This document summarizes key information about business opportunities in rural Indian markets. 1. Rural India accounts for over 68% of India's population of 1.2 billion people and is undergoing significant changes with increased access to technology and infrastructure development. 2. Rural households now have greater access to phones and computers compared to urban households, and internet usage in rural India has surpassed urban areas. Incomes are also rising due to improved farming yields and growth in non-farm industries in rural locations. 3. However, the rural pharmaceutical market remains underdeveloped due to issues like inadequate healthcare infrastructure, lack of awareness about diseases, lack of affordability of drugs, and poor accessibility of distribution systems in remote rural areas.

1. MedicinMan August 2012 >>> Lead Article
IS THERE BUSINESS
IN RURAL MARKETS? Dr. Surinder Kumar
Sharma
“According to census
2011, 91.21 million
households in rural India
have access to phone,
compared to 64.67 mil-
lion households in Urban
India. Internet usage in
rural India has overtak-
en usage in urban India.”
users in rural India than in urban. TV and dish antennas are common sight in
Medicin Man rural India. 56 millions households have a TV, compared to 60 million
urban households.
Government is aggressively spending for rural development. Active steps
“India lives in its villages.”
are being taken to improve healthcare. Rashtriya Swasthya Bima Yojna
- Mahatma Gandhi
(RSBY) was launched in 2008. Its purpose is to cover all BPL families with
And after so many years, we still wonder – is a health insurance of Rs. 30,000/ (government or private hospital treatment,
there a business in rural markets? no age limit and pre-existing ailments are also covered).
According to census 2011, out of 1.2 billion One thousand more PG seats are sanctioned for private medical colleges,
Indians, 68.84% live in Rural India. and 4000 more seats are created in existing government colleges. Land
required to open a medical college is being reduced from 25 to 20 acres. To
Rural India is undergoing a tremendous
meet the shortage of teachers in medical colleges, age-bar for faculty posi-
change – machines are replacing man and
tion is being increased from 65 to 70 yrs. To encourage rural healthcare,
tools and as a result farmers and their families
50% PG seats are allocated to doctors working in rural areas.
have a lot of time for non-farming activities.
There is narrowing of rural urban divide due to:
According to census 2011, 91.21 million
households in rural India have access to 1. Better income from farming
phone, compared to 64.67 million households 2. Increasing income from non-farming avenues and immigrants
in Urban India. Computer is not a magic-box 3. Industry projects in rural areas
or a genie for a rural folk anymore. There are
4. Infrastructure development
8.64 million households with a computer in
rural India. Internet usage in rural India has 5. Increase in literacy and awareness
overtaken usage in urban India - more Internet 6. Affordability of technology & white goods
Read the complete issue online at www.medicinman.net

2. MedicinMan August 2012 >>> Lead Article
Income from non-farming sector is increasing. Now
around 50% income in rural India is being generated from
trade, food processing, industry, and money brought back
by emigrants. Better procurement prices for crops, a run of
good monsoons, cash crops, etc. have increased disposable
income. Rural folks are buying cars, flat screen TVs, mi-
crowaves and high-end mobile phones. Rural income is
43% of national income. In terms of absolute numbers dis-
posable income and middle class is more in rural India.
Literacy is improving in rural India - there are 493 million
literates in rural India, 285.4 million in urban.
In spite of its huge potential, as indicated by various pa-
rameters mentioned earlier, rural markets‟ contribution to
pharma remains abysmal; even its growth, over the past
few years, has been suboptimal. What are the factors that
are preventing the rural pharma market to achieve its po-
tential?
Road Blocks
Inadequate Infrastructure interiors one needs strategic approach, rather than tactical,
There are gaping holes both in government as well as pri- as ROI period is long.
vate sector‟s initiatives to create a good healthcare infra- What is the way forward?
structure. There are gross inadequacies - be it the number
of hospitals, dispensaries, staff, or doctors (only 1 doctor To develop rural markets, one needs a multipronged ap-
per 3000 people in rural area, compared to 2/3000 in ur- proach, and need to:
ban). Quacks rule the roost. 60% of rural diseases do not 1. Improve Healthcare System
get treated at all. 2. Create Awareness
Lack of awareness 3. Provide Affordability
Lack of awareness towards diseases, even the highly prev- 4. Ensure Accessibility
alent ones, continues. Superstition and belief in witchcraft Improving healthcare system
is still rampant. Most of folks still believe that diseases are
It shall be viewed as a community responsibility and cor-
due to God‟s curse, and have fatalistic attitude towards
porations shall take active responsibility. Various steps that
health and disease.
can be taken to develop and robust healthcare system in
60000 rural India are:
50000 10678 1. Partnering with government, NGOs and other key
40000 7435
8725
10517
stake holders
RURAL
9513
30000
6766 8392
CLASS II TO VI 2. Training rural doctors and supporting staff
16998 METROS
7084
20000
9937
12351
14728 CLASS I TOWNS 3. Providing microfinance to doctors, retails, etc. to cre-
10000 17314
ate healthcare infrastructure
11686 13622 15291
0 Some of the initiatives taken in this area are:
2009 2010 2011 2012
1. MSD India launched Project Transcend, a program to
Lack of affordability train GPs on evidence based management of diabetes.
Many drugs remain expensive. Rural masses have stronger 2. Sanofi Aventis‟ PRAYAS - a program to meet rural
value for money. A few days‟, or a little, suffering is pre- India‟s healthcare needs and to bridge the gap by train-
ferred to spending money on medicines. ing rural doctors - plan to train 150,000 doctors across
India.
Poor accessibility
Creating awareness
Highly disbursed markets make distribution expensive and
a logistic nightmare. Maintaining cold-chain or special 1. Educating rural masses about safe and reliable reme-
storage conditions is a challenge due to erratic electricity dies for common ailments
supply. To establish a dependable distribution system in 2. Partnering with rural institutions and NGOs
Read the complete issue online at www.medicinman.net

3. 1
MedicinMan August 2012 >>> Lead Article
3. Making use of annuals fairs, weekly haats and man- Ensuring Accessibility
dis to spread awareness Highly disbursed market and thinly populated area make
Some aspiring initiatives, which have done good to setting an effective distribution system a nightmare. Main-
both company as well as masses are: taining cold chain etc becomes very difficult due to frequent
1. Novo Nordisk Education Foundation is undertaking power failures. Various options could be:
massive diabetes control program that involves 1. Company delivery vans
screening, spreading awareness and training doc- 2. Pooling of resources by collaborations between compa-
tors. nies to set up viable distribution channels
2. SPARSH, a multilingual helpline for diabetics to 3. Developing products suitable for rough storing condi-
support Januvia and Janumet. tions
3. NPL had run „Teach more, reach more‟ campaign 4. Mobile clinics and mobile pharmacies
to educate masses about epilepsy. 5. Post offices duplicating as pharmacies
4. J&J‟s Mobile health for mothers helped many. Ranbaxy and Pfizer have formalized an alliance with ITC to
Providing affordability penetrate the rural markets for their over-the-counter (OTC)
1. Making medicine more affordable is very im- products.
portant. Companies can think of differential pricing Traditionally Indian companies, especially mid- & small-
strategy for rural areas, e.g. Microsoft has low pric- size, have a better penetration in rural and class II-VI mar-
es for its products for students. kets. Now multinationals (Indian & foreign) are becoming
2. Rural healthcare insurance can help decreasing the more aggressive in these markets. Every other day, there is
burden of payment on the individuals news of some or other company hiring to enter into rural
3. Training medical staff for cost effective disease markets. In view of these developments, mid- & small-size
management may help in establishing trust in allo- companies need to be proactive to make the most of the new
pathic medicines. markets created by these companies and, more importantly,
to protect their current business in these markets.▌
Arogya Parivar (Healthy Family), a low-profit social
initiative developed by Novartis, is a good example. Dr. Surinder Kumar Sharma is Head - Strategy &
This program is proved to be a commercially sustaina-
Business Development, TTK Healthcare Ltd
ble program.
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