Ho wever, man y industry experts b elieve th at th e

retu rn of th e wo rld s lead ing pharmaceutical companies

will gradually erode Indias cost advantages. According tothe
Organization of Pharmaceutical Producers of India, multinational drug
companiescurrently command 24 percent of the domestic Indian market,
through their share couldrise to 40 percent by 2010.
MARKETING FUNCTIONS
Promotion means any activity undertaken, organised or sponso
red by a member company which is directed at healthcare
professionals to promote the
prescription,rec o mmen d ation , supply, ad min istration o r con
su mp tion of its ph armaceu tical product(s) through all
media, including the internet. A marketing program in order to
besuccessful must have a right mixture of marketing mix, not to mention
market
research,a q u ality p rod uct, ex ten siv e d istribu tion n etwork ac
ceptability, stron g dose of promotion coupled with a right price.
A unique feature of the pharmaceutical market isthat it is one of the most
fragmented markets in the country. The maximum market isheld by
small companies, the largest pharmaceuticals company holding only 6
percentof the market share. This leads to unique marketing mixes.The Indian
pharmaceutical market is small, both by Western standards and in terms
of per capita consumption. Although India is the worlds leading produc
er of genericdrugs, its annual per capita consumption of pharmaceuticals
is among the lowest in theworld at approximately $4.50 per person, as
compared with $820 in the United Statesand $13 in China in 2006. The
value of Indias pharmaceutical industry nearly doubledfrom $3.2
billion in 2000 to more than $6.2 billion in 2009, or by an
average of 12 percent annually (table 10). According
to the Associated Chambers of Commerce andIndustry of India
(Assocham), the Indian pharmaceutical market grew at an
averageannual rate of 13.6 percent during 2006-2010 to reach
$9.5 billion in sales by 2010.This 51 growth is expected to be
driven by: access to low cost, high volume

genericd r u g s ; m e r g e r s a n d a c q u i s i t i o n s : i n d u s t r y c o n s o
l i d a t i o n ; a n d I n d i a s g r o w i n g i mp o rtan ce as a ph armaceu
tical contract man uf actu ring and serv ices location . Approxi
mately 80 percent of domestic industry production consists of
formulations,with the remainder consisting of bulk drugs.22

Considering the healthcare of the Indian Public, the Govt. of

India encouraged thedomestic pharmaceutical companies in India.
When the international norms recognizedthe product patent, the
government of India enacted the Indian Patent Act in
1970(process patent), with the objectives of allowing the domestic
companies to grow. TheIndian Patent Act recognized
the Process to manufacture a product and not
the end Produ ct. In dian co mp anies took adv an tage of the
Patent Act and succeed ed in producing molecules, which were
under Patent Production else where, at a cost that
waslo wer th an th e o rig in al research co st. By taking th e cost
adv antag es, the Indian Pharmaceutical companies fixed their prices
lower than the prices fixed by the Multi National Companies
manufacturing the drugs. Apart from the Indian Patent Act 1970,DPCO,
FERA and increased imports tariffs also helped the growth of the
domestic pharmaceutical companies. With a view to the above effect, th
e MultinationalCompanies market share, decreased from 100% in the
year 1947 to 80% and 33%
inth e years 1970 and 199 1 resp ectively with co rrespond ing
increase in d omestic companys market share.
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 thesegenerics by means of alternative

production procedures. This proved more cost-efficientthan the

expensive development of original preparations as no funds were
required for research, which contained the financial risks. This
spending block may come to asmuch as EUR 600 m for only one
drug. This kind of money could previously only beraised by large
corporations in the industrial countries. The competitiveness of
generics producers is based on costefficient production. In this field, Indian companies arecurrently in top
position. At one-fifth, Indias share in the global market for
genericd ru gs is consid erably h igh er th an its share in th e ov
erall p harmaceu ticals mark et (approx. 2%). At the same time,
Indias pharmaceutical companies gained know-how inthe
manufacture of generic drugs. Hence the name pharmacy of the
poor which isfrequently applied to India. This is of significance not
least for the domestic market asdisposable income is as little as EUR
1,900 per year for roughly 140 million of the totalof 192 million Indian
households1, which means the majority of Indians cannot
affordexpensive western preparations.23

Fig. 4.1: Market Share of CorporateFig. 4.2: Market Share of MNCs & Local
CompaniesBetween 1996 and 2006, nominal sales of pharmaceuticals on
the Indian subcontinentwere up 9% per annum and thus expanded much
faster than the global pharmaceuticalmarket 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 r o u g h l y E U R 1 0 b n , I n d i a c o m m a n d s a l e s s t h a n
2 % s h a r e i n t h e w o r l d s pharmaceutical market (1966: 1.5%)
. This puts the country in twelfth placeinternationally, even behind
Korea, Spain and Ireland and before Brazil, Belgium andMexico.
Among the Asian countries, Indias pharmaceuticals industry ranks

fourth at8%, but has lost market share to China, as sales growth there
was nearly twice as highand sales volumes nearly four times higher than
in India.24

Globalization has not caused traditional medicine to be

abandoned but with higher education, rising income and a change
in lifestyle, western medical treatment is gainingin importance. At
present the population especially in rural areas still sees
westernmedicine as a stop-gap cure which is unlikely, though, to
provide a lasting solution
toh ealth problems. To day, abou t 70% of th e pop ulation on t
h e Indian sub con tinen t depends entirely or at least in part on

traditional Indian medicine which is cheaper andmore easily available than

western drugs.

OBJECTIVES AND SCOPE

The present study of the pharmaceutical industry of India revolves
around the following basic objectives:
To understand how pharmaceutical company launch their product
To know what promotional strategies are used by pharmaceutical
companies to selltheir products in the market
To understand what is the role played by sales representatives in this
regard

LIMITATIONS
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
randomsa mp ling, which item g ets selected is ju st a matter
of chance. Rando m sa mp ling 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 the pharmaceutical industry is one of the major,
most successful also rapidly growing industries worldwide.
It contributes significantly to the economies of many countries all
around the world, both as a major employer and as an export earner.
Marketing and sales of pharmaceutical products is very different from
other
productssuch as say g ro ceries, cosmetics, food ite ms, v eh icl
es, etc. On e, phar maceu tical products (apart from over the counter
OTC drugs) can only be obtained from a chemiston a doctors
prescription. Thus here the customer is the doctor, who is well versed
in pharmacology. Two, medicines and drugs can only be prescribed by a

doctor onlywh en it is deemed necessary f or the patien ts

reco very f ro m i lln ess; th at is, it is ethically wrong for a doctor to
needlessly prescribe medicines. Under these medical andethical
constraints, how does the pharmaceutical company promote its
products? This isthe purpose and objective of the study.16

Table: 4.1: Indias Pharmaceutical IndustryIndias

pharmaceutical industry is one of the fastest
growing segments of the Indianeconomy 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, valueadded foreign
acquisitions and joint ventures, Indias mastery of
reverse engineering
of patented drug molecules, and Indias efforts to co
mply with its World TradeOrganization (WTO)
Trade Related Intellectual Property Agreeme
nt (TRIPs)obligations. When India joined the
WTO in 1995, its pharmaceutical exports
werevalued at less than $600 million. By 2009,
its exports had grown to $3.7 billion
anda c c o u n te d fo r mo re t h an 6 1 p e r c e n t o f

i n du s t ry t ur n ov e r . C u r r e n t ly , In d i a n pharma
ceutical companies produce between
20 and 22 percent of the worlds genericdrugs (in
value terms) and offer 60,000 finished medicines
and nearly 400 bulk drugsused in formulations.The
pharmaceutical industry in India is going
through a major shift in its businessmodel in the
last few years in order to get ready for a product
patent regime from 2009onwards. This shift in the
model has become necessary due to the earlier
process patentregime put in place since 1972 by the
Government of India. This was done deliberatelyto
promote and encourage the domestic health care
industry in producing cheap andaffordable
drugs. As prior to this the Indian pharmaceutical
sector was completelydominated by multinational
companies (MNCs). These firms imported most
of the bulk drugs (the active pharmaceutical
ingredients) from their parent companies abroad
and19

Advertising
The various dimensions of pharmaceutical marketing are
Demographic (age, sex,family, etc), Generic (as per

generic equivalent present in them), Therapeutic

group,Competitive (depending upon number of competitors
present), and fifth dimension isthe time. In pharmaceutical markets,
major segments considered are:
a) Consumer or Prescription markets:
These consist of individuals who go to practicing doctors.
b) Institutional markets:
These contain large hospitals, Public and Private sectors al
ong with governmentshospital including medical colleges.

c) Industrial markets:
These consist of bulk drugs and their formulations.
d) Over the counter (OTC) markets:
Drugs, which are non-prescription medicines
and can be sold directly to end-users.Based on
product category, the pharma industry can be
divided into:a . B u l k D r u g s
:
(The active ingredient for making
formulations.) b.Formulations
:
(The final form, in which the drugs are sold i.e.
Syrups,c.Injections, Tablets and Capsules) In
general, business in pharmaceutical market is
conducted in two major ways, that is,either by
institutional selling or through trade
business.Pharmaceutical marketers in the USA,
having just been allowed to advertise drugs

onTelevision, have taken the big risks. They are

advertising like crazy and even have thewebsites to
keep patients fully informed of diseases dosages side
effects and so on. InIndia too, earlier this year
MAA. Bozell set up Lewis Grace. Bozell, is a
subsidiaryresponsible for pharmaceutical
advertising. Now, Ogilvy & Marther and
Redeffusionare reportedly considering similar
moves. To begin with, they will try to bring
their skills to the ordinary business of making
audiovisual, prints or multimedia sales pitches.

to the doctors. This could improve the

communication of OTC products, which
have been turning more love and care orient
ed. Johnson & Johnson's touch therapycom
mercial is good example of the use of
emotion. Advertising agencies will have
toeducate themselves well, because the main
reason that in house publicity
departmentsmanage to torpedo the
suggestion of agency help is the fact that
no body wants their wonder pills to be
handled by bubble gum jingle makers. Says

the marketing manager of a small, but fast

growing Indian company, "Advertising
agencies may be good for selling the image
of the company as whole but at the level of
each brand, what can theydo? They don't
know anything."Pharmaceutical marketing
experts are aware that well timed
advertising directed todoctors 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 mostdrug
companies claim) primarily information on
how the drug works or is intended
to persuade doctors to prescribe the drug
more frequently.Although there has been a
lot of research on the persuasive versus
informative role of drug promotion, there is
little consensus and certainly more
investigation is needed inthe context of
developing countries. Nevertheless, a

WHO commissioned
literaturereview of existing
evidence in this regard reveals that while
doctors opinions
on theusefulness of the information fro
m drug companies vary, most believe t
hat suchinformation is biased.
The analysis revealed:
Generic names of drugs are not revealed in
more than 10% of advertisements.
Only 22.7% disclosed any adverse effects.
Just 25.1% provided any precautionary
information.
Only 51.7% cited any references.The Thai
and Indian examples contradict established
norms of ethical practice in thisarea. The
WHO Criteria clearly states that

advertisements in all forms to physicians

andhealth related professionals should be
fully consistent with the approved scientific
datasheet for the drug concerned or
other source of information with
similar content.27
Moreover, advertisements that make a
promotional claim should at least conta
insummary scientific information.While
these examples of advertisements focus on
specific countries and companies,
thisshould not be interpreted as evidence
of a higher prevalence of information
quality problems
compared to other countries or companies.
It is clear however that the poor quality of
information provided to doctors in
developing countries cannot be dismissedas
infrequent and isolated cases, but rather
can be viewed as a systemic breach

of responsibility and ethical norms by

market
leaders.Research shows that there is a st
rong correlation between irrational pre
scribing behaviour and the use of
commercial sources of information. The
impact of flawed
andincomplete information is ultimatel
y passed on to the worlds poorest and
mostvulnerable consumers. Evidence
suggests that doctors in developing
countries, like their counterparts in other
countries, rely heavily on drug companies
for drug information, particularly
for new drugs. However, while doctors in co
untries like the US, UK andAustralia have
access to independent sources of drug
information, this is not the case inmany
developing countries. This is a major
challenge in terms of providing

doctorswith reliable information that can then

be passed on to consumers.
Marketing Research Function
Marketer, in order gain information, co
nducts market research, which in India
n pharmaceutical industry can be as simple
as chatting with doctors, retailers and
hospitaladministration or as complex as
surveying a nationally representative s
ample of specialists or corporate hospitals
and identifying the emerging health care
needs. The pharmaceutical major are fond of
syndicated data. Many companies routinely
buy ORG(Operation Research Group) panel
study and C-MARKTM studies for different
brandsand keep them in computer
memory for easy retrieval and analysis.
For them, it justfeels good to know that
data can be accessed when needed. But
when it comes todeveloping strategies for
their brands, these companies do not operate

on the basis of this data. On the contrary,

CadilaTM Health care (ZydusTM) group,
takes the data veryseriously. It has
meetings with all of the brand managers
every month to study theimplications and
develop strategic actions along with top
management teams.
Thiscompany is using information acti
vely, whereas many other companies
use the28
information either as an academic appendage during
a presentation of low immediaterelevance or as
a defense shield during a performance
review.Marketing research data only provides a base
for action in the market place, the actionwhich has
to be implemented through various mix's of
promotion. It is important tounderstand that the
promotional mix for any brand or organization is
dependent uponthe mix of advertising, personal
selling and public relation. Over use of personal
sellingi n pha r ma c e u t i c a l s v i a me d i c a l r e p r e
s e n t a t iv e s a n d l i mi t a t i o n s o n ad v e r t i s in g p
harmaceutical products due to FDA (Federal Drug A

dministration) restrictions, presents an opportunity

to explore the role of and exploit the Public
Relations functionin the pharmaceutical
industry.Pharmaceutical marketing is quite different
than marketing of any other goods.
Within pharmaceutical products, marketing of prescr
iption products is a way different fromthat of overthe- counter (OTC) drugs and actual behaviour of
prescribed drug marketmay vary based upon
various parameters. In case of prescribed drug
market, typicalsales process is as follows:Fig. 4.3:
Drug requiring prescriptionIn this case, the patient
customer - do not have much or any say in
purchase of
the product, perhaps other than spending the money.
The decision makers are the29
physicians or doctors treating the patient. They will
prescribe drug of a particular brandif they are:A w a r e o f t h e p r o d u c t . -Convinced
about the utility and usage of the product.Reasonably certain that the prescribed drug
can be made available by the drug retailer in
required amount of time.After following the above

logic, the doctor prescribes the drug, but the

drug retailer plays a major role in effecting
actual sale and he may:-Not have the prescribed
product in the ready stock.- N o t co n s id e r
t h a t t h e p re s c r i b e d p ro d u c t h a s su f f i c i en t
d e ma n d t o s t o c k th e product.- Su g g e s t o r
j u s t s ub s t i tu t e p ro d u ct o f
t h e co mp e t i t o r c o mp a n y h av i n g s i mi l a r co
mposition, most of the times without even
knowledge of the
prescribingdoctor.A l l t h i s w i l l p e rh a p s h a pp e
n ju s t b e c au s e th e r e is l e s s b r an d a w a r e n e
s s a s a consequence of less promotional efforts by
the product company.
USE OF PUBLIC RELATION
Very few pharmaceutical marketers in India use
public relations as a marketing tool.Many of them
think Public Relation entails sending out a few press
releases, holding afew conferences and conducting
some event when company launches a new
moleculeor product. In reality, Public Relation
usually ends up making a point at a very
personallevel. Its impact in the industry is seen at

several levels affecting doctors and brands.Some

years ago, CiplaTM was forced to make use of
Public Relation tools when itsmajor
communication medium--medical
representatives turned--un-cooperative. Thecompany
conducted meetings for not more than 10 customers
at a time and ensured thatthousands of such meetings
took place at different locations in the country. This
helpedciplaTM in building one-to-one relationship
with its customers. Prudent use of PublicRelation
has also helped the organization in creating a
positive platform for
directresponse communication.30
DRUG PROMOTION METHOD
The commercial needs of countless, fiercely competing
pharmaceutical companieshas 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 resourcedsectors on low pay and
in difficult conditions. In such conditions the promotions
fromthe drug companies are inviting. Disparities in
health spending between the worlds32

richest countries and the worlds poorest countries

are such that a relatively cheap promotion in a
developing country will generate much more interest
there than it wouldin a developed country.The aim of
drug promotion is to persuade people to buy more
drugs and/or to payhigher 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 informationaland persuasive activities
by manufacturers and distributors, the effect of
which is toinduce the prescription, supply, purchase
and/or use of medicinal drugs. The main aimof
promotion is not to inform but to persuade. Consumer
goods advertisements rarelyconvey 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 stag
es and then deploy sophisticatedmarketing 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 tounderstand
human motivations and decision-making. Public relations
techniques
bypass peoples defences by giving the impression that th
e message is coming from atrustworthy source.
SSUES RELATING TO PROMOTION:
The ethical promotion of prescription medicines is vital
to the pharmaceutical industry'smission of helping
patients by discovering, developing and marketing new
medicines.Ethical promotion helps to ensure that h
ealthcare professionals have access toinformation
they need, that patients have access to the medicines
they need and that medicines are prescribed and used in
a manner that provides the maximum healthcare benefit to
patients. It is understood that national laws
and regulations usually dictate the format and content of
the product information communicated on labeling ,

packaging, leaflets, data sheets and in all promotional

material. Promotion should not be inconsistent with
locallyapproved product information. Promotiona
l information should be clear, legible,accurate,
balanced, fair, objective and sufficiently complete to
enable the recipient toform his or her own opinion of
the therapeutic value of the pharmaceutical
productconcerned. Promotional information should be
based on an up-to-date evaluation of allrelevant evidence
and reflect that evidence clearly. It should not mislead by
distortion,exaggeration, undue emphasis, omission or
in any other way. Every effort should bemade to avoid
ambiguity. Absolute or all-embracing claims should be used
with caution34

Direct-to-Consumer (DTC) marketing strategy

This is recent approach which has been used by
various pharmaceutical companiesmainly abroad
(USA and UK). USA has pioneered DTC
advertising. The reason DTChas become an area of
interest over the last few years, is that it is a way of
influencing people who actually use the
medicine.DTC essentially means a campaign or
communication programme intended for
andtargeted to consumers. In relation to
pharmaceutical products, the consumers may

be patient or family members, caregivers or the gene

ral public. Initially, doctors wereworried about th
e patients failing to understand the drug relat
ed information andi mp a i r me n t o f d o c to r / p a
t i e n t r e l a tio n sh ip , b u t D T C d i d n o t l e a d t o
a ny s u ch 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 Turfs online tracking can help track
individualdoctors online, which is immensely
useful for pharma companies to deliver
targetedcommunication to them.
Defense Strategies
Besides promotional strategies, a number of defense
strategies have also been used byvarious
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 products protected life
as the market exclusivity period is extended by three
years for
each newindication. Often, companies more impo
rtant indications during the launch of the product

& less important indications are introduced when

product is at decline stage inits life cycle. Eg.
Lovenox, a product for curing thrombosis was
launched with oneindication in orthopedic
surgery by Aventis. Currently, it has eight
indications. Byrevealing more & more
indications of the same drug, the company
has more thandoubled its original peak sales for
this drug.48
Reformulation
A similar strategy to gaining new indications is
to produce a new formulation on
anexisting marketed drug. This line extensio
n will often be associated with a moreconvenie
nt dosing form or a longer lasting formulation. This
strategy is most commonlyused where old technology
is an immediate-release formulation requiring
multiple dailydoses is replaced by a new
technology once daily formulation of the
drug.Pfizer defended its hypertensive drug Procardia for a number of years with
thisstrategy.
Switching strategy

This strategy relies on moving patients from an older

drug (whose patent is about to runout) on to the
newer version (which has patent protection). The
theory is that by thetimes generics of the original
drug hit the market after its patent has expired,
patientshave already been switched to newer drug
and are unlikely to switch back to the older,now
generic drug. Pfizer successfully used this st
rategy to switch patients on toProcardia XR
from its original drug Procardia near the time, when
Procardias patentwas 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 AndrxUS$ 10 million per quarter
not to launch its generic version of Cardizem. As a
consequence of the mounting evidence of
counterfeiting in Asia, companies inIndia 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 companys 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 t
he cost and availability of capital are brand b
uilding (or brand49
Strength) and marketing strategies adopted by them
as these have a profound impact ongrowth and
market share of all pharmaceutical companies.
GLOBAL TRENDS IN PHARMA PROMOTIONS
& MARKETING
Fig. 4.4: Pharmas Current ModelAs the Verispan
promotional audit data
show, pharmaceutical companies spend adisprop
ortionate 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 spenton ePromotion is minuscule.For every
100 sales rep visits to physician offices, only 56
actually see the physicianand 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

minuteson average.Fig. 4.5: Reduction in U.S. Primary

care promotional spending50
EVIDENCE OF ETHICAL FAILURES
Do cto rs are th e main targets fo r the p ro mo tion al activities
of d rug co mp anies in developing countries. With the power to
prescribe and a high status in society their opinion of a drug very
often determines its sales success. It is therefore not surprisingthat the
majority of marketing spend by industry leaders goes towards direct-todoctor (DTD)
promotion.These mark eting p ractices are co mmon to mo st con
tex ts wh ether in d ev elo pin g countries or developed. However some
issues are of particular concern to developingcountries where health
budgets are smaller and resources have to stretch much further.For
instance in developing countries the lack of government funding for
professionaldevelopment activities for health professionals can ma
ke drug company sponsoredmeetings more valuable. Lack of
resources for surgeries and even personal medical resources can
also make offers from drug companies more inviting. The sheer
volumeof promotion as well as the types of cases we have come across
in our research raisesserious concerns about whether drug
companies are able to regulate their promotionactivities effectively,
while ensuring high standards of consumer protection.
Gifts
Among the promotional tactics employed by pharmaceutical companies
is the practice of giving gifts to doctors. In developing countries, these
range from small items such as gifts, pens and notebooks to
expensive foreign holidays, televisions, air conditioner sand even
jewellery. However what stands out in the developing country context is
the practice of giving lavish personal gifts that have no pretence at medi
cal value. AK a s h m i r i n e w s p a p e r r e p o r t e d a d o c t o r a s s a y
i n g M e d i c a l r e p r e s e n t a t i v e s o f pharmaceutical
companies whose products may or may not be efficacious without any
qualms offer cash, refrigerators, colour televisions, laptops, PCs, mobile

phones, ovens, phone bills, cars, tuition fee of their children, and lots
more.Similarly, one Indian doctor noted, The newer multinational
and major players in the market have started to hire marketing
professionals and take their brand promotion veryseriously and many
try to build a personal rapport with the doctor by
rememberingspecial occasions like their birthdays and anniversaries
and besides the regular festivals.The companies have started to spend
more and more in keeping the doctors and their 54

employees happy rather than their customers.

'Gifting' of air conditioners,
washingmachines, microwaves, cameras, televisio
ns, and expensive crystals is a normalaccepted
norm nowadays. So are frequent pampering in form
of CMEs [ContinuingMedical Education meetings] and
lectures in star hotels followed by lavish dinners
andcocktails.Such practices not only contravene the
national industry code on ethical promotion, butalso are
often nontransparent. These gifts may be hidden in
official company reports
of spending under budget lines for seminars and e
vents. As a result, establishing anaccurate picture
of the actual costs associated with gifts to doctors can be
difficult for health watchdogs and consumer groups who
are concerned about the influence of drugcompanies on
health professionals.
BUT DOES THIS GIFT GIVING MATTER?
A sales representative in India reported: Since there is no
documentation of these gifts,the doctors can switch over

from one product to another when perks of one

companyexceed that of another. The doctors neglect other
aspects of the drug like its
efficacy,suitability for the patient, the cost etc. W
ith so many multinational companiescompeting in
India, the money spent over these activities is increasing
day by
day.Our research brought to the fore three key ar
eas where the interaction between pharmaceutical
companies and health professionals suggests an unhealthy
relationship,with significant conflicts of interest.First,
health professionals belief about gifts shows recognition
of the fact that gifts dohave an impact on prescribing
behaviour. This can promote irrational drug use
byconsumers that is not based on reliable data on real
needs, safety, efficacy and price of the drug, but rather on
the marketing tactics of individual companies. Second,
examplesof the way in which the gift relationship between
companies and doctors is cultivatedreveals a disregard
for ethical practice. Finally, examples of how prescribing
behaviour is affected by gifts suggest that such
practices negatively affect consumer health andsafety
and may increase unnecessary spending on healthcare.55
HEALTH PROFESSIONALS BELIEFS ABOUT
GIFTS

As a marketing strategy, in cultivating a gift relationship

with doctors, drug companiesare in effect creating a
relationship of reciprocity where, upon receiving a gift,
doctorsmay feel obligated to respond. Whether they are
conscious of it or not is not relevant.Existing literature
suggests that doctors hold a range of views about
gifts. In generaldoctors readily accept gifts that are
smaller and socially more acceptable. There is asense
of unique invulnerability, that only other doctors are
influenced by gifts. Thistheory of unique vulnerability
suggests that doctors are more willing to say that
other doctors are influenced more than they are
themselves, but this hypothesis warrantsadditional
research.
Fig. 4.9: Hypothesis warrants additional research
Key findings showed a high level of interaction between
the pharmaceutical
industryand the medical profession. Although the
latter recognize the influence of theseinteractions
on prescriptions and the elevation of the cost of the final
product, they findit appropriate to receive benefits.

86% receive medical samples frequently.

39% receive desk gifts.

19% receive invitations to congresses.

12% receive free lunches.56

Sales representatives
According to their career profile, pharmaceutical
sales representatives spend most
of t h e ir b u si n e s s ti me o n t h e r o ad , t a l k i n g
w i t h ph a rma c i s t s , h o s p it a l p e rs o n n e l , physi
cians, patient advocacy groups, and even retirement
homes, increasing thevisibility of their companys
products and the volume of their sales.One to one
visits from sales representatives are proven to be the
most effective way to promote drugs to doctors
because they can identify the behaviour change stage
and themain motivators and decision-making styles
of the person they are selling to and
adapttheir approach accordingly. The main in
fluencing techniques used by drug salesrepres
entatives try to focus on doctors tendencies to trust
experts, trust their peers andtrust likable (friendly
and/or attractive) people, to be consistent with their
commitmentsand to act on reciprocal obligations
when given gifts. Visits from sales
representativesare often coordinated with other
methods such as providing gifts, free samples
or running advertising campaigns.A study published

in June 2007, revealed that medical sales

representatives noted thatthere were often
inconsistencies between what they had been told
to tell the doctor during promotional visits and
what was detailed in the literature. Also, doctors
notedth a t the y r e c e iv e d li t e r a tu re o n ly i f th
e y r e p e at e d ly r eq u e s te d i t. T h e se s o c i a l res
ponsibility failures pose significant threats in the
context of a country like India,which is a poorly
regulated environment and is further
complicated by a significantuneducated consumer
base and a highly privatised health system. Personal
comments by sales representatives and health profes
sionals alike from many parts of thedeveloping
world are suggestive of an ethically questionable
relationship fostered bydrug companies.57

B rand education
It is clear that companies face a conflict of
interest in providing an accurate picture
of negative impacts of their product. This
presents a problem for doctors everywhere,

but particularly in developing countries, who

rely heavily on the drug information
provided by the company and in many cases
cannot access independently verified
data. However,doctors can also be complicit in
the problem when they choose to endorse a
companysmarketing campaign or assume the
role of a seemingly independent key
opinionleader to shape a positive perception of
the drug among health professionals. In
somecases the pharmaceutical industry
manages to coopt academia and unduly
influencewhat health researchers reveal abou
t their findings, as the nonprofit organisationDoctors for Research
Integrity asserts. One significant result is
that medical journalarticles on new drugs may
be ghost written and influenced by drug
companies publicrelations (PR)
firm.Despite obvious failures in their prom
otions vetting and compliance systems for
company codes, the industry continues to
insist on a model of pure self-

regulation.What is needed is a rigorous syste

m of oversight and continuous consultation
amongkey stakeholders including consum
er advocates, the drug industry, governme
ntagencies, and health professionals.
CAN SELF-REGULATION WORK?
"All advertising is inherently unethical. That's
how you sell things" said a New York attorney.
Selling drugs is like selling any other
commodity. Pharmaceutical
companieschoose to spend more on medi
cal drug promotion rather than on resea
rch anddevelopment because drug
promotion is what earns them money. There
have beennumerous studies which have
incontrovertibly stated that drug promotion
influences prescribing
practices, a fact that is not acceptable to many
doctors. If drug promotionwere not so
successful, would the companies spend billions
marketing their ware?The World Health
Organization (WHO), in an attempt to
support and encourage theimprovement of

health care through the rational use of drugs

and to curb unethicalmarketing practices,
came out with a landmark "Ethical criteria
for medicinal
drug promotion" in 1988 and has recommended
their implementation to its member countries.
This document defines drug promotion as "all
the information and persuasive58
activities by manufacturers and distributors in order
to induce the prescription,
supply, purchase and/or use of medicinal drugs". It a
lso suggests what can be consideredappropriate
hospitality and gifts. There is evidence that drug
utilization problems areincreasingly encountered in
many developing countries due to the unethical
marketing practices of the pharmaceutical industry.
Unfortunately the guidelines drawn up by theWHO,
are flouted in practice with impunity since there
are no effective legislativemeasures to support
them.The International Federation of Pharmaceutical

Manufacturer's Association which hadfirst

suggested a self regulatory code of
pharmaceutical marketing practices in
1981,adopted the revised version in 1994. There
seems to be obvious double standards
inadoption of the code. While in the
developed countries, these firms often
publishreasonably ethical advertisements which
are published in medical journals, the
verysame companies promote the same drug f
or different indications in developingcountries
. The information is also insufficient, sometimes
contains unproven scientificclaims and is published
by many medical journals from these countries. In
an attempt toget a grip on the situation the
International Committee of Medical Journal
Editorssuggested that editors must take full
responsibility for what appears in their
journals.M any j ou rn a ls a p p o in t ed c o mmi t t e
e s t o ex a m i n e ad v e rt is i n g ma t e r i a l b ef o r e
publication. Yet this was beyond journals in
many developing countries who were eager to grab

the money that advertising (ethical or unethical)

brought in.Even though it has been proven time
and time again that drug advertising in India
isunethical, nothing much is being done to curb it.
The annual conferences of the variousnational
bodies of medical specialities are a glaring
example of how deep the rot hasspread. Today
no medical conference is organised without
getting financial
supportfrom the pharmaceutical industry. In r
eturn for the lavish financial assistance,comp
anies are allowed to select speakers, choose the
topics for discussion, advertisetheir brand image
and so on, a situation akin to the indoctrination
done in terroristcamps. If this situation is allowed
to continue we shall have a nation full of doctors
whorely on the drug companies to dictate what they
should prescribe.Unfortunately, though India had
a head-start in this direction with the
constitution of the Drug Enquiry Committee in 1930
under the chairmanship of Sir R.N. Chopra

whichscrutinized the pamphlets of drugs which made

spurious claims, we have not made a59

dent in this direction. The Drugs and Magic

Remedies Act which came into force in1955 and
was amended in 1961, 1967 and in 1992 have
not been enforced due to theapathy and general
disinterest of the health care fraternity and the
industry refuses to becowed down by legislative
enforcements. Hamdard Dawakhana was asked to
recall 40drugs. But they chose to file a writ in
Supreme Court in 1959 on the grounds that
their right to free speech and right to carry on
trade and business were violated. The SupremeCourt
however, dismissed the petition. The drug industry
fast learnt to take advantageof the loopholes in the
law and continued with unethical marketing
practices. The problem
became so serious that S. Narayen, Commissioner,
FDA Maharashtra, in theforeword to a book on the
Drugs and Magic Remedies act by S.W.Deshpande
in 1994,admitted that 'economic liberalization seems
to give the impression that manufacturershave the

right to sell and the market place is what must decide

the rules of the game. Inthe dizzy of activity, various
ploys are used to sell the product. Some of these not
onlymislead the consumer but can also be
harmful'.The internet is perhaps one of the greatest
boons to the medical establishment. Doctorsare able
to check the validity of information given to
them by drug companies andtherefore it is now
being reported that drug companies are hesitant to
tell outright lies as before. But the industry relies
on the fact that doctors are busy people who would
notfind the time to counter check information
they have received. The ever
innovativemarketing executives have come up with
yet another brilliant ace in the form of direct-toconsumer (DTC) advertising. This
is the advertising of branded drugs through popul
ar media. In India we are already exposed to
television advertisements for inhalersin bronchial
asthma, insulin for diabetes mellitus. This is a
scaled down, modifiedversion of DTC advertising.
If DTC is approved, then drug companies will
dictate whatdoctors prescribe through their
patients.A s ma l l s i l v e r l in i n g i s p e r h a p s t h e
e f f o rt s o f a f e w me d i c a l c o ll e g es w h e r e un

dergraduate students and interns are taught to

critically analyze drug promotionalmaterial and
are sensitized to the "tricks of the trade" of the
pharmaceutical
companies.The "one on one" interview with th
e medical representative is perhaps the most
powerful tool of drug promotion
which is followed worldwide. Interns
are now beingtaught to "take control" of these
interviews and use them to get reliable
information.Videos have been made with the
assistance of the WHO and are being used to
traininterns on some aspects of dealing with medical
representatives. It is too early to judge
67

CHAPTER
5METHODOLOGY
&PROCEDURE OF WORK
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 logic
alconclusion in an objective and scientific manner. The present study contemplated
anexploratory 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
researchd e s i g n d e t e r mi n e s t h e d i r e c t i o n o f t h e s t u d y t h r o u g h o u t
a n d t h e p r o c e d u r e s t o b e followed. It determines the data collection method,
sampling method, the fieldwork andso on.
Nature of Data
Primary Data:
Primary data is basically fresh data collected directly from the target
respondents; it could be collected through QuestionnaireSurveys, Interviews, Focus
Group Discussions Etc.
Secondary Data:
Secondary data that is already available and published. It
could be internal and external source of data. Internal source: whicho r i g i n a t e s f
r o m t h e s p e c i f i c f i e l d o r a r e a wh e r e r e s e a r c h i s carried out e.g. publish
broachers, official reports etc.
External Source:
This originates outside the field of study like books, periodicals, journals,
newspapers and the Internet.

Data Collection
Primary data:
Primary data was selected from the sample by a se
l f - administrated questionnaire in presence of the interviewer.
SAMPLE SIZE:
S
a
m
p
l
e
s
i
z
e
:
1
0
0
S
a
m
p
l
e
a
r
e
a
:
N
e
w
D
e
l
h
i
S
a m p l e U n i t : O f f i c i a l s o f
m a n y p h a r m a c e u t i c a l

c o m p a n i e s , m e d i c a l Practioneers,
medical representatives in New Delhi
SECONDARYDATA:
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.
Thisincludes the overall design, the sampling procedure, the data collection
methods, thefield methods and the analysis procedures
Sampling Procedure Actually Employed:
The process employed to select the sample
was simple random sampling. Simplerandom 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 randomsampling, 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
thedata collected from the field. The study has used percentiles method and the
data are presented in the form of tables and diagrams.69

70

CHAPTER 6ANALYSIS
OF DATA

11. What type of Marketing Strategy would you

prefer to expand your Marketsize?
0%5%10%15%20%25%30%35%40%45%B2B
B2CBothB2B23%B2C32%Both45%
Fig 6.11:
Market size
B2B-------------------------------------------------------------23 PER CENT
B2C ------------------------------------------------------------32 per cent
Both ------------------------------------------------------------45 percent81
12.What type of Marketing Strategy
does you as More Profitable?
0%5%10%15%20%25%30%35%40%45%50%
B2BB2CBothB2B24%B2C47%Both31%

Fig 6.12:
More Profitable
B2B------------------------------------------------------------- 24 per cent
B2C ------------------------------------------------------------47 per cent
Both ------------------------------------------------------------31 percent82
13.
What do you think is the Major challenge from
the Marketing point of viewfor the
Pharmaceutical Industry in India?
Fragmentation of the market --------------------------- 38 per cent

2 D o yo u a g r e e th a t I n d ia s
p h a r ma c eu t i c al in du s t r y i s o ne o f t h e
f a s t e s t g r ow i n g segments of the Indian economy?
71

Agree -------------------------------------43 per cent

Strongly Agree --------------------------37 per cent
D i s a g r e e -- - - - - - -- - - - -- - - - - - -- - - - -- - - - - - -- - 0 9
p e r c e nt
S t r ong ly Di s a g r e e - --- - - - - - -- - - - -- - - - - - -- 0 4
p e r c e nt
Do not know/ Can not say ------------07 per cent
0%5%10%15%20%25%30%35%40%45%AgreeStro
ngly AgreeDisagreeStrongly DisagreeDo not know/
Can not say

Agree43%Strongly Agree37%Disagree9%Strongly
Disagree4%Do not know/ Cann o t s ay 7%
Fig 6.2: The fastest growing segments of the Indian
economy
Interpretation:

Indias pharmaceutical industry is one of the

fastest growing segments of theIndian economy
and this is also one of the vital industrial segments
which aredirectly related to the health of the nation.

Market risk due to lack of price control

mechanism-22 per cent
MNCs -----------------------------------------------------23 per cent
Others -----------------------------------------------------17 per cent
0%5%10%15%20%25%30%35%40%fragmenta
tion of the marketrisk due to price

controlmechanismMNC'sOthersfragmentation of
the market38%risk due to
pricecontrolmechanism22%MNC's23%Others1
7%
Fig 6.13: Major challenge from the Marketing83

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/ Can not say ---------04 per cent
0%5%10%15%20%25%30%35%40%45%5
0%AgreeStrongly AgreeDisagreeStrongly
DisagreeDo not know/ Can not say
Agree50%Strongly
Agree32%Disagree10%Strongly
Disagree4%Do not know/ Cannot say4%
Fig 6.3: Pharmaceutical segments
Interpretation:

The structure and the dynamics of the

pharmaceutical industry are
differentf r o m t h a t o f o t h e r i n d u s t r i a
l domains. This is what necessitate
s t h e pharmaceutical sector to formulate a
unique marketing strategy to suit their indust
ry requirements and that appears to be

different, in practice and normativesphere,

from other industries.
Do you agree that institutional se
lling is quite prevalent when
i t c o m e s t o 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/ Can not say -----------10 per cent
0%5%10%15%20%25%30%35%40%45%Agre
eStrongly AgreeDisagreeStrongly DisagreeDo
not know/ Can not sayAgree44%Strongly

Agree30%Disagree10%StronglyDisagree6%Do
not know/Can not say10%
Fig 6.4: 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 respondentswere of the opinion that
institutional selling is quite prevalent in the
Indian pharmaceutical industry.74
5.Do you agree that the pharmaceutical
companies need to use innovativeand 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/ Can not say ------------02 per cent
0%10%20%30%40%50%60%AgreeStrongly A
greeDisagreeStrongly DisagreeDo not know/
Can not sayAgree60%Strongly
Agree37%Disagree1%StronglyDisagree0%Do
not know/Can not say2%
Fig 6.5: 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 nationrests, a deeper
understanding of the industry will make it
clear that
business practices and sales promotion measure
s are a common thing and gradually becoming

more aggressive and competitive among the pha

rmaceuticalcompanies in India.75
7.Out of the
following which one is more correct when it
comes to
t h e promotional strategy of pharmaceutical companies in the view of
thedoctors?
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/ Can not say ----------------------------15 per cent
0%10%20%30%40%50%60%They aim to inform aboutthe productThey aim to
persuade to purchaseOther motivesDo not know/ Can not sayThey aim toinform
about the product22%They aim to persuade to purchase60%Other motives3%Do
not know/Can not say15%
Fig 6.7: 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.77

8. Do you agree that unethical standards exist in

t h e p r o m o t i o n o f 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/ Can not say ------------05 per cent
0%10%20%30%40%50%60%AgreeStronglyAgreeDisagreeStronglyDisagreeDonotknow/
Can not sayAgree52%StronglyAgree20%Disagree20%StronglyDisagree3%Donot know/Can not
say5%
Fig 6.8: Promotion of pharmaceutical products in India
Interpretation:

Adherence to ethical standards while pursuing the promotional strategy for

sellingtheir products is a concern in the pharmaceutical industry. It is an accepted
fact thatthe promotional measures does 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.78

9. Your recommendation to the industry and government regarding

thepromotional strategy of the pharmaceutical companies? You can
choosemore than one option.
Implement, improve and monitor legislation ----------------- 74 per cent
M e a s u r e s t o i mp r o v e t h e t r a n s p a r e n c y o f d r u g c o mp a n i e s ma r k e t i
n g 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/ Can not say ---------------------------------------- 01 per cent

0%10%20%30%40%50%60%70%80%90%
Implement, improve and monitor legislationMeasures to improve thetransparency of drug companiesmarketing
activitiesStop the practice of gifts todoctorsEnsure codes of conduct on drug promotionOther measuresDo
not know/ Can not say

Fig 6.9: The industry and government regarding

Interpretation:

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

tacklingthe health challenges their involvement in the promotion of
medicines presents aserious conflict of interest. It is equally important
that health professionals haveaccess to independent and up to date advice
on medicines so that they can makeinformed judgments about the most
appropriate medication for patients.

93

CHAPTER 7FINDINGS,
INFERENCES&
RECOMMENDATIONS

FINDINGS, INFERENCES & RECOMMENDATIONS

India's pharmaceutical market currently stands ninth in the
w o r l d m a r k e t f o r pharmaceuticals with a 1.5% share. The market was
valued at more than $3 billion lastyear (1998). At its annual growth rate of
15% (almost double the world's 6% annualgrowth rate), this market is
expected to reach $6 billion by 2001 and should more thandouble 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
$90million now to more than $350 million in 2009.Current demand in the Indian
pharmaceutical sector stands at about $4 to $5 billion, andis 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 inJapan, $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, butalso 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 inthe 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. Foreignfirms also find it
difficult to operate in India due to arbitrary Bureau of Industrial Costand 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 inthe 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 govern
ment toregulate prices for every single firm, and pressure from the World Trade
Organizationis also speeding up discussions within the national
government to improve
patent protection. As a result, foreign pharmaceutical firms can expect improved
marketopportunities in India's enormous drug market over next several years.The
Indian pharmaceutical industry is highly fragmented -- there are now
more than20,000 domestic manufacturers of end-use pharmaceuticals, particularly
because of theindustry'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, especiallyin the bulk drug markets, with profitability falling as
demand expands.94

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 thelargest sector in the country's pharmaceutical market.
Indias bulk drug sector alsomakes up about 6% of the international bulk drug
market. Drug intermediates are usedas raw materials for the production of
bulk drugs, which are either sold directly
or r e t a i n e d b y c o mp a n i e s f o r t h e p r o d u c t i o n o f f o r mu l a t i o n s . F o r
mu l a t i o n s c a n b e subdivided into generic drugs and branded or "ethical"
drugs, the latter of which aremade under process patent and sold under a
separate brand name. Expected shorttermg r o w t h f o r t h e t w o t y p e s o f d r u g s h a s b e e n 2 0 % f o r b u l k
d r u g s a n d 1 5 % f o r formulations.The import of finished
pharmaceuticals is almost negligible, and confined to veryspecific types
like anti-cancer drugs. In 1994, the import of drugs, pharmaceuticals
andintermediates 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 andother hormones, and tetracycline and
its preparations.Essential drugs comprised of antibiotics, antibacterial, anti
-TB, anti-parasitic, andcardiovascular constitute a major portion of turnover of
the industry. Indian companiesdominate this class of drugs with a market share of
71%. Multinational companies arereluctant 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
isc o n t i n u o u s l y i n a s t a t e o f d yn a m i c t r a n s i t i o n . I n d i a n p h a r ma c e u t
i c a l i n d u s t r y i s climbing up the value chain from bringing a pure reverse
engineering industry focus ondomestic market. The industry is moving towards
basic research driven expert orientedglobal presence and providing wide range of
value added quality product and services.The pharmacy formulation market varies
radically from the consumer market in manyways. 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 onlyin medicinal magazines, journals etc., through medical
representatives. It is not a meanof mass communication, which is usually
applicable to consumer products. In the95