Nepal New Emerging Pharma Market

Dr. R. K. Srivastava Nepal is fast emerging market. Total market size today stands around 5 billion.

There are around 350 companies. Market has around 4000 brands, which are either

local brands, Indian brands, or brands which are imported and sold. This market is

growing fast. With more professional approach it can give rich dividend to Indian

companies. Moreover, their operation in Nepal can give gateway to other SARC

countries like Bangladesh, Bhutan or even China due to proximity, low cost of

manufacturing and distribution logistics. It is heartening to know, during the recent

visit to Nepal at the invitation of No. 1 Pharma Company NPL, that many Nepali

companies are eager to start their operation in India or have joint ventures in Nepal.

Hindustan Lever, Dabur have done a good job in Nepal and got immense benefits

from such venture. There are many reasons to look at these options:

1 Market Size

According to Nepali Authority like DDA or Drug Manufacturing

Association, market is around Rs. 600 crores with Nepali companies

dominating with 30% and others are dominated by Indian/MNC companies.

10-15% is institution business. It is a prescription-based market often

influenced by Retailers.

There are around 37 Nepalese companies. Royal Drug Ltd. was the first

Nepali company to start their operation in 1972. There is No Bulk Drug

Units and raw materials are imported from India/China.

As per data available the top 15 companies based on sales are given below :

Rank Company Origin Value

(in crore)

M.S.

(%)

1 Nepal Pharma Nepal 13.2 3.85

2 Lomus Pharma Nepal 11.8 3.47

3 Aristo Indian 11.4 3.31

4 Deurali Janata Nepal 10.7 3.08

5 Knoll Pharma MNC 9.6 2.78

6 Dabur Indian 9.1 2.65

7 Lupin Indian 8.7 2.50

8 National Health Care Nepal 8.6 2.50

9 Hoechst MNC 8.1 2.35

10 Alkem Indian 7.8 2.27

11 Ranbaxy Indian 7.4 2.14

12 Cadila Pharma Indian 6.3 1.84

13 Cadila Health Care Indian 6.3 1.83

14 E Merck MNC 6.0 1.75

15 Novartis MNC 5.6 1.64

Source : Market Data

As per industry source, the actual sales are very high. NPL for example has

a turnover of 17 crore and is No. 1 company in Nepal.

The leading segments are :

Segment Percentage

Antiobiotic 24.7

Cough & Cold 7.1

Vitamins 6.6

Musculoskeletal

Anti Inflammatory

6.6

Dermatological 6.0

Antacid/Ulcerant 4.9

Cardiovascular 4.6

Amoebicides

Anthelmintics

3.9

Sex Hormones 2.4

Anti-anaemics 2.5

Others 30.7

Antacid/Ulcerant

5%

Vitamins

7%Antianaemics

3%Cardiovascular

5%

Dermatological

6%

Sex Hormones

2%

Antibiotic

24%

Musculoskeletal

Anti Inflm.

7%

Amoebicides/Anthe

lmintics

4%

Cough& Cold

7%

Others

30%

Antacid/Ulcerant

Vitamins

Antianaemics

Cardiovascular

Dermatological

Sex Hormones

Antibiotic

Musculoskeletal Anti

Inflm.

Amoebicides/Anthelmi

ntics

Cough& Cold

Others

Thus like India, Antibiotic segment is No. 1 segment followed by cough and

cold. Vitamins and anti-inflammatory are 3rd

& 4th

big segment. However,

Nepal in Dermatological segment is much larger which is not so when

compared to India. Similarly, Amoebicidal/Anthelmintic segments too are

important segment, which is contrary to Indian market potential. These data

can be useful in penetration of Nepal market.

The leading brands are

Rank Brand Company

1 Rabipur Hoechst

2 Polybion Merck

3 Megapen Aristo

4 Digene Knoll

5 Althrocin Alembic

6 Keflor Ranbaxy

7 Vovran Novartis

8 Chyawanprash

Aval

Dabur

9 Sporidex Ranbaxy

10 Decold -

Data : 2003

The above table indicated that there is good scope for third and fourth

generation antibiotic and newer antiulcerant. Company can get good

reception and penetration provided company goes with the newer

molecules. Therefore, market is a virgin market for a highly professional

skilled company provided they have determination to emerge a leader.

2 Less Degree of Competition :

Competition with professional skills are missing. Due to lack of unskilled

field force a determined company with good strategy and skilled field force

can make a Difference in Nepalese market. There is need to adopt more marketing tools to become more aggressive in the market. This should

generate good productivity.

3 Low cost of Manpower :

Manpower cost is low in Nepal. Therefore, training and proper input

utilization should help the company to:

Shorten the period of break even point Achieve and improve ROI in shorter duration Generate higher productivity

This can be added advantage specially if a company plan to have joint

venture or set up its own factory. Hindustan Lever Ltd. and Dabur have got

tremendous advantage.

4 Availability of low cost raw materials and natural herbal ingredients.

China being nearer and abundance of natural resources offer a great

opportunity for Indian Company to manufacture the product and export to

China, India, Bangladesh etc. Low cost of manufacturing can give a

marketing edge.

5 Low investment on Area coverage :

Though doctors are spread over all the important cities of Nepal, however, a

field force of 30-50 should be sufficient to cover entire Nepal. Thus, 3-5

managers with a team of 6-7 medical representatives under him should be

sufficient to get maximum returns.

How to get into Nepal

In case company does not want to set up joint venture/company in Nepal, they can

get themselves registered by filling up from through stockist and pay $ 1500 as

inspection charge. Factory should be WHO GMP certified. Per product Rs. 2000/-

is paid once company is registered. Other documents required are finished products,

specification like size, colour, total weight, description regarding packing and

labelling, method of analysis, analytical report of company with endorsement from

Ita Lab/Shree Ram Lab or RDRL, Nepal of one batch, pharmacopeal standards,

manufacturing licence, price list with expiry date etc. This will help them to get

product registered.

Thus, Nepal offers a good opportunity to Indian companies. This will make their

presence in SARC countries and also help in penetrating China. Nepal government

encourages such activities with facilities. HLL/Dabur have taken lead. Many more

companies are looking at it. Similarly, many Nepalese companies too are thinking

of starting their operation in India. Coming months may be more exciting in these

respects.

DR. R. K. SRIVASTAVA IS A MARKETING CONSULTANT

Has published article in Economic Times, Pharma Pulse, Journal of

Marketing, BMA Review, Medical Marketing Media, USA etc.