Overview of Pharma retail:
q
q Domestic pharma retail market - Rs 27,903 crore growing at 14.2%
q Institutional sales - Rs 7,417 crore
q Growth rate of about 10% over the last few years and is expected to touch US$ 12 billion by 2010.
q Alternative medicine – Ayurvedic market Rs.38 b
q OTC market Rs. 35 b, Growth 18-20%
q Per capita drug expenditure Rs. 220 per annum
(by McKinsey) by 2010
q The Indian pharmaceutical industry ranks…
q 4th in terms of volume (with an 8% share in global sales)
q 13th in terms of value (with a share of 1% in global sales)
q Produces 20-24 % of the world's generic drugs (in terms of value)
q 17th in terms of pharmaceutical export value
Pharma Retail Facts…
n 60,000 distributors servicing 8,00,000 pharmacies across the country.
n Two-thirds of all the stores in
n Only a third are in rural areas despite the fact that 70% of the population lives in rural area.
n 70 % of pharmacy outlets are in 5 states, which comprise 30 % of
n Fake Drug market accounts for 20%.
n Employment to 2.86 million people.
Organized Vs Unorganized
In Pharma Retailing there are two types of sectors :
1.Organized Pharma Sector : - 2 to 3% (app.)
- Pharma chains like Apollo Pharmacy , Med Plus, Subhiksha, Religare Wellness etc.
2.Unorganized Pharma Sector :
- 97 to 98% (app.)
- Unknown and small retail outlets
Organized retail pharmacies are in a nascent stage in
Nitin Gokarn, senior manager of supply-chain management (SCM) at Merck
Advantages to Organised Pharma Sectors/ Pharma chains:
1. Economies of scale: The large players in pharma retail sector buy Raw material in bulk quantity, process in bulk quantity, package in big lots, use high technology in processing, packaging and transporting, so they get the finished drugs at the lowest possible prices.
2. Technology driven: These large players use modern, latest and automated machinery in manufacturing Drugs, in Inventory management, supply chain management, use of latest display tools, free samples to Doctors and hospitals etc.
3. Retailing their own pharma brands/generic brands along with competitors brands : It helps in promoting their own brands/generic brands which can fetch more profits using push strategy through doctors and hospitals by providing free samples, sponsoring free treatment to patients.
4. Passing advantages to patients and consumers: With the optimum use of available resources and technology, some price. Advantages can be passed over to patients.
5. Increase in market share and profits: With all the advantages from points 1 to 4 above the pharma chains can achieve higher market share and profits.
6. Discount parameter: According to the latest self-study we have found that up to 10% discount is offered by retail pharmacy chains like Apollo, Hetero, Subhiksha and Med Plus.
DISADVANTAGES TO SMALL RETAILERS:
1. No economies of scale to small medical stores: These small stores buy in small quantities from drug distributors with higher prices with no schemes thereby it reduces profit margins
2. Small geographic area: These small retail medical shops operate from small lanes and by-lanes where it could cater to limited range of patients who belong to those surroundings only. This results in lower turnover of sales resulting in lower profits.
3. No home delivery services: These small medical shops generally run on low man power or some times run as a family business and therefore cannot effort to hire persons for home delivery of medicines.
4. Winding up of medical shops: Notwithstanding the business threats from large pharma chain stores most of these stores close their stores by sustaining huge loses.
5. Losses from expiry of medicines: New formulas are frequently launched into the market and doctors always want to try new formulas on patients thereby sales of old formulas are slowed down which causes huge quantity of expires of medicines which in turn result in heavy loses.
6. Discounts can not be offered: Small medical shops buy in smaller quantities and cannot avail the advantage of various schemes on quantity purchases, there by their unit purchase prices are higher and can not offer discount to patients/ customers.
Growth Enablers
Off shoring of R&D Activities
ü Low cost of doing R&D in
ü Recognition of R&D as important growth driver by Indian companies
ü Increase in Investment in R&D Activities from 4% in 2004-05 to 7.7% in 2005-06 as a percentage of Sales
Fiscal Reforms
ü Conferred Tax Deduction for expenses related to R&D
ü Reduced Interest Rates for Export financing
ü Reduction in Import Duties
ü Favorable economic environment for FDI in R&D
Accelerating Clinical Trials
ü Bridge between New Drug Discovery and New Drug Approval
ü Alone accounts for over 50% of the overall budget for the new drug development
ü Large Patients pool with genetic diversity
ü Lower per patient cost of conducting trial in
ü Clinical Research Outsourcing (CRO) Market stands at around Rs. 300 crore and growing at 30% annually
Proven Prowess in Chemistry and Data Management
ü Abundance of highly trained and technically skilled clinical research and medical professionals
ü Strong domestic capabilities in Data Management and IT
Increasing Mergers & Acquisitions
ü Rush of International Acquisitions by leading Indian Pharmaceutical Firms
ü Acquisitions intended to give Indian Drug Firms wide geographical footprints
ü Some of the key acquisitions include (1) Dr. Reddy’s acquiring Betapharm, a large German Generic player, & (2) Ranbaxy acquiring Terapia, largest Generic company in
Regulatory Reforms
ü Strengthening of Legal framework to curb production of spurious drugs
ü Formation of centralized National Drug Authority (NDA)
Pharma Verticals…..
Prescription
Diagnostics:
Baby Care
• Baby Consumables
• Diapers
• Feeders & Accessories
Hair Care
• Color
• Hair Accessories
• Hair Gel/Hair Creams
• Hair Oil/Creams/Gels
• Shampoo/Conditioners
Impulse
• Candy & Gums
• Chocolates
• Tissues
Oral Care
• Toothbrushes/Accessories
• Toothpaste/Powders
Skin Care
• Body Oil/Massage Oil
• Cream/Lotion
• Face Wash/Scrubs
• Loreal
• Sun Lotions
• Vichy
Toiletries
• Bath Accessories
• Deodorants/Colognes
• Feminine Care
• Male Grooming
• Perfumes
• Soaps/Bath Liquids
FMHG (Fast Moving Health Goods)
Health Food
• Health Beverages
• Health Snacks
• Home Health Care
• Diagnostics
• First Aid And Wound Care
• Foot Care
• Support Systems
OTC
• Analgesic & Pain
• Anti Acne
• Ayurvedic
• Cold Cough
• Diabetic
• Digestives
• Eye Care
• Health Supplements
• Homeopathic
• Insecticides
• OTC/General
•
• Vitamins
Five Major Players Are…..
- Apollo Pharmacy
- 98.4 Pharmacy
- Subhiksha Pharmacy
- Guardian Pharmacy
- Religare
| Flagship co. | Some of the players | No. of stores | Location covered |
| Apollo Hospitals Enterprises | Apollo Pharmacies | 750+ | In 17 states |
| Guardian Life care Pvt. Ltd. | Guardian Pharmacy | 165 | NCR, Rj, UP, |
| Ranbaxy | Religare Wellness | 125+ | Utter Pardesh, Haryana, NCR, |
| Medicine Shoppe | Medicine Shoppe | 130 | UP, |
| Dial for Health | Dial for Health | 105 | |
| Global Healthline | 98.4 Degrees | 32 | NCR |
Apollo Pharmacy:
n 740 Plus outlets across India, in 17 states
n 24-hour pharmacy chain
n 1000 units at the end of profit year 2008.
n Apollo Pharmacy has tied up with ITC
E-choupals and Godrej Aadhaar to provide quality medicines to rural
98.4 Pharmacy:
• 98.40TM is located in twenty seven locations.
• Plan to open 300-400 stores by 2011.
Subhiksha Pharmacy:
n Subhiksha
n Present nationally across 1000 outlets and spread across more than 90 cities.
Guardian Pharmacy:
n Guardian Life care Pvt. Limited is
n company has 160 outlets in 20 cities and is adding 2 new stores each week
Religare
n Fortis Health world 25 stores transformed in to Religare Wellness.
n Religare Wellness acquired in Delhi-based CRS Health 30 pharmacies.
n About 70 stores of
Service Level:
Ø Friendly pharmacist: Every Pharmacy outlet is manned by our own competent pharmacist, who's always there to help customers with their medication needs.
Ø Free Reminder Service: They give a friendly reminder call about your medication as per the request. If you wish to sign up for reminder service, then fill in your details.
Ø Helpline services: For any queries related to your medication, call on there helpline service numbers in any location across the country.
Ø
Ø Free health camps: Time to Time they conduct free health camps in the country.
Ø Free Health Insurance: Free Health Insurance of Rs.20,000/-, once your purchases cross Rs.6,000/- a year.
Ø
Ø Health newsletters: Free Health Newsletters for patients.
Primary research:
Fig 1 shows the age groups
The given pie chat shows that, we can take data from the differen age group. Maximum are lying in between the 15 to 35 (70% of the population)
Fig.2 shows the occupation of the population
Given pie chart shows that, most of the respondents (58% of them ) are bussinessman.
Fig.3 shows the decision pattern of the buyers.
The research results shows that most of the respondents purchase medicine on doctor’s prescription while relatives suggestions and chemist’s advice, fall on same scale.
This research shows that only 10% of respondents like to go more than 3 kms for purchasing medicine while 38% go up to 1 km and 32 % go up to 500 mtrs.
For cheking whether it is genuine medicine respondents believe on family chemist and cross checking by doctors while 28 % of respondents buy from branded chemist.
In popularity of organised pharmacy store 98.4 at first and then Guardian, Apollo pharmacy, CRS health come respectively.
In terms of expectation respondents want genuine medicine at first then after they look discount, quality of service, loyality program, and billing respectively.
In Guragaon most of the respondents buy from organised pharmacy retail store.
Most of them buy from organised retail store because of qualitative personal care products and shopping mix.
There are only 2 reason for not buying from organised retail store are 1. Because medicine required in the emergency 2. Unavailability of medicine.
The problem respondents face in buying medicine from unorganised store are unavilability of medicine most and then come late hoome delivery, substitute ones, not genuine medicine respectively.
Respondents like return and exchange policy of a organised retail store most and then they like information about new offers, regular reminder and prescription tracking and tracing.
It shows that there is no certainty that a person how many times or after how many days visit a pharmacy store.
Most of the respondents buy medicine by their self because our sample is mostly youth.
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