. Many players are outsourcing
non-core activities of the research and manufacturing process.
Outsourcing is a popular option, while off-shoring via direct investment,
joint venture or acquisition is also proving successful.

DRUG DISTRIBUTION

Many a times drugs promoted through professional service representatives do

not appear on the shelves of the retailing chemist. This can be attributed to
ineffective distribution system. Although distribution is recognized in India as
an important function, many pharmaceutical marketers accord it a mere
supportive role; so the distribution system has remained traditional with little
or no innovations. Superstockists/stockists, distributors and C& FA's (Carrying
& Forwarding Agent) have traditionally been very loyal to pharmaceutical

27
marketers. As a result, strategic changes in distribution arrangement were
rarely recommended or carried out. Problems, if any, were always sorted out
amicably and changes, when at all, were concerned only with adding or
deleting stockists in the distribution chain. Over time when AIOCD (All India
Organization of Chemist & Druggist) mobilized retailers in every state,
pharmaceutical companies found their freedom to appoint stockist restricted
by retailer pressure.

There have been other changes too. One may view the distribution set up as
a concentric pattern with patients at the center with each ring representing a
link in the chain. It must be noted that some rings prefer by passing the next
one. Some companies, for instance, deal directly with stockists, whereas
some high-end products that require highly sensitive servicing are distributed
directly to doctors. Some innovative ideas have been coming from such
companies like HoechstTM, SarabhaiTM, Sandoz (NovaratisTM) and now
Nicholas PiramalTM.

In 1988 Sandoz decided to make changes in its method of giving discount to

C & F (Carrying and Forwarding Agents) through a simple innovation. Instead
of paying direct percentage on sales to agents it started paying on basis of
case lots. Each case lot weighed approximately 12-15 kg and on each case
lot, it paid $ .19 - $ .32 to C&FA. As result, SandozTM reduced the cost of
operations by 1.2 percent of its total turn over, an enormous figure when
calculated in rupee terms. It is often true that effective distribution along with
right pricing differentiates a success from a failure in market place. In India,
most companies market a vast portfolio of products (that others are also
selling) and pricing decisions are delegated. In a market with many brands
meeting the same need, even the rare marketer who begins by formulating a
program based on inputs from the doctors and patients often ends up glossing
over question of profit while setting the price. In the old days production
volume were often kept fixed (either by the company or the licensing
authority). In this state costs were easy to measure and simple cost-plus
pricing used to work. Also, marketers had to live under the rules of Drug Price
Control Order (DPCO), the government price fixing instrument for essential
drugs.

28
Since liberalization began in 1991 the DPCO has been losing its grip and the
prices of many formulations, allowing market forces to play the regulator.
Other aspects of liberalization have made companies hungry for growth. In
such a dynamic state of existence where growth is both desirable and
achievable, pricing is less simple. Lack of strategic thinking leads to chaotic
pricing. Every body agrees that intelligent pricing can be used as a critical
edge for any product. Yet in the pharmaceutical industry, trends suggest that
enough thought is not being given to such serious decisions. A single player
marketing thoughtless decision can have repercussions on the entire market.
Many marketing managers don't understand the impact of their own decision
on the market. As a result, they think of themselves as either price takers or
makers. There is rarely a marketer who wants to upset the apple cart--
strategically--by becoming a price breaker. This can be suitably illustrated with
the example of GlaxoTM: GlaxorTM, when it launched CeterzineTM an anti-
allergic, played price maker. It set a price it thought fit, then came a crowd of
followers, and they were price takers. So, there was a market where
GlaxoTM, UCBTM and UnichemTM were all selling at $ .06 per tablet. Then
came SOLTM. It decided to reset the scale and change the markets dynamics
So it played price breaker, selling its CeterzineTM brand at $.023 per tablet. In
18 months, it was selling higher volume then GlaxoTM i.e., the price maker
brand. GlaxoTM did not react and continued with the same price. Today Lupin
and Core are selling below SOL's price. So, the price breaker managed to
start a price war, but GlaxoTM has won back the brand leadership.

DRUG PROMOTION METHOD

“The commercial needs of countless, fiercely competing pharmaceutical

companies has led them to depend on the tried and tested 3Cs:
convince if possible, confuse if necessary, and corrupt if nothing else
works.”

Health professionals in developing countries work in overstretched and under

resourced sectors on low pay and in difficult conditions. In such conditions the
promotions from the drug companies are inviting. Disparities in health
spending between the world’s richest countries and the world’s poorest

29
countries are such that a relatively cheap promotion in a developing country
will generate much more interest there than it would in a developed country.

The aim of drug promotion is to persuade people to buy more drugs and/or to
pay higher prices. This is done by increasing the perceived value of the drug
via one or more of several approaches including:

Increasing the perceived frequency and/or severity of the indications.

Widening the indications to include more people.

Increasing the perceived likelihood and magnitude of benefits.

Decreasing the perceived likelihood and magnitude of harms.

Increasing the use of the drug for longer durations.

The World Health Organization defines drug promotion as including: “all

informational and persuasive activities by manufacturers and distributors, the
effect of which is to induce the prescription, supply, purchase and/or use of
medicinal drugs.” The main aim of promotion is not to inform but to persuade.
Consumer goods advertisements rarely convey much information about the
features of the product. Instead the emphasis of much advertising is on
associating consumption of the product with positive feeling.

Regardless of where they are operating, most drug companies try to identify
where people are on the following behaviour change stages and then deploy
sophisticated marketing techniques to motivate them to move one or more
stages towards repeat use:

Each move requires motivation and decision making so drug companies study
how to understand human motivations and decision-making. Public relations
techniques bypass people’s defenses by giving the impression that the
message is coming from a trustworthy source.

Doctor-directed promotion methods

30
ETHICS IN PHARMACEUTICAL PRODUCTS PROMOTION

Recently the Organization of Pharmaceutical Producers of India (OPPI),

which is a premier organization of pharmaceutical manufacturers in India, has
revised its model code on standards of promotion activity to medical
practitioners. This model code aims to restrict pharmaceutical companies from
providing ‘freebies’ to medical practitioners so as to reduce influence on
prescribing drugs of a particular company. This is based on the International
Federation of Pharmaceutical Manufacturers Associations (IFPMA) code
which is considered as a model code. Section 2.2 of General Principles of
OPPI code states that ‘No financial benefit or benefit-in-kind (including grants,
scholarships, subsidies, support, consulting contracts or educational or
practice-related items) may be provided or offered to a healthcare
professional in exchange for prescribing, recommending, purchasing,
supplying or administering products or for a commitment to continue to do so’.
This clearly states the refined position of OPPI code which is based on a

31
noble intention of having a rationale for prescribing a product of a particular
company by the medical professional without any influence so as to benefit
the patient. It gives more freedom to medical professionals to choose the
treatment option for patients on a case by case basis if they are not influenced
by pharmaceutical companies. But it is a well-known fact that there are many
companies trying to influence the prescribing habit of doctors with their kind
gesture towards the practitioner, which ultimately tempts other companies
also to lure the medical practitioners by providing freebies, apart from
scientific information including literature, brochure and other scientific inputs.
The condition of the Indian pharma industry is also pathetic with more than
20,000 manufacturing units that sell more than 70,000 brands.

It is virtually impossible for any medical practitioner or even a common man to

remember the whopping number of brand names. Every company or
manufacturer wants to survive in this cut-throat competition and thus direct
their efforts towards these unhealthy practices. Though the OPPI code has
tried to amend some of these unethical practices in tune with IFPMA code,
which is welcomed by trade associations, some lacunae exist. What about
companies that are not members of OPPI? What if companies continue to
promote their product in an unscientific way? Is there any mechanism by
which unscientific promotion by companies is restricted? Besides, the
companies that are not members of OPPI may not follow the code and can
circumvent the provisions, still continue to influence the medical practitioners.
The Drugs and Magic Remedies (Objectionable Advertisements) Act in India
states only the conditions for which a drug cannot be directly advertised. At
present there are no provisions to monitor how companies, that are not
members of OPPI, adhere to standard practices. While the new code by OPPI
may not be music to the ears of medical practitioners since many of them
would be devoid of the favours accorded to them by certain pharmaceutical
companies. At the same time, it is required that the prescription generated at
the hands of the practitioner takes care of the patient’s clinical condition and,
more importantly, the economic status of the patient. Let the medical
practitioner be an unbiased or an impartial judge of what is required and for
which patient. What is needed is a concrete, directed and focused effort by all

32
players of the pharmaceutical industry and other stakeholders as well, in order
to regulate the promotional activities of pharmaceutical companies to medical
practitioners. As OPPI has modelled its code on the IFPMA code, all trade
associations of pharmaceutical industry, government, NGOs and common
men should join hands together to curtail the practice of influencing medical
practitioners. Governments can frame and enact laws and legislations that
would take care of marketing practices and create a monitoring authority that
would monitor the promotional activities of pharmaceutical companies in India.

PROMOTIONAL STRATEGIES OF PHARMA COMPANIES IN

INDIA

The key determinants of success of any Pharmaceutical industry, besides the

cost and availability of capital are brand building. In the pharmaceutical
business in India, most companies work on monthly, bimonthly or quarterly
promotional cycles; and promotional resources are carefully allocated to
ensure that the company achieves maximum sales. Most organizations bring
out ‘strategy guides, which provide details on inputs, information on
competition, approaches to detailing and sometimes a chart on incentives.

Strategies are much more than plans to achieve goals. They differ from
operating procedures because they are drawn from changing market
situations and are thus live and dynamic. The term ‘market’ refers to all actual
and potential buyers of a product or service, who possess purchasing power,
authority and willingness to purchase. The global pharmaceutical market is
currently estimated to be over US$ 400 bn and is projected to grow at about 5
per cent per annum over the next few years. Due to the rapid growth of the
pharmaceutical industry, marketing has also become an important
determinant of the survival and growth of various pharmaceutical companies,
amidst the increasing competition faced by them.

The marketing strategies that are employed by pharmaceutical firms can be

broadly classified into two types as follows:

 Promotional strategies

33
 Defense strategies

1) Promotional strategies

 Co-marketing: While co-marketing is a new concept all over the world,

it started in a nascent form even before the 1970s in India. Co-
marketing strategy enables organizations to focus more on market
reach, penetration and brand share. The ultimate objective of such
approaches is to develop brand image and brand equity. Unichem
promoted Saffola oil (of Bombay Oil Mills) to cardiologists as a part of
their promotional strategy. Later on, as the advantages become
apparent, companies like Johnson & Johnson and Wipro used this
strategy to promote their baby care products to doctors.

 Brand image marketing: Pharmaceutical companies identify and build

their strength by calibrated strategy to ensure that doctors and
customers see them in favorable light. Research reveals that there is a
direct relationship between a brand’s awareness level, its image and its
market share. Thus, companies now a days are adapting this strategy
of improving the brand image, which in turn improves their sales and
profitability.

 Seven steps to a better brand image: Most of the pharmaceutical

companies are concentrating on this strategy to nurture the image of
the company and in turn market their products successfully. The type
of image, a company wants to brandish, can be furnished with the
following seven steps.

Play host: In this, a small group of doctors is invited and briefed whenever
a new brand is introduced. Earlier, unique has used this strategy to a good
effect for Metrogyl remains a market leader even in the wake of new
molecule.

Respect doctors’ schedules and get to the point straightway. Also make
the presentation brief and memorable.

34
Be factual: Factual and realistic information is effective. Case studies,
clinical trials, promotional trials, cure rate of drugs and side effects all need
to be collected and documented properly to create a favourable
perception.

Maintain respect: A conversation followed by a thank you note is usually

adequate. Medical representatives and managers need to be trained
accordingly to create a favourable impression.

Be brief and subtle: Initially to create perceptions and awareness about a

company, information should be given in encapsulated form so that the
customer is not burdened with more information.

Identify your uniqueness: The overall strategy may include an advertising

or a public relations agency handling everything.

Develop field staff to maintain quality standards

 The right media mix strategy - The right media mix, utilized by the
company, can promote its products considerably. The various
promotional media used are:

Medical magazines and Journals (Physician’s Digest, Lancet, Headache,

Drug Today, CIMS, MIMS, IDR etc)

Conferences, Seminars and Symposia

Promotional trials

Newspaper advertising

Free-standing supplements

Conference videos

Video messages

 Marketing strategy based on innovative distribution- In 2005, the

marketing strategy of the pharmaceutical company Sandoz included
change in method of giving discounts to carrying & forwarding agents

35
 (C&FAs) through a simple innovation. Instead of paying direct
percentage on sales to C&FAs, it started paying on the basis of case
lots. Each case lot weighed approximately 12-15 kg and on each case
lot, Rs 8-10 was paid to the C&FA.

Table: Major alliances between Indian & International companies:

International Place of
No. Indian Company Objective
Partner Operation
1 Cipla Novopharm Marketing International
2 Dr. Reddys’ Biomed Marketing International
3 Lupin Labs Fujisawa, Merck, Marketing & International
  Global Corp. Manufacturing  
Marketing,
4 Ranbaxy Elililly, Aventis, International
Supply
of Both bulk
  Glaxo & in India
drugs
SmithKline
5 Knoll, Glaxo Marketing India
Beecham
6 Panacea Biotec Chiron Marketing India

As a result, the company not only improved the sales of its products, but also
managed to reduce the cost of operations by 1.2 per cent of its total turnover.

Public relations consultancies (PRCs)- an important part of marketing

strategies: Most of the pharmaceutical companies in India and abroad are
nowadays hiring the services of PRCs as part of their marketing strategies.
Public relations cover a broad spectrum of activities — from internal
communication to external publicity and also financial reporting. The major
task of PRCs is to build a one-to-one, positive, effective, motivating and self-
assuring relationship with the consumer through mass or individual media. It
encompasses brochures, industry booklets, mailings, catalogues, corporate
communication devices and websites. All of these have their importance as
marketing tools.

36
  Contract Sales Organizations (CSOs)- A strategic Marketing Tool:
Pharmaceutical companies are using the services of CSOs as strategic
weapon for increasing the geographical coverage of their products, as
well as to have competitive edge at key moments.

Advantages of CSOs are:

Minimized fixed overheads

Managed resources at the launch of new product

Increased sales force whenever need arises. For e.g., when a brand is
under threat from the competitor

Provide creative, short-term brand resources

Help in providing market development initiatives

Allow companies to economically reach physicians they would not

ordinarily be able to call on, providing additional sales coverage tailored to
a specific need

Entering into alliances, acquisitions, mergers & joint ventures with MNCs to
market and sell their products: The reach of marketing and distribution
network is an important determinant of success in the pharmaceutical
industry. Hence, as an important marketing strategy, companies are
strengthening their marketing and distribution network and thus improving
their reach and efficacy.

A way to do this is to enter into alliances and joint ventures with other
companies. Nicholas Piramal is the prime example of a company that has
entered into a number of alliances with MNCs to market its product.

 Direct-to-Consumer (DTC) marketing strategy - This is recent approach

which has been used by various pharmaceutical companies mainly
abroad (USA and UK). USA has pioneered DTC advertising. The
reason DTC has become an area of interest over the last few years, is
that it is a way of influencing people who actually use the medicine.

37
DTC essentially means a campaign or communication programme intended
for and targeted to consumers. In relation to pharmaceutical products, the
consumers may be patient or family members, caregivers or the general
public. Initially, doctors were worried about the patients failing to understand
the drug related information and impairment of doctor /patient relationship, but
DTC did not lead to any such apprehensions and is now a mainstay of
product promotion in the US.

Internet has totally rejuvenated direct marketing and DTC as a promotional

medium. Resources like Euro RSCG’ s Media Turf’s online tracking can help
track individual doctors online, which is immensely useful for pharma
companies to deliver targeted communication to them.

1. MOBILE HEALTHCARE UNIT PROGRAMME: Mobile

Healthcare Unit (MHU) programme provides basic healthcare
services at the doorstep of communities residing in remote,
underserved and unreached areas. Our MHU van is equipped
with common medicines, First-aid materials and basic diagnostic
equipment. The main aim of MHU is to provide services under
different thematic areas such as Maternal Health, Neonatal and
Infant Health, Child and Adolescent health, Reproductive Health
and Contraceptive Services, Prevention and control of
Communicable and Non-Communicable diseases. MHU vans
are covering 186 villages of Halol, Panoli, Karkhadi, Ankleshwar,
Mohali, Toansa, Paonta Sahib, Dewas, Malanpur, Ahmednagar,
and Madurantakam and work in close co-ordination with
Government’s Health Department. During the FY 19-20, our
MHUs has benefitted 144,343 patients by way of Clinical
treatment and 65,382 villagers through Preventive & Promotive
healthcare with an investment of `24.53 Million.

2. EDUCATION PROGRAMME: Sun Pharma has initiated

Education Programme to improve the educational standards in
identified schools under the Model School Development Project.
This is a rolling-year project to develop identified schools as a

38
 Model School and to upgrade educational facilities such as
Infrastructure Up-gradation, digital classroom, Provision of
potable drinking water for the students, distribution of stationary
items, book donation, celebration of school-based activities etc.
Main Objective is to inculcate interest amongst students to
increase attendance rate and reducing drop-out rates in schools.
The following projects were carried out during FY 19-20. -
Construction of two school classrooms at Ahmednagar
(Maharashtra) - Installation of solar roof-top grid in Govt. school
at Ahmednagar (Maharashtra) - Digital Classroom in 4
Government schools of Halol and Karkhadi in Gujarat and
Madurantakam in Tamilnadu. - Remedial Classes for Students
of 12th std., Halol, Gujarat

3. NAVYA ONLINE EXPERT OPINION SERVICE PROJECT: Sun

Pharma has sponsored 500 cancer patients to receive expert
opinions online from Tata Memorial Centre-Navya. This is an
Expert Opinion Service, which is an online platform to provide a
second opinion of oncologists to cancer patients with an
objective to provide quick and early treatment plans for the
individuals which can significantly improve the health outcome.
These patients would not have otherwise had access to, or been
able to afford, high-quality expert treatment plans to improve
their chances of cure. Navya Network provides expert opinions
to cancer patient with an objective to impart low cost and
effective treatment decisions while saving healthcare costs of
the individual. The project hasbenefitted 100 socio-economically
disadvantaged patients (up to March end) all over India with
leading cancer specialists at Tata Memorial Center and other
expert centers through the investment of `4.25 Million during FY
19-20.

4. PROMOTION OF SCIENTIFIC MEDICAL & PHARMA

RESEARCH OUTCOMES FOR PUBLIC HEALTH
IMPROVEMENT: The project focused upon promotion and

39
 awareness of latest medical and pharmaceutical research
outcomes, subject updates and all related development focused
upon National Public Health Concerns for humanitarian causes
and benefits by organising seminar, symposia and rewarding
excellence in pharmaceutical research. During FY 19-20, 153
people were benefitted under this programme. The company
has spent `2.55 Million during the FY 19-20.

5. . RURAL DEVELOPMENT PROGRAMME: Sun Pharma has

been working towards development of basic infrastructural
development in rural areas under Rural Development
Programme. This project has benefitted neighbouring
communities through various projects such as Construction of
Mini water tanks, Installation of solar street lights, Construction
of cattle trough and cloth washing station, Maintenance of
cricket playground, Construction of Anganwadi center, Setting-
up Traffic Blinkers, Construction of community hall. 1070
Households have been benefitted under various Infrastructure
development work in villages. Furthermore, 165 women &
children have been benefitted through Anganwadi Development
Project under this programme. The company has invested `2.21
Million during the FY 19-20.

6. SCHOOL TOILET CONSTRUCTION PROJECT: Sun Pharma

believes that quality education can happen in a clean and
healthy environment. The ‘Swachh Bharat, Swachh Vidyalaya
Abhiyan’, launched by the Government aims to improve hygiene
and sanitation across schools through improved water and
sanitation facilities. In this financial year, company has
constructed Toilet Block facilities for girl students in rural
schools. The main objective of the project was: - To inculcate
healthy and hygienic behaviour in girl students. - To reduce the
drop-out rate among girl students. - To create awareness
regarding use of toilets by promoting good sanitation practices,
etc. - To improve hygiene and ensure safety of girl student. The

40
 project was implemented in five Government schools based at
Halol (Gujarat) and one Govt. School based at Ahmednagar
(Maharashtra). The project has

7. ENVIRONMENT CONSERVATION PROGRAMME:

Environment Conservation Programme, focused upon Greenbelt
development towards environment sustainability and awareness
generation in schools and communities for sensitizing people
towards importance and conservation of environment. The
following activities were implemented under Environment
Conservation Programme: - Awareness generation was
conducted in Mohali (Punjab) and Paonta Sahib (Himachal
Pradesh) under “Say No to Plastic” and cloth and jute bags were
distributed in the community. - Plantation of saplings and its
maintenance work at Vadodara (Gujarat), Ahmednagar
(Maharashtra), Panoli (Gujarat) and Madurantakam (Tamilnadu)
to ensure environment conservation. The programme involved
an investment of `1.16 Million during the FY 19-20.

8. HEALTHCARE PROGRAMME: The Company has been

implementing different healthcare programmes for benefit
towards humanitarian causes. Following key projects were
identified and implemented in different areas of Maharashtra,
Gujarat and Punjab: a) Kidney Dialysis treatment: The Company
has supported Kidney dialysis treatment of poor patients. During
the year, the project has benefitted 204 patients from Gujarat
and Maharashtra. b) Support in Establishment of X-Ray Centre:
The project was implemented at Vadodara (Gujarat). The
Company has supported establishment of X-ray Centre in a
Charitable Hospital for treatment of underprivileged community.
The project has benefitted more than 2000 poor and deprived
patients in the area. c) Blood Donation: Support to local blood
bank society at Vadodara, Gujarat for promoting blood donation
for people in need. d) Maintenance of Subsidiary Health Centre:
The Company has renovated and maintaining a dispensary in

41
 Toansa (Punjab), which covers population of nearby three
villages Bholewal, Toansa and Railmajra in Punjab. The project
aims at delivering primary healthcare services, provision of
medicines, medical camps and awareness generation
programmes.

9. SANITATION PROGRAMME: Sun Pharma has implemented

this project with an objective to promote better health, hygiene
and improve quality of life of rural communities. The main focus
of this project is to construct Individual household toilet blocks
and to conduct IEC activities regarding awareness of good
sanitation practices. During last five years, Sun Pharma has
facilitated construction of more than 1800 Individual Toilet
Blocks and mobilised Local Gram Panchayat to extend water
facilities to use these toilets in proper manner. With the support
of all local bodies and Government Authorities, Sun Pharma has
made 13 villages ODF during last 5 years. During the financial
year 19-20, the Company has benefitted 60 rural households
from Madurantakam, Tamilnadu by investing `0.49 Million in this
programme.

10. DRINKING WATER PROJECT: Sun Pharma has been

supporting towards provision of safe and potable drinking water
to reduce waterborne diseases and also to bring about health
improvement in communities living in rural areas of Ahmednagar
(Maharashtra), Toansa (Punjab) and Paonta (Himachal
Pradesh). The Company has provided water storage tanks at
Ahmednagar, whereas, deep bore-well based drinking water
supply system is being maintained at Toansa throughout the
year. Further, drinking water supply system has been renovated
and restored at Paonta (Himachal Pradesh) under this
programme. The project is benefitting 2263 households with an
investment of `0.32 Million during the FY 19-20.

42
 11. WATER CONSERVATION PROJECT: The Projects have
been supported in view of water scarcity in our rural areas. The
main objective of the project is to harvest rain water for onward
use by the community. Sun Pharma has facilitated development
of rain water harvesting system in all public buildings in the
Karunkuzhi Panchayat at Madurantakam (Tamilnadu) by
providing plastic drums to install cost effective RWH system. A
potential water reservoir was cleaned for capacity enhancement
and at Karkhadi (Gujarat). The project has benefitted more than
10,000 households and community at large with an investment
of `0.31 Million during the FY 19-20.

12. CHILDREN EYE HEALTH INITIATIVE PROJECT: Keeping

in view that one in every four school-going student is suffering
from refractive error and has some kind of vision problem,
consequently, Children Eye Health Initiative project was initiated
to implement in identified schools. The main focus of the project
is to conduct basic eye health screening of students and
providing them free spectacles to students suffering with any
kind of refractive error. During the last financial year, screening
of total 1786 students was completed, out of which 602 students
were identified with low vision and were provided with ready-
made and tailor-made spectacles. The project involves an
investment of `0.13 Million during the FY 19-20.

13. DISASTER RELIEF PROGRAMME (COVID-19): The

outbreak of Coronavirus disease has been declared as world
pandemic by WHO in March ’20. Therefore, creating awareness
amongst local people to adapt measures to prevent spread of
coronavirus became key priority of the Company. Along with
awareness generation programme, the Company has distributed
food packets in rural communities of Madurantakam, Tamilnadu.
The Company has invested `0.06 Million during the FY 19-20.
CSR Awards and Accolades received during the year: 1. ACEF
Asian Leadership Forum and Awards: September 28, 2019 Sun

43
 Pharma’s CSR project, Mobile Healthcare Unit was recognised
as the Best Public Health Initiative by ACEF Asian Leadership
Forum. 2. CSR Leadership Award: October 15, 2019 Sun
Pharma was conferred upon “Excellent CSR Interface Award” at
2nd National CSR Leadership Summit and Awards 2019
organised by CMAI. 3. Best CSR Award: February 29, 2020 Sun
Pharma was conferred upon “Best CSR Award” under large
scale CSR category at Amity CSR Conclave 2020. 4. India
Pharma Best Corporate Social Responsibility Programme of the
year Award: March 5, 2020 Sun Pharma won “India Pharma
Corporate Social Responsibility Programme of the year Award”
at Gandhinagar on March 5, 2020.

2) Defense Strategies

Besides promotional strategies, a number of defense strategies have also

been used by various pharmaceutical companies to market, promote & extend
the life cycle of their products.

These are:

New Indications or Uses of the Product: In US, a new indication can extend a
product’s protected life as the market exclusivity period is extended by three
years for each new indication. Often, companies more important indications
during the launch of the product & less important indications are introduced
when product is at decline stage in its life cycle. E.g., Lovenox, a product for
curing thrombosis was launched with one indication in orthopedic surgery by
Aventis. Currently, it has eight indications. By revealing more & more
indications of the same drug, the company has more than doubled its original
peak sales for this drug.

 Reformulation - A similar strategy to gaining new indications is to

produce a new formulation on an existing marketed drug. This line
extension will often be associated with a more convenient dosing form
or a longer lasting formulation. This strategy is most commonly used
where old technology is an immediate-release formulation requiring

44
 multiple daily doses is replaced by a ’new technology’ once daily
formulation of the drug.

Pfizer defended its hypertensive drug - Procardia for a number of years with
this strategy.

 Switching Strategy - This strategy relies on moving patients from an

older drug (whose patent is about to run out) on to the newer version
(which has patent protection). The theory is that by the times generics
of the original drug hit the market after its patent has expired, patients
have already been switched to newer drug and are unlikely to switch
back to the older, now generic drug. Pfizer successfully used this
strategy to switch patients on to Procardia XR from its original drug
Procardia near the time, when Procardia’s patent was about to expire.

 Paying generic companies off - A dubious strategy of paying generic

makers to delay them from entering the market has also been used.
E.g., Hoechst Marion Roussel (now part of Aventis) paid André US$ 10
million per quarter not to launch its generic version of Cardizem.

As a consequence of the mounting evidence of counterfeiting in Asia,

companies in India and abroad are hiring services of institutes such as
’Pharmaceutical Security Institute’.

Counterfeit medicine is a product that is deliberately mislabeled with respect

to identity and/or source. Such medicines can affect the company’s image.
Therefore, companies are hiring the services of various agencies to check this
grey marketing.

It can thus be concluded that the key determinants of success of any

Pharmaceutical industry, besides the cost and availability of capital are brand
building (or brand Strength) and marketing strategies adopted by them as
these have a profound impact on growth and market share of all
pharmaceutical companies.

45
GLOBAL TRENDS IN PHARMA PROMOTIONS & MARKETING

Pharma’s Current Model

As the Verispan promotional audit data show, pharmaceutical companies
spend a disproportionate amount of their promotional budgets on face-to-face
detailing. The $11.2 billion does not even include the cost of samples! In
contrast, the amount spent on ePromotion is minuscule.

For every 100 sales rep visits to physician offices, only 56 actually see the
physician and of these 27 merely drop off samples without talking to the
physician. Schecter claims that when reps actually get to talk to physicians,
the call only lasts 4.6 minutes on average.

46
 Reduction in U.S. Primary care promotional spending

Given these statistics, Schechter said Merck is on course to significantly

reduce its promotional spend by 2010 and estimates it will cut its field force
spending by 9% in 2007 (see figure at left; which shows that the field force bar
is lower in 2007 than in 2005.). According to PharmExec.com, however,
"Merck spokeswoman Amy Rose wasn't having any of it [talk about a 9%
reduction in detailing]." "This is not a head-count reduction," said Rose. "Our
new model calls for an increased use of technology [and metrics], and it is
much more customer-focused."

STRENGTHS AND WEAKNESSES OF INDIA’S PHARMACEUTICAL

INDUSTRY:

India’s comparative advantages lie in its cost competitiveness, its reverse

engineering experience, its large pool of less expensive English-speaking
scientific and engineering workers, and its well-developed chemical industry
infrastructure. India’s pharmaceutical companies can also operate at much
lower profit margins that their Western counterparts. Today, India produces
some of the cheapest drugs in the world, especially because labor costs are
50 to 55 percent cheaper than in the West. Industry experts indicate that
infrastructure costs are 40 percent lower and fixed cost are estimated to be 12
percent to 20 percent less that in the United States and Western Europe.
Consequently, India can produce bulk drugs that cost 60 percent less that in
the West and can open a production plant in India 40 percent cheaper than in
developed countries. Because of this, India has become a hub for
pharmaceutical research and development and clinical trials for many leading
foreign pharmaceutical companies.

47
 Strengths and weaknesses of India’s pharmaceutical industry

The challenge facing pharmaceutical marketers in the next decade will be to

demonstrate value of product through promotional innovation, combined with
the required emphasis on efficiency and safety of their product. To do so, they
should turn to pharma co-economics an evolving field that examines the
issues in the context of the market's health care system. Health care system,
of what is understood of the term, differs from country to country, place to
place and city to city. Lay persons in India tend to examine only single patient
cost. But from a social perspective one may want to know what sort of
treatment option minimizes overall costs. In the future the degree of
fragmentation is likely to decline significantly wide product portfolio and
distribution strength could become a key competitive advantage among the
larger players. Smaller players focused on research and development will
probably be approached for alliance by larger companies. Domestic
companies with International research and development or marketing ties are
likely to succeed. In long term as companies established major presence in
other parts of wider health care pharmaceuticals chain, there is likely to e an
emergence of a new set of competitors -- the integrated health care firms --
that will have significantly greater power than pure pharmaceutical
companies.

48
 CHAPTER – 3
METHODOLOGY &
PROCEDURE OF WORK

49
METHODOLOGY & PROCEDURE OF WORK
A Research Methodology defines the purpose of the research, how it
proceeds, how to measure progress and what constitute success with respect
to the objectives determined for carrying out the research study. The
appropriate research design formulated is detailed below.

Exploratory research: this kind of research has the primary objective of

development of insights into the problem. It studies the main area where the
problem lies and also tries to evaluate some appropriate courses of action.
The research methodology for the present study has been adopted to reflect
these realties and help reach the logical conclusion in an objective and
scientific manner. The present study contemplated an exploratory research.

Research Design

The research design is the basic framework, which provides guidelines for the
rest of the research process. The present research can be said to be
exploratory. The research design determines the direction of the study
throughout and the procedures to be followed. It determines the data
collection method, sampling method, the fieldwork and so on.

 Nature of Data

1) Primary Data: Primary data is basically fresh data collected

directly from the target respondents; it could be collected through
Questionnaire Surveys, Interviews, Focus Group Discussions Etc.

2) Secondary Data: Secondary data that is already available and

published. It could be internal and external source of data. Internal
source: which originates from the specific field or area where research
is carried out e.g. publish broachers, official reports , sun pharma
official website, etc.

50
 3) External Source: This originates outside the field of study like
books, periodicals, journals, newspapers and the Internet.

 Data Collection

1) Primary data: Primary data was selected from the sample by a

self-administrated questionnaire .

SAMPLE SIZE:
Sample size : 100
Sample area : Aurangabad and bed
Sample Unit : Officials of many pharmaceutical companies,
medical
practitioners, medical representatives, pharma
distributors and workers,medical owners .

2) Secondary Data: Secondary data was collected through

Articles,
Reports,
Journals,
Magazines,
Newspapers and
Internet

 Sampling Technique

Random sampling technique is generally employed to extract the fruitful

results. This includes the overall design, the sampling procedure, the data
collection methods, the field methods and the analysis procedures

 Sampling Procedure Actually Employed:

51
The process employed to select the sample was simple random sampling.
Simple random sampling refers to that sampling technique in which each and
every unit of the population has an equal and same opportunity of being on
the sample. In simple random sampling, which item gets selected is just a
matter of chance.

 Analytical Tools:

Simple statistical tools have been used in the present study to analyze and
interpret the data collected from the field. The study has used percentiles
method and the data are presented in the form of tables and diagrams.

52
 CHAPTER – 4
ANALYSIS OF DATA

53
 DATA ANALYSIS

1. For how many years you are practicing as a medical practicener

(Doctor)?
 Less than one year ---------------------------------- 17 per
cent
 From one to five years ----------------------------- 32 per
cent
 Five to Ten years ----------------------------------- 36 per
cent
 More than Ten years ------------------------------- 12 per
cent
 Cannot remember --------------------------------- 03 per cent

Fig 1: Practicing as a medical practitioner

Interpretation:

54
 At the initial stage of the research, an attempt was made to understand
the profile of the doctors in terms of their experience in the industry.
Great care was taken to ensure that the sample is adequate and
representative of the universe.
2. Do you agree that India’s pharmaceutical industry is one of the
fastest growing segments of the Indian economy?
 Agree -------------------------------------- 43 per cent
 Strongly Agree --------------------------- 37 per cent
 Disagree ---------------------------------- 09 per cent
 Strongly Disagree ----------------------- 04 per cent
 Do not know/ Cannot say ------------- 07 per cent

Fig 2: The fastest growing segments of the Indian economy

Interpretation:
India’s pharmaceutical industry is one of the fastest growing segments
of the Indian economy and this is also one of the vital industrial
segments which are directly related to the health of the nation.

55
3. Do you agree that the marketing strategy of the pharmaceutical
industry should be different from the marketing strategy in non-
pharmaceutical segments?
 Agree ------------------------------------ 50 per cent
 Strongly Agree ------------------------- 32 per cent
 Disagree -------------------------------- 10 per cent
 Strongly Disagree -------------------- 04 per cent
 Do not know/ Cannot say ---------- 04 per cent

Fig 3: Pharmaceutical segments

Interpretation:
The structure and the dynamics of the pharmaceutical industry are
different from that of other industrial domains. This is what necessitates
the pharmaceutical sector to formulate a unique marketing strategy to
suit their industry requirements and that appears to be different, in
practice and normative sphere, from other industries.

56
4. Do you agree that institutional selling is quite prevalent when it
comes to pharmaceutical market in India?
 Agree ------------------------------------- 44 per cent
 Strongly Agree ------------------------- 30 per cent
 Disagree -------------------------------- 10 per cent
 Strongly Disagree --------------------- 06 per cent
 Do not know/ Cannot say ------------ 10 per cent

Fig 4: Pharmaceutical market in India

Interpretation:
In general, business in pharmaceutical market is conducted in two
major ways, that is, either by institutional selling or through trade
business. The respondents were of the opinion that institutional selling
is quite prevalent in the Indian pharmaceutical industry.

57
 5. Do you agree that the pharmaceutical companies need to use
innovative and better promotional measures for selling their
products?
 Agree -------------------------------------- 60 per cent
 Strongly Agree --------------------------- 37 per cent
 Disagree ---------------------------------- 01 per cent
 Strongly Disagree ----------------------- 00 per cent
 Do not know/ Cannot say ------------- 02 per cent

Fig 5: Innovative and better promotional measures for selling their products
Interpretation:
Even though it appears to be a serious industry on which the health of
the nation rests, a deeper understanding of the industry will make it
clear that business practices and sales promotion measures are a
common thing and gradually becoming more aggressive and
competitive among the pharmaceutical companies in India.

58
6. Do the Pharmaceutical companies offer gifts to the doctors to
influence their prescriptions in favour of their company
medicines?
 Yes -------------------------------------------- 95 per cent
 No --------------------------------------------- 01 per cent
 Do not know/ Cannot say ----------------- 04 per cent

Fig 6: Prescriptions in favour of their company medicines

Interpretation:
Pharmaceutical marketing experts are aware that well timed advertising
directed to doctors tends to boost sales of the brand that spent the
marketing dollars. In the case of marketing directly to health professionals,
the question is whether promotion is (as most drug companies claim)
primarily information on how the drug works or is intended to persuade
doctors to prescribe the drug more frequently. The practice of offering gifts

59
to the doctors to influence their prescriptions is a common strategy among
the pharmaceutical companies.

60
7. Out of the following which one is more correct when it comes to
the promotional strategy of pharmaceutical companies in the view
of the doctors?
 They aim to inform about the product ----------------- 22 per cent
 They aim to persuade to purchase ---------------------60 per cent
 Other motives -------------------------------------------- 03 per cent
 Do not know/ Cannot say ----------------------------- 15 per cent

Fig 7: Promotional strategy of pharmaceutical companies

Interpretation:
The promotional strategy of the pharmaceutical companies is more
oriented towards persuading the doctors to prescribe their products and
the patients to purchase their products than simply to display information
on the quality and availability of the product. This is one criterion which
makes the marketing strategy of the pharmaceutical companies different
from that of others.

61
8. Do you agree that unethical standards exist in the promotion of
pharmaceutical products in India?
 Agree ------------------------------------- 52 per cent
 Strongly Agree ------------------------- 20 per cent
 Disagree -------------------------------- 20 per cent
 Strongly Disagree --------------------- 03 per cent
 Do not know/ Cannot say ------------ 05 per cent

Fig 8: Promotion of pharmaceutical products in India

Interpretation:
Adherence to ethical standards while pursuing the promotional strategy for
selling their products is a concern in the pharmaceutical industry. It is an
accepted fact that the promotional measures do contain unethical
practices. It is for the government, the industry and the consumers to put a
comprehensive effort to ensure that the practices of unethical standards
are withdrawn from the health industry.

62
9. Your recommendation to the industry and government regarding
the promotional strategy of the pharmaceutical companies? You
can choose more than one option.
 Implement, improve and monitor legislation ----------------- 74 per
cent
 Measures to improve the transparency of drug companies’
marketing activities ---------------------------------------------- 86 per cent
 Stop the practice of gifts to doctors ----------------------------- 67 per
cent
 Ensure codes of conduct on drug promotion ------------------- 70 per
cent
 Other measures ----------------------------------------------------- 12 per
cent
 Do not know/ Cannot say ---------------------------------------- 01 per cent

Fig 9: The industry and government regarding

Interpretation:

Whilst the pharmaceutical industry clearly has an important role to play in

tackling the health challenges their involvement in the promotion of
medicines presents a serious conflict of interest. It is equally important that

63
 health professionals have access to independent and up to date advice on
medicines so that they can make informed judgments about the most
appropriate medication for patients.
10. Do you think that the entry of Multinationals is a Major Challenge
to the domestic Players in the Pharmaceutical Market and are they
ready to face the Challenges of the Foreign Players?
 Yes ----------------------------------------------- 36 per cent
 No ------------------------------------------------ 54 per cent
 Do not know/ Cannot say--------------------- 10 per cent

Fig 10: The Challenges of the Foreign Players

64
11. What type of Marketing Strategy would you prefer to expand your
Market size?

Fig 11: Market size

 B2B-------------------------------------------------------------- 23 PER CENT
 B2C -------------------------------------------------------------32 per cent
 Both -------------------------------------------------------------45 percent

65
12. What type of Marketing Strategy does you as More Profitable?

Fig 12: More Profitable

 B2B-------------------------------------------------------------- 24 per cent
 B2C ------------------------------------------------------------- 47 per cent
 Both ------------------------------------------------------------- 31 percent

66
13. What do you think is the Major challenge from the Marketing point
of view for the Pharmaceutical Industry in India?
 Fragmentation of the market ---------------------------- 38 per cent
 Market risk due to lack of price control mechanism- 22 per
cent
 MNCs ------------------------------------------------------ 23 per cent
 Others ------------------------------------------------------ 17 per cent

Fig 13: Major challenge from the Marketing

67
14. What innovative distribution channel do you suggest to better
market your products?
 Better consumer supply chain---------------------------------------------34 per
cent
 Emotional Branding ------------------------------------------------------- 42
per cent
 Alliance with other corporate leaders for promotion of the product-12
per cent
 Greater media participation and power branding-----------------------10
per cent
 Others ------------------------------------------------------------------------ 02 per
cent

68
Fig 14: Suggest to better market your products

69
15. Are you aware that the pharmaceutical companies in India are
shifting their focus from conventional method of marketing to
non-conventional method of marketing?

 Yes -------------------------------------------- 86 percent

 No --------------------------------------------- 05 percent

 Do not know/ Cannot say------------------09 per cent

Fig 15: The pharmaceutical companies in India are shifting their focus from
conventional method of marketing

70
16. Do you think that market ethics/ medical Ethics are a major factor
in the new distribution channel of marketing?
 Yes ----------------------------------------------------- 57 per cent
 No ----------------------------------------------------- 28 per cent
 Do not know/ Cannot say -------------------------- 15 per cent

Fig 16: Distribution channel of marketing

71
17. Do You Think That These Non-Conventional Marketing Methods
Are Effective Methods of Pharma Marketing In The Present Age?

 Yes -----------------------------------------------77 percent

 No ------------------------------------------------12 percent

 Do not know/ Cannot say--------------------11 per cent

Fig 17: Pharma Marketing in the Present Age

72
18. Do you believe that technology utilization and innovative
distribution channels will help in marketing of Pharma products in
India?

 Yes------------------------------------------ 75 per cent

 No------------------------------------------- 07 percent
 Do not know/ Cannot say--------------- 18 per cent

Fig 18: Distribution channels will help in marketing of Pharma products in

India

73
19. Major weakness of the pharmaceutical industry’s marketing
strategy.
 Branding --------------------------------- 07 per cent

 Publicity --------------------------------- 09 percent

 R&D ------------------------------------- 77 percent

 Do not know / Cannot say ------------ 07 per cent

Fig 19: Major weakness of the pharmaceutical industry’s

74
20. Do you follow branding of products as a marketing strategy?
 Yes ----------------------------------------------------------------------- 74
percent
 No ------------------------------------------------------------------------ 05
percent
 Do not know/ Cannot say -------------------------------------------- 21
percent

Fig 20: Products as a marketing strategy

75
21. Do you have a dealer network? Do you sell directly or through
dealers?

As regards their marketing strategy, it could be derived from their

responses that they have a large dealer network. A customer may also
contact their branch office in his/her area to get the names and
addresses. They can also supply sections directly. For smaller lots, the
traders/ dealers may be contacted.

22. Do you think that foreign direct investment (FDI) should be

allowed in the pharmaceutical sector in India?

 Yes------------------------------------------------- 21 percent

 No-------------------------------------------------- 43 percent

 Do not know/ Cannot say----------------------- 36 percent

Fig 20: Pharmaceutical sector in India

76
FINDINGS, INFERENCES &
RECOMMENDATIONS

77
FINDINGS, INFERENCES & RECOMMENDATIONS

Evolving Universe of Sun Pharma Sun Pharmaceutical Industries Ltd.,

together with all its subsidiaries (Sun Pharma), is a globally acclaimed
specialty generics pharmaceutical company. The Company, along with its
subsidiaries and associates, continues to strengthen its market position
despite macro-economic headwinds and industry challenges. A vertically
integrated business and a team of highly skilled employees enable it to deliver
quality products at affordable prices, and be trusted by customers and
patients in over 100 countries (comprising branded and generic markets). The
Company has capabilities to manufacture a variety of dosage forms, such as
injectables, sprays, ointments, creams, liquids, drug delivery systems, tablets
and capsules. The Company’s growing presence is supported by
manufacturing facilities across 6 continents. The facilities are approved by
multiple global regulatory authorities and run by a multi-cultural workforce
comprising 50+ nationalities. The Company fosters excellence through
innovation, supported by strong Research & Development (R&D) capabilities
across units, with ~6% of annual revenue being invested in R&D. Sun Pharma
is focused on improving efficiencies, cash flows and cost structure to ensure
profitable and sustainable growth coupled with reasonable returns. At the
same time, it continues its unwavering efforts on building its global specialty
business.

India's pharmaceutical market currently stands ninth in the world market for
pharmaceuticals with a 1.5% share. The market was valued at more than $3
billion last year (1998). At its annual growth rate of 15% (almost double the
world's 6% annual growth rate), this market is expected to reach $6 billion by
2001 and should more than double to $13.3 billion in 2006. India's official
OTC market currently stands at over $130 million, and the industry's heart
disease sector is expected to grow from $90 million now to more than $350
million in 2009.

78
Current demand in the Indian pharmaceutical sector stands at about $4 to $5
billion, and is forecast to increase at an annual rate of 15 - 20% in the future.
Nevertheless, average per capita expenditure on pharmaceuticals in India is
only $3 -- compared to $412 in Japan, $222 in Germany and $191 in the US.
This is due in part to the prevalence of alternative healing methods in India,
such as ayurvedic medicine and homeopathy, but also because prices for
drugs have been kept artificially low by the Indian government. In fact, India's
pharmaceutical industry is one of the most highly regulated industries in the
country. Price controls have a strong effect on profitability in the industry, and
weak patent protection poses a long-term threat to investment in India's drug
market. Foreign firms also find it difficult to operate in India due to arbitrary
Bureau of Industrial Cost and Pricing (BICP) pricing changes, arbitrary local
FDA decisions, high import duties (about 42%) and complex import
procedures.

However, while the pharmaceutical sectors in India will most likely stay
regulated in the short term, there are plans for reform. The sheer size and
growth of India's domestic pharmaceutical industry is making it increasingly
difficult for the government to regulate prices for every single firm, and
pressure from the World Trade Organization is also speeding up discussions
within the national government to improve patent protection. As a result,
foreign pharmaceutical firms can expect improved market opportunities in
India's enormous drug market over next several years.

The Indian pharmaceutical industry is highly fragmented -- there are now

more than 20,000 domestic manufacturers of end-use pharmaceuticals,
particularly because of the industry's low capital requirement and the lack of
product patents. Only about 300 of these are in the organized sector. This
structure causes intense competition, especially in the bulk drug markets, with
profitability falling as demand expands.

For value purposes, drugs in India are generally classified into two categories
-- bulk drugs and formulations. Due to India's low overhead costs, bulk drugs
comprise the largest sector in the country's pharmaceutical market. India’s
bulk drug sector also makes up about 6% of the international bulk drug

79
market. Drug intermediates are used as raw materials for the production of
bulk drugs, which are either sold directly or retained by companies for the
production of formulations. Formulations can be subdivided into generic drugs
and branded or "ethical" drugs, the latter of which are made under process
patent and sold under a separate brand name. Expected short-term growth for
the two types of drugs has been 20% for bulk drugs and 15% for formulations.

The import of finished pharmaceuticals is almost negligible, and confined to

very specific types like anti-cancer drugs. In 1994, the import of drugs,
pharmaceuticals and intermediates was estimated at $450 million, and
included the following: antibiotics, penicillin and its salts, erythromycin and its
preparations, vitamins and provitamins, vaccines (polio, human and
veterinary), preparations containing insulin, caustic and other hormones, and
tetracycline and its preparations.

Essential drugs comprised of antibiotics, antibacterial, anti-TB, anti-parasitic,

and cardiovascular constitute a major portion of turnover of the industry.
Indian companies dominate this class of drugs with a market share of 71%.
Multinational companies are reluctant to enter these markets as most of them
are under government price controls.

Pharmaceutical Industry is one of the most intense knowledge driven industry,

which is continuously in a state of dynamic transition. Indian pharmaceutical
industry is climbing up the value chain from bringing a pure reverse
engineering industry focus on domestic market. The industry is moving
towards basic research driven expert oriented global presence and providing
wide range of value added quality product and services. The pharmacy
formulation market varies radically from the consumer market in many ways.
The rules governing the pharmacy market are different except a few over-the-
counter (OTC) drugs. Pharma companies are not allowed to publicly market
their products. Marketing has to be restricted to promotional campaigns,
advertisement only in medicinal magazines, journals etc., through medical
representatives. It is not a mean of mass communication, which is usually
applicable to consumer products. In the process of pharmaceutical marketing,

80
market segmentation, targeting and brand differentiation is considered to be
challenging compared to the consumer marketing.

Unlike any other businesses, marketing mix and its operatives for Pharma
industry are very peculiar. The pharmaceutical industry is one of the few
which cater to unique situations. Here the decision maker is the prescriber i.e.
doctor while actual user of the product is a patient. Patient purchases product
only because of doctor’s advice and hence product should satisfy the
conditions of physician. Even if all other parameters are correct, the product
might still fail because of improper promotion. Personal selling is the major
promotional method in pharma marketing.

Brand management, particularly promotion is a very difficult task in every

Industry / Business. It is particularly difficult in those businesses where the
competition is intense, market is crowded with variety of similar looking
products and especially, when the end user cannot make choices of his/her
own, but has to use the product on some expert’s recommendations.
Pharmaceutical is such one of the most intense knowledge driven industry,
which is continuously in a state of dynamic transition. Pharmacy can be
defined as “Complex matrix of process, operations and organization, involved
in the discovery development and manufacture of drug and medication.” The
pharmaceutical industry is the lifeline industry, which plays a very important
role in building strong human capital of country and very essential for
economic growth and development. Indian pharmaceutical industry is climbing
up the value chain from bringing a pure reverse engineering industry focus on
domestic market. The industry is moving towards basic research driven expert
oriented global presence and providing wide range of value-added quality
product and services.

Considering the complexities in marketing process in pharmaceutical

business, while launching a new formulation in the existing markets or
launching new formulations in the new markets, product differentiation is
necessary for proper brand promotion. Since, for the prescription products,
the end-customer, i.e. patient or his/her relatives are unable to take any
decision and the product is necessarily recommended by the expert, i.e.

81
physician or doctor, it is imperative that this brand promotion efforts to be
aimed at primarily towards the physician or doctor and secondarily to the drug
retailer as he plays an important role in dispensing the prescribed brand.
While launching the new formulation, there can be dilemma in the mind of the
filed manager on diverting existing field force for the promotion of the field
force, perhaps at the cost of old and established products. However, it is most
necessary to do so as it can only help product differentiation, brand promotion
and stabilization of the new product in the market. Nevertheless, one question
remains and that is whether, the research findings are universally true or they
are geography specific. One can get the answer only when such studies are
conducted at multiple places simultaneously. The results of such studies can
be generalized to arrive at possible answer. Companies realize it is often not
enough to spend like your competitor. In fact, you have to outspend the
competition, especially in areas such as market research and patient
education, to make significant impact on your position in the market

82
 CHAPTER – 6
CONCLUSIONS and
SUGGESTIONS

83
 CONCLUSIONS

Implement, improve and monitor legislation in line with the WHO

Resolution on the Rational Use of Medicines and the WHO Ethical Criteria
for Medicinal Drug Promotion.

Support the provision of independent information on drugs for consumers

and health professionals.

Implement and enforce a ban on gifts to doctors.

Enforce strict sanctions that will deter poor corporate practice in drug
promotion.

Take measures to improve the transparency of drug companies’ marketing

activities and seriously address the conflict of interest encountered in drug
companies’ funding of medical education.

Ensuring high standards in the promotion of medicines is important to

consumers’ health and helps to save money for health providers and patients.
Without proper controls consumers can be subject to misleading or inaccurate
claims and the promotion of expensive branded medicines that have no
greater medical value than cheaper non-branded products. Whilst the
pharmaceutical industry clearly has an important role to play in tackling the
health challenges their involvement in the promotion of medicines presents a
serious conflict of interest.

It is equally important that health professionals have access to independent

and up to date advice on medicines so that they can make informed
judgements about the most appropriate medication for patients. Governments
must make continued medical education (CME) a priority and alleviate the
need for doctors to rely on industry-dominated information provision
mechanisms.

Improved regulation of drug promotion will generate a number of benefits for

various stakeholders. Consumers will have a better chance of getting the
most appropriate drug for their condition. Regulations that lead to improved

84
drug use can lower direct costs (e.g. subsidy costs and import costs) which
should be welcomed by governments and tax payers. Finally, socially
responsible drug companies will also benefit if regulation helps to create a
level playing field and prevent unscrupulous companies from manipulating the
market through irresponsible marketing.

The pharmaceutical industry

Key recommendations at the company level

Stop the practice of gifts to doctors

Implement rigorous policies on vetting of drug promotion materials and

adherence to existing codes of conduct

Provide transparent and verifiable information on the precise nature of

relationships and associated funding for all stakeholder groups, including
health professionals, pharmacists, students, journalists, clinical research
organizations and patient groups.

At an industry-wide level:
Ensure codes of conduct on drug promotion extend to interactions with health
professionals AND consumers.

Invest in innovative partnerships with government and civil society

organizations so that corporate funding of disease awareness campaigns, and
CME may be channeled via blind trusts in line with specific health priorities of
consumers at a community or national level.

According to IFPMA, “promotional activities must be consistent with high

ethical standards and information should be designed to help health care
providers improve services to patients. Information must be provided with
objectivity, truthfulness and in good taste and must conform to all relevant
laws and regulations. Claims for therapeutic indications and conditions of use
must be based on valid scientific evidence and include clear statements with
respect to side effects, contraindications, and precautions.“ It also stresses
that “high standards of ethical behaviour shall apply equally to marketing of

85
pharmaceutical products in all countries, regardless of the level of
development of their economic and health care systems.”

CHAPTER – 7
REFERENCES and
BIBLIOGRAPHY

86
 BIBLIOGRAPHY

Books
Chaudhary, P. (1998), Rx Factor: Strategic Creativity in Pharmaceutical
Marketing, New Delhi, India: Response Books.
Mittal, D.K. (1994), Drug and Pharmaceutical Industry, New Delhi, India:
Anmole Publication Pvt. Ltd.
Ramaswamy, V.S. & Meerakumari, N.S. (1996), Marketing Management: An
Indian Prospective, New Delhi, India: Macmillan India Ltd.
Sakaria George (1997), "Reform: The Inside Story," Business Today (March
7-21), 72- 76.
Smarta, R.B. (1998), "Getting friendly," Advertising and Marketing (February
1-15), 51- 54.
Smarta, R.B. (1998) "Distribution as a strategic weapon" Advertising and
Marketing (May 16-31), 30-32.
Smarta, R.B. (1998) "The bigger objectives", Advertising and Marketing
(March 1-15), 24-26.
Smarta, R.B. (1998) "Sensible Pricing", Advertising and Marketing (January 1-
15), 74- 76.
_____ (1988), "The Eastern Pharmacist: An Independent Organ of
Pharmaceutical Industry", Trade & Profession (April), XXXI (364), 37-56.
_____ (1998), "The Next Level: Survey of Pharmaceutical Marketing",
Advertising and Marketing (August 31), 72-78.
_____ (1998), "Wielding the Scalpel", The Strategist Quarterly (April-June),
16-19.

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Internet website Links
www.governmentstatisticaldata.com
www.historyofpharmaceuticalindustry.com
www.otcpharmaceuticalproducts.com
www.cipla.com
www.bookrags.com/sciences/genetics/antibiotics-wrog.html
www.bookrags.com/others/health/cephalosporines-woh.html

88