Organizational Structure Running A Successful Business
PROBLEMS AND PROSPECTS PHARMA PRODUCT SELLING..
1. 1
Introduction::
The pharmaceutical industry is the world's largest industry due to worldwide revenues of
approximately US$2.8 trillion. Pharma industry has seen major changes in the recent
years that place new demands on payers, providers and manufacturers. Customers now
demand the same choice and convenience from pharma industry that they find in other
segment. Indian Pharmaceutical Industry is poised for high consistent growth over the
next few years, driven by a multitude of factors. Top Indian Companies like
Ranbaxy, Dr.Reddy's , CIPLA and Dabur have already established their
presence. Indian companies have only recently entered the area. The Indian
pharmaceutical industry came into existence in 1901, when Bengal Chemical &
Pharmaceutical Company started its maiden operation in Calcutta. The next few decades
saw the pharmaceutical industry moving through several phases, largely in accordance
with government policies. Commencing with repackaging and preparation of
formulations from imported bulk drugs, the Indian industry has moved on to become a
net foreign exchange earner, and has been able to underline its presence in the global
pharmaceutical arena as one of the top 35 drug producers worldwide. Currently, there are
more than 2,400 registered pharmaceutical producers in India. There are 24,000 licensed
pharmaceutical companies. Of the 465 bulk drugs used in India, approximately 425
are manufactured here. India has more drug-manufacturing facilities that have been
approved by the U.S. Food and Drug Administration than any country other than the US.
Indian generics companies supply 84% of the AIDS drugs that Doctors without Borders
uses to treat 60,000 patients in more than 30 countries. There can be several challenges
for pharma marketing with global channels opening up from all directions it has become
an art of its own kind.
As the fourth largest market in the Asia Pacific Region and an important player among
the fast growing pharmaceutical markets, India has also witnessed considerable growth in
its expansion activities with the establishment of IPR, rising middle class population,
emerging rural markets and improvement in medical infrastructure facilities. Amongst
the fast paced global market, Indian pharma market occupies a predominant position and
is the second fastest growing sector in India, after IT. The statistic shows that the
Compound Annual Growth Rate (CAGR) during 2004-08 for India’s pharmaceutical
market was 13.8 per cent. In view of the significant market growth, it is estimated that by
2014 and 2019, overall pharmaceutical sales will reach Rs 1539 bn (US$40.18 bn) and Rs
2648 bn (US$ 70.60 bn) respectively. A key requirement for growth is undeniably the
country’s booming economy and greater state involvement in the health sector.
Apart from the fast growing economy, India’s large, growing and ageing population is a
major attraction for pharmaceutical firms. According to the UN Population Division, the
number of people living in the country will increase from 1.04 bn in 2000 to 1.41 bn in
2020 – a rise of 36 per cent At the same time, the population aged 65 and over will
increase from 4.3 per cent to 6.3 per cent over the same period, though the
pharmaceutical expenditure in 2009 was 1.24 per cent of GDP, which is just below the
global average of 1.40 per cent. The inevitable growth of pharmaceutical sector in the
country is vivid from the above factors.
2. 2
The Indian Pharmaceutical industry is highly fragmented with about 24,000 players
(around 330 in the organized sector). The top ten companies make up for more than a
third of the market. The Indian pharma industry (IPM) grew by 16% YoY in 2012 to `
629 bn. It accounts for about 1.4% of the world's pharma industry in value terms and
10% in volume terms.
Besides the domestic market, Indian pharma companies also have a large chunk of their
revenues coming from exports. While some are focusing on the generics market in the
US, Europe and semi-regulated markets, others are focusing on custom manufacturing for
innovator companies. Biopharmaceuticals is also increasingly becoming an area of
interest given the complexity in manufacture and limited competition.
The drug price control order (DPCO) continues to be a menace for the industry. There are
three tiers of regulations – on bulk drugs, on formulations and on overall profitability.
This has made the profitability of the sector susceptible to the whims and fancies of the
pricing authority. In connotation, with pricing policy of 354 drugs,NLEM (National list
of essential medicines) was released, which covered the list of the drugs which the
authority intends to put under price control. The policy has been stiffly opposed by the
pharmaceutical industry.
Introduction of GDUFA (Generic drug user fee Act) in US. As per this act, the generic
companies are required to pay user fees to USFDA, for application of drugs and
manufacturing facilities. This fee will be utilized by USFDA to engage additional
resources in order to reduce current and pending applications and speed up the approval
process. (Note: This act was passed in 2011, which was signed into Law in July 2012).
The R&D spends of the top five companies is about 5% to 10% of revenues. This ratio is
still way below the global average of 15% to 20% of sales. Indian companies have
adopted various strategies for their R&D efforts. Some have entered into collaboration
and partnership agreements with innovator companies; others have out-licensed their
molecules for milestone payments. Hiving off R&D units into separate companies has
also become a preferred option for many Indian pharma players. That said, given that the
research pipelines of Big Pharma are drying up, they have now begun to dabble in
generics. In this regard, these innovator companies are either buying out Indian firms or
are forging alliances with them.
Objectives::
The objective of the study is find problem and prospect of medical product selling of
Dankuni Regeion with the help sample of 50 no of sales staff and some doctors &
suppliers.
Study area::
Different studies have been done on problem & prospects medical products selling
previously. The present investigation has been carried out at Dankuni Region of west
3. 3
Bengal with the help of 50 no of sales staff (GSK Ltd) and some doctors & suppliers. .
For proper and orderly study the selected salesmen are asked to give their views.
Methodlogy::
The present study was a descriptive research conducted between Dec-2012-Feb
2013(3months).The study comprises on some selected open-ended & close-ended
questions to 50 no of sales people of age group between 30 - 56 years and some doctors
& supplier of selected questions (Table 1).
Table 1::
Sales people::
1. How many customers do you meet every day?
2. What types of medicine do you sell every day?
3. What do you think about your profession?
4. What is the level of satisfaction you have got in this profession?
5. Do you find any future in this profession?
6. What is your food habit during working time?
7. What types of behavior do you expect from the customer (Doctors &
Distributors)?
8. What types of behavior do you got from them?
9. Does this profession create any problems regarding your family matter?
Company::
1. Are you satisfied with your salary?
2. What is your boss first reaction when you failed to achieve target?
3. What is your reaction in perspective of your boss’s reaction?
Suppliers::
1. Do you face any problems regarding supply of product as per sales people
Commitments?
2. Do you think sales people are satisfied with their job?
3. What types of behavior do you got from them?
Doctors::
1. What types of behavior do you got from the sales people?
2. Are think that they are satisfied with their job?
3. What is your first reaction when you meet with the sales people?
4. 4
Sample size::
N=50 (Where n= No of Respondents)
The primary data collect from 50 no of sales people of GSK Ltd of age group between 30
- 56 years and some doctors & supplier doctors to present the entire profession of
Dankuni Region of W.B.
Data collection::
Data collection is done in one stage with face to face conversation and over telephone. Of
50 no of sales people of age group between 30 - 56 years and some doctors & supplier
doctors of Dankuni Region of W.B. of GSK Ltd.
Discussion::
The study tells that the sales people of GSK Ltd are visit average 18 persons (Dr.-
11/Chemist-6/Store-1) every day as per data. They sell different types of medicine like
Paracetamol, Calcium & Health drink ( Horliks). Maximum people (70%) are enjoy their
work while few (20%) are not happy with their profession and some of them(10%) trying
for substitute work according to their qualification. More than 30% people sometimes get
tired due to busy scheduled and heavy pressure of target and some times get depressed.
Maximum time they don’t give much time for food and can’t maintain proper fooding
habit. More than 80% people think that there is a good future in this profession. They eat
light food like fruit, fruit, juice, biscuits & sandwiches. They don’t like to take heavy
food during their visit. They expect good behavior from the customer but get average
behavior from them (77%). More than 45% sales people think that selling profession
create a problem in their family life but maximum people don’t think like that.
Maximum people (80%) are satisfied with their income (Salary + Incentives).When they
don’t achieve their target the team leader try to find out the problem and give proper
solution for that. Sometime get angry with them but most of the time help them according
to their expectation.
Maximum supplier(79%) are very much satisfied regarding supply of the medicine and
get medicine according to their(sales people) commitment. They think that maximum
(74%) sales people are satisfied with their job and try to maintained good behavior with
them (supplier).
Doctor’s thinks (60%) Sales people are very much professional and intelligent people and
maintained good behavior with them. Doctor thinks that the maximum sales people are
satisfied with their job but sometime get board due to repetitive work in nature.47%
doctor don’t like to attend to many sales call and try to maintained good behavior with
them.
5. 5
Conclution::
FY12/CY11 was a challenging on domestic front. The companies witnessed a sluggish
growth in the 1HFY12, on the back of severe competition in the acute segment.
Increasing competition from MNCs and unlisted companies impaired the growth of local
players. Though the Indian Pharma Industry grew by 16% vs 18% in FY11, large part of
the growth was contributed by the chronic segment.
MNC pharma companies continued to excel during FY12/CY11. Of the 25 top selling
brands, 13 were from the MNCs. On the margin front, performance was not good. Most
of the companies saw increase in raw material and employee costs. Companies continued
to increase their MR strength and expand their reach to rural areas.
In the US, generic companies witnessed robust growth, as billion dollar products
like, Lipitor, Zyprexa, Plavix came off patent. On the other hand Europe continued to
face pressure.
Rupee depreciation was one important aspect which helped the industry. Many
companies benefited due to rupee depreciation, especially the companies who had not
hedged their receivables.
Many companies had received warning letters from the USFDA in the past. The year saw
some green signals from US regulator. While Aurobindo, Cadila and Claris got USFDA
clearances, Ranbaxy entered into a consent decree with USFDA in order to gets its two
manufacturing facilities re-approved by the US authorities.
The product patents regime heralds an era of innovation and research resulting in the
launch of new patented product launches. In the longer run, domestic companies would
face fresh competition from MNCs, as they would make aggressive new launches.
However, the latter would most likely be subject to price negotiation.
Drugs having estimated sales of over US$ 80 bn are expected to go off patent between
CY12 and CY15. With the governments in the developed markets looking to cut down
healthcare costs by facilitating a speedy introduction of generic drugs into the market,
domestic pharma companies will stand to benefit. However, despite this huge promise,
intense competition and consequent price erosion would continue to remain a cause for
concern.
The developing markets viz; Brazil, Turkey, Mexico, Russia etc are expected to witness
growth of around 25% during 2014-15. Like India, emerging markets are also “Branded”
by nature, thus Indian companies are well poised to capitalise on the opportunities in
these markets as well.
The life style segments such as cardiovascular, anti-diabetes, anti-depressants and anti-
cancers will continue to be lucrative and fast growing owing to increased urbanization
and change in lifestyle patterns. High growth in domestic sales in the future will depend
on the ability of companies to align their product portfolio towards the chronic segment
6. 6
as the lifestyle diseases like hypertension, congestive heart failure, depression, asthma,
and diabetes are on the rise.
Contract manufacturing and research (CRAMS) is expected to gain momentum going
forward. India’s competitive strengths in research services include English-language
competency, availability of low cost skilled doctors and scientists, large patient
population with diverse disease characteristics and adherence to international quality
standards. As for contract manufacturing, both global innovators and generic majors are
finding it profitable to outsource production. Although the scenario has yet not improved
for this space after the financial crisis, it is expected to improve going forward as the
pressure to prune costs increases.
As per the McKinsey report, Indian pharmaceuticals market is expected to grow to
US$ 55 bn in 2020 and has a potential to reach US$ 70 bn by 2020.
As the sales division and the sales person are the back bone of the company and all the
planning are failed if they failed not only that the problem and prospects of the
pharmaceutical industries are very much affecting the sales man life and the company
policy as we discuss above. From that above discussion and on the basis of discussion of
questioner we get following problem & prospects of medical products selling:
Problems::
• Loneliness can be a problem for medical sales representatives, who are often
away from their home base for long periods of time. In spite of the rewards, this
can be a very stressful job, with some reps experiencing burnout after some years
in the role.
• The working day is often extended by travel, which has the potential to disrupt
domestic routine and family and social life. However, many appreciate getting to
know their customers in social settings and enjoy the benefits of corporate
entertainment.
• Travel within a working day is frequent, absence from home at night is
occasional and overseas work or travel is uncommon.
• Food habits & family life create problem.
Prospects::
• Range of typical starting salaries: 18,000 – 24,000 (salary data collected Jan
13).
• Range of salaries with three to five years' experience: 25,000 – 35,000 (salary
data collected Jan 13).
• Range of salaries at senior levels: 30,000 – 55,000 (salary data collected Jan
13).
7. 7
• The range of salaries varies according to level and experience. Successful sales
staff can achieve high earnings consisting of a basic salary supplemented with
performance-related pay.
• Many companies offer other incentives and benefits such as a quality company
car, private health insurance, holidays abroad and similar rewards.
• Working hours typically include regular extra hours, but not weekends or shifts.
The car is a mobile office, but a room at home is also necessary for storing
promotional products and samples.
• Self-employment/freelance work is not possible. It may be possible to offer a
service to companies launching new products and wanting extra coverage, though
this requires a lot of contacts.
• The prospects for re-employment after a career break are good. Part-time work is
possible.
• Opportunities occur throughout the UK, but the job usually involves
responsibility for a particular geographical area. Good sales staff may find
themselves head-hunted from one company/region to another.
• One can rise from the position of a medical representative depending on his
caliber to higher positions in sales division or can enter into marketing
division.
References::
1. http://www.wikipedia.org.
2. http://www.google.co.in.
3. McKinsey consultancy.
4. The Indian Pharmaceutical Industry, Feb2012, ICRA.
5. The International Pharmaceutical Industry, Feb2012, ICRA.
6. http://www.iitk.ac.in.
7. GSK Sales people.