7/29/2019 TOP FIVE PHARMA

1/236

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7/29/2019 TOP FIVE PHARMA

2/236

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7/29/2019 TOP FIVE PHARMA

3/236

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7/29/2019 TOP FIVE PHARMA

4/236

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7/29/2019 TOP FIVE PHARMA

5/236

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7/29/2019 TOP FIVE PHARMA

6/236

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7/29/2019 TOP FIVE PHARMA

7/236

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7/29/2019 TOP FIVE PHARMA

8/236

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A Project Report on Usage and Attitude of Consumer towardsPharmaceutical Over The Counter (OTC) Product in partialfulfillment of the requirement of Master in Management Studies(MMS) conducted by Rizvi Institute of Management Studiesand Research under the guidance ofDR. KALIM KHAN

Submitted by: REHAN FAQUIH ROLL NO. 83 MMS

(MARKETING) 2009-11Acknowledgement I would like to express my sincere gratitude to everyone whohave helped & supported me during the duration of my project. First of all, I would liketo thank the Almighty Allah without whom none of this would be possible. I am eternallygrateful for the invaluable mentorship of my guide, Dr Kalim Khan, Director, RizviInstitute of Management Studies and Research who acts as the backbone of the entiresupport system. His timely guidance, right from the initial stages of conceptual inceptionand through ongoing advice & encouragement to this day has made the completion of theproject possible. I also wish to thank Talha Khan, Nawaf Ghansar, Raees Basri and allthe medical professionals who were part of my respondent base for their invaluablesupport, suggestions and time during the course of the project. It will not be fair if I donot thank my parents for their undivided support and interest which inspired me andencouraged me to go my own way, without whom I would be unable to complete myproject. Last but not the least I want to thank my friends and fellow batch mates who

appreciated me for my work and motivated me to finish the project. Rehan Faquih

Roll No: 83 MMS (Marketing) 2009-2011

Declaration I declare that the project titled Usage and Attitude of Consumertowards Pharmaceutical Over The Counter (OTC) Product is a record of theresearch carried out by me during the academic year 2009-2011 under the guidance of myguide Dr. Kalim Khan, Director, Rizvi Institute of Management Studies andResearch. I also declare that this project is the result of my effort and has not been

submitted to any other university for the award of any degree, or personal favorwhatsoever. All the details and analysis provided in the report hold true to the best of my

knowledge. Rehan FaquihRoll No: 83 MMS (Marketing)2009-2011

CertificateThis is to certify that Mr. Rehan Faquih, a student of Master in

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Management Studies (MMS), bearing Roll No. 83, from Rizvi Institute of ManagementStudies and Research, specializing in Marketing has successfully completed the projecttitled, Usage and Attitude of Consumer towards Pharmaceutical Over TheCounter OTC Product under the guidance ofDr. Kalim Khan, Director, RizviInstitue of Management Studies and Research in partial fulfillment of the requirement

of Master in Management Studies (MMS), by Rizvi Institute of Management Studies andResearch , for the academic year 2009-11. ______________________

Prof. (Dr.) Kalim Khan Project Guide__________________________Prof. Umar Farooq Dr. KalimKhan Academic

Coordinator Directorffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c4500010100000c484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346540000000049454320735247420000000000000000000000000000f6d6000100000000d32d485020200000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000116370727400000150000000

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Executive Summary The research was started with the objective to Study theconsumer behaviour towards the Pharmaceutical OTC product in the city of Mumbai.The research was carried out with the view to analyze the usage and attitude ofconsumers like Doctors, Chemist, and Customers etc. with respect to the age, maritalstatus, occupation, nature of family, size of family factors, etc. to identify the decisionmaker and the influencer for the purchase of OTC medicine made by consumers. Astructured undisguised questionnaire was administered for a sample size of 120 whichincluded Doctors, Chemists and Customers from distinct geographical areas of theMumbai city. With the help of the data collected the results were analyzed, tabulated, andinterpreted. The inferences were drawn out with the help of statistical analytical tools.From the findings few recommendable suggestions had been opined for the marketersand manufacturers to recognize that OTC market is a lucrative consumer segment

especially with the high competition in market, as lots of patents are expiring in nearfuture. It is important for companies to make better strategy and create awarenessamongst the consumers so, that they can judge on their own which OTC medicine needsto buy to treat minor ailments so, it would be easy to switch prescription drug to OTCdrug which would help the companies to overcome the generic competition and create anhealthy portfolio of OTC product in future, which would reap high growth potentials.The Indian OTC pharmaceuticals market generated total revenues of $2.5 billion in 2010.The market has grown significantly over the last five years at a CAGR of 8.6%. In

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2.3. INDUSTRY

TRENDS ...........................................................................................................................192.4. KEYCHALLENGES ...................................................................................................................

........... 212.5. MAJOR PLAYERS IN THEMARKET .................................................................................................... 242.6.CONCLUSION .................................................................................................................................... 26CHAPTER NO 3: INDIAN PHARMACEUTICAL INDUSTRY

.......................................... 283.1.

HISTORY ........................................................................................................................................... 303.1.1. The Policy Regime since1970s ................................................................................................. 303.1.2. Post-Liberalisation .....................................................................................................................333.2. INDUSTRYSTRUCTURE .....................................................................................................................353.3. INDUSTRYSEGMENTATION .............................................................................................................363.3.1. BulkDrugs .................................................................................................................................373.3.2.Formulations ............................................................................................................................. 393.3.3. Contract Research andManufacturing ..................................................................................... 403.4. CRITICAL SUCCESSFACTORS ............................................................................................................ 413.4.1. New ProductDevelopment ....................................................................................................... 42

3.4.2. TherapeuticCoverage ............................................................................................................... 433.4.3.Exports ...................................................................................................................................... 453.4.4. Low Cost Production throughScale .......................................................................................... 463.5. PHARMACEUTICAL REGULATORY BODIES IN

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INDIA ......................................................................... 473.5.1. National Pharmaceutical Pricing Authority(NPPA) .................................................................. 473.5.2. Central Drugs Standard and Control Organization(CDSCO) ..................................................... 47

3.5.3. Department of Chemicals & Petrochemicals(DCP) .................................................................. 48CHAPTER NO 4: COMPETITIVE ANALYSIS OF PHARMACEUTICAL

INDUSTRY 494.1. PORTERS 5 FORCE ANALYSIS OF

INDUSTRY ..................................................................................... 494.2. PESTANALYSIS ................................................................................................................................. 54

4.3. SWOTANALYSIS ............................................................................................................................... 59CHAPTER NO 5: PHARMACEUTICAL OTC MARKET

................................................... 665.1. LABELING

REQUIREMENTS ...............................................................................................................675.2. ADVERTISINGREQUIREMENTS ........................................................................................................ 675.3. PRESCRIPTION TO OTCSWITCH ....................................................................................................... 685.4. WORLD SCENARIO OF OTCMARKET ................................................................................................ 705.4.1. US OTC PharmaceuticalsMarket .............................................................................................. 715.4.2. European OTC PharmaceuticalsMarket ................................................................................... 735.5. INDIAN SCENARIO OF OTCMARKET ................................................................................................ 745.6. MAJOR PLAYERS OF OTC PHARMACEUTICAL MARKET ININDIA ..................................................... 795.6.1. Proctor &Gamble ..................................................................................................................... 79

5.6.2. Dr. MorepenLimited ................................................................................................................. 815.6.3. GlaxoSmithKline ConsumerLimited .......................................................................................... 825.6.4. ZydusCadila ..............................................................................................................................835.6.5.

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Novartis ..................................................................................................................................... 865.6.6. Paras Pharmaceuticals PrivateLimited ..................................................................................... 87CHAPTER NO 6: CONSUMER BUYING BEHAVIOUR

..................................................... 916.1. OTC CONSUMER

MARKET ................................................................................................................ 926.1.1. Buyers of OTCProduct .............................................................................................................. 926.1.2. The Market to Buy Different Kinds of OTCMedicine ................................................................ 926.1.3. Buying Process (PurchasePurposes) ........................................................................................ 936.1.4. Time toBuy ............................................................................................................................... 946.1.5. Place toBuy ............................................................................................................................... 946.2. OTC BUYER BEHAVIORFACTORS ..................................................................................................... 956.2.1. CulturalFactors ......................................................................................................................... 956.2.2. SocialFactors ............................................................................................................................ 956.2.3. PersonalFactors ........................................................................................................................ 966.3. OTC CONSUMER DECISION-MAKING ............................................................................................... 976.3.1. Buy the Roleof .......................................................................................................................... 976.3.2. BuyingBehavior ........................................................................................................................ 976.4. OTC PURCHASEPROCESS ................................................................................................................. 986.4.1. Awareness of theIssue ............................................................................................................. 98

6.4.2. InformationGathering .............................................................................................................. 986.4.3. The Evaluation of OTCDrugs .................................................................................................... 996.4.4. Purchase Decision-Making ...................................................................................................... 1006.4.5. Post-ShoppingBehavior .......................................................................................................... 101CHAPTER NO 7: RESEARCH METHODOLOGY

............................................................ 103

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7.1. NEED FOR

PROJECT ........................................................................................................................1037.2. RESEARCHOBJECTIVE ....................................................................................................................

1057.3. LIMITATION OF THESTUDY ............................................................................................................ 1067.5. RESEARCHDESIGN .........................................................................................................................1067.6. SOURCE OFDATA ...........................................................................................................................1077.7. SAMPLINGPROCEDURE .................................................................................................................1077.8. SAMPLINGTECHNIQUE ..................................................................................................................107CHAPTER NO 8: DATA ANALYSIS AND INTERPRETATION

..................................... 1088.1 RESPONDENT

PROFILE .................................................................................................................... 1088.2. DESCRIPTIVEANALYSIS .................................................................................................................. 1138.3. DATA INTERPRETATION OR ADVANCEANALYSIS .......................................................................... 1428.3.1. CrossTab .................................................................................................................................1428.3.2. AdvancedAnalysis ................................................................................................................... 271CHAPTER 9: SUGGESTION AND RECOMMENDATION

.............................................. 2969.1. SUMMARY OF

ANALYSIS ................................................................................................................ 2969.2.RECOMMENDATION ......................................................................................................

................ 305CONCLUSION ..................................................................................................................

....... 308

QUESTIONNARIE............................................................................................................

....... 311

LIST OF FIGURE

.................................................................................................................... 319

LIST OF TABLE

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100000c484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346540000000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001163707274000001500000003364657363000001840000006c77747074000001f000000014626b707400000204000000

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616373704d5346540000000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001163707274000001500000003364657363000001840000006c77747074000001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00000240000000

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 Fig.1.1: Branches of Medical Science Ancient civilization allowed India to developvarious kinds of medical and pharmaceutical systems. In addition to the allopathicsystem, which is prevalent in the United States, Japan and Europe, the following types of

medical and pharmaceutical systems are used by the Indian people Medical ScienceSiddha

Unani

Allopathy

Ayurvedic

Naturopathy

Homeopathy

1.Allopathy: It is known as the modern medicine and world over the pharmaceuticalindustry is focused upon it.2.Ayurveda: Ayurveda translates as the science of life. It encompasses fundamentalsand philosophies about the world and life, diseases and medicines. The knowledge ofAyurveda is compiled in Charak Samhita and Sushruta Samhita. The curative treatmentlies in drugs, diet and general mode of life.3.Siddha: The Siddha system is one of the oldest Indian systems of medicine. Siddhameans achievement. Siddhas were saintly figures who achieved healing through thepractice of yoga. The Siddha system does not look merely at a disease but takes intoaccount a patients age, sex, race, habits, environment, diet , physiological constitutionand so forth. Siddha medicines have been effective in curing some diseases, and furtherwork is needed to truly understand why this system works.4.Unani: The Unani system originated in Greece and progressed to India during themedieval period. It involves promotion of positive health and prevention of disease. Thesystem is based on the humoral theory i.e. the presence of blood, phlegm, yellow bile andAllopathy Ayurveda Siddha Unani Homeopathy Naturopathy black bile. A personstemperament is accordingly expressed as sanguine, phlegmatic, choleric or melancholic.

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Drugs derived from plant, metal, mineral and animal origins are used in this system.5.Homeopathy: Homoeopathy is a branch of therapeutics that treats the patient on theprinciple of SIMILIA SIMILIBUS CURENTUR which simply means Let likes becured by likes. Homeopathy seeks to stimulate the body's defense mechanisms andprocesses so as to prevent or treat illness. Treatment involves giving very small doses of

substances called remedies that, according to homeopathy, would produce the same orsimilar symptoms of illness in healthy people if they were given in larger doses.Treatment in homeopathy is individualized (tailored to each person). Homeopathicpractitioners select remedies according to a total picture of the patient, including not onlysymptoms but lifestyle, emotional and mental states, and other factors.6.Yoga and Naturopathy: Yoga and Naturopathy are ways of life. In naturopathy oneapplies simple laws of nature. It advocates proper attention to eating and living habits. Italsoinvolves hydrotherapy, mud packs, baths, massage and so forth. Yoga consists of eightcomponents: restraint, observance of austerity, physical postures, breathing exercises,restraining of the sense organs, contemplation, meditation and Samadhi. Increasing

interest exists in revisiting these ancient drug systems

1.2. MANUFACTURING PROCESS

Step by step manufacturing process has been described on subsequent page. Bulk drugsare prepared by appropriate reactions of natural/synthetic intermediate raw material undercontrolled conditions.Right dosage of the bulk drug (active ingredient) is mixed with filler substances(passive ingredient), to make the formulation accepTab. This is done in a batch process.Formulations are packed according to their physical form - blister strips forTablet/Capsules, bottles for liquids or ampoules for powders. Each pack must have price,

expiry date, storage conditions and dosage. Stringent quality control is must at each stageas per the requirement of concern authority. The following figure shows the flow chartfor manufacturing process.

INTERMEDIATE RAW MATERIAL (Plant derivatives/ Animal derivatives/ SyntheticChemical)

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080c625452430000043c0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d322e31000000000000000000000012735247422049454336313936362d322e31000000000000000000000000000000000000000000000000000000

BULK DRUGS ACTIVE INGREDIENT (Raw medicines cant be used for medicinalpurpose)

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 SUBSTANCE PASSIVE INGREDIENT (To make bulk drugs)

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 (Packed with proper instruction regarding price, expiry date, storagecondition and dosage)

ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c4500010100000c484c696e6f021000006d6e74725247422058595a2007ce0002000900060031000

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0616373704d5346540000000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001163707274000001500000003364657363000001840000006c77747074000001f000000014626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a0000024000000

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

Fig.1.2: Manufacturing Process

PATIENTS (Either directly or under prescription of the doctors)

In basic form, pharmaceutical are called bulk drugs. They are derived from intermediateraw material, namelyPlant derivativesAnimal derivativesSynthetic chemicalsBulk drugs in their raw form cannot be used as medicine and they have to be converted

in to form in which human can use them as medicine. This type of final dosage form isknown as formulations. Formulations can be classified into two types namely,Ethical products: These types of formulations are available only under medicalprescription to prevent misuse. Doctors, to cure a disease in the patient primarilyprescribe ethical formulations. Generally, for ethical products direct advertisements tousers are prohibited.Over The Counter: These types of formulation known as OTC can be purchased byusers directly, for example pain balms, health tonics etc. For OTC product, directadvertisements to user can be used to promote product under certain conditions.

Formulations can be categorized as per the route of administration to patients, namely,Oral: They are taken internally by patients, for example Tab.ts, syrup, capsules,powdersTopical: They are applied on skin, for example creams, ointments, liquids, aerosol etc.

Parenterals: They are injected in an intravenous and intramuscularly fashion.Others: It includes eye drops, surgical dressings etc.

1.3. RESEARCH & DEVELOPMENT

Pharmaceutical industry is driven by a need to conquer disease. New diseases emerge ashumans find the solution to cure old diseases. New medicines are developed to treat new

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diseases or existing medicine are reformulated to improve upon the treatment of existingdiseases. That is why R&D of drugs is a key to success in the pharmaceutical industry.Four kind of research are conducted in the pharmaceutical industry namely, 1.3.1.Fundamental or Basic Research This involves discovering new molecules fromscratch. No Indian company does Basic Research, simply because it is very expensive.

Indian drug companies do not make the kind of profit required for this kind of research.In the West, hi-tech equipments screen, can compound a cost up to $3 billion. 1.3.2.Process Research or Reverse Engineering This involves a copy of existing moleculeby manufacturing it with different process. Indian patent law, at present, covers processpatents, not product patents. Indian companies are very effective and efficient in reverseengineering. However, a new patent law will obviously, not permit reverse engineering.1.3.3. Analogue or Discovery Research Companies modify an existing molecule (or anew one that has not yet commercialized), after accessing international patent databases,to arrive at a new molecule. Some of the bigger Indian companies like Dr. Reddy,Ranbaxy, Cadila, and Torrent etc. are conducting discovery research or plan to do so.1.3.4. Genetic Research It aims at establishing the link between genes and diseases and

one day determine the best drugs for individuals based on their makeup. World leaders ofthe pharmaceutical industry have started devoting resources to this type of research calledGenomic. No Indian company does this kind of research, but several government oracademic institutions like National Institute of Immunology, New Delhi and Center forMicrobiology, Hyderabad have begun work in this area.1.4. PATENTS - A PROJECTION

Discovery of a new drug or modifications on existing drug requires intensive R&Defforts and companies have to spent huge amount on R&D to find new drugs or modifyexisting one. If a protection is not provided to innovator of drugs no one would prefer tospend on R&D and it will hinder to growth of pharmaceutical industry and of humanbeing. To protect the interest of an innovators patent is provided to ensure commercialgains on their R&D investment. Patents are avital aspect for the global pharmaceutical industry. Two kind of patent protection isgranted to the innovators by different countries, namely 1.4.1. Product Patent Itprovides an exclusive manufacturing and licensing rights of product, to innovator of thatproduct for a stipulated time period. So, if company A discovers drug Z then no othermanufacture can produce drug Z without consent of company A. At present only thedeveloped nations endorse product patent. 1.4.2. Process Patent It provides anexclusive manufacturing and licensing rights of process to manufacture a product, toinnovator of that product for a stipulated time period. So, if company A discovers drug Zby process P then no other manufacture can produce drug Z by process P without consentof company A. But other manufactures can produce drug Z by any other process then P.Most under developed nations endorse process patent. Patent is granted for stipulatedtime period. Once this time period gets over a drug becomes off patent or generic and anyone can manufacture that drug. Based on this criterion drugs can be classified as:Under patentGeneric or off patent

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1.5. THERAPEUTIC MARKET SEGMENTATION

Commencing with repackaging and preparation of formulations from imported bulkdrugs, the Indian industry has moved on to become a net foreign exchange earner, andhas been able to underline its presence in the global pharmaceutical arena as one of thetop 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 hasmore drug-manufacturing facilities that have been approved by the U.S. Food and DrugAdministration than any country other than the US. Indian generics companies supply84% of the AIDS drugs that Doctors without Borders uses to treat 60,000 patients inmore than 30 countries. However total pharmaceutical market is as follows: The industryhas enormous growth potential. Factors listed below determine the rising demand forpharmaceuticals.The growing population of over of a billionIncreasing incomeDemand for quality healthcare serviceChanging lifestyle has led to change in disease patterns, and increased demand for newmedicines to combat lifestyle related diseases

More than 85 per cent of the formulations produced in the country are sold in thedomestic market. India is largely self-sufficient in case of formulations. Some life saving,new generation under-patent formulations continue to be imported, especially by MNCs,which then marketthem in India. Overall, the size of the domestic formulations market is around Rs160billion and it is growing at 10 per cent per annum. Market Share of DifferentPharmaceutical Product Categories

Fig.1.3: Market Share of Different Pharmaceutical Product Categories Demand fordrugs for treatment of lifestyle-related diseases such as diabetes, cardiovascular diseases,and central nervous system are on the increase. There are around 700,000 new cases ofcancer each year and total of around 2.5 million cases. It is estimated that there arearound 40 million people in India with diabetes and the number is rising, 5.1 millionHIV/AIDS patients, and 14 million tuberculosis cases. According to industry reports,while the Indian pharmaceutical industry witnessed a growth of 7 percent, the cardio-vascular segment recorded 15 to 17 percent growth and anti-diabetes segment of over 10-12 percent growth.Category Value Rs in (bn) Value Market

Share (%)Value Growth(%)

Volume Growth(%)

Anti Infective 32.8 16.4 4 11

Gastrointestinal 21.8 10.9 8 9

Cardiac 20.7 10.3 18 15

Respiratory 20.4 10.2 9 6

Vitamin/Mineral/Nutrien

19.3 9.6 5 5

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century in the Upper Rhine Valley near Basel, Switzerland when dyestuffs were found tohave antiseptic properties. A host of modern pharmaceutical companies all started out asRhine based family dyestuff and chemical companies e.g. Hoffman-La Roche, Sandoz,Ciba-Geigy (the product of a merger between Ciba and Geigy), and Novartis etc. Mostare still going strong today. Over time many of these chemical companies moved into the

production of pharmaceuticals and other synthetic chemicals and they gradually evolvedinto global players. The introduction and success of penicillin in the early forties and therelative success of other innovative drugs, institutionalised research and development(R&D) efforts in the industry. The industry expanded rapidly in the sixties, benefitingfrom new discoveries and a lax regulatory environment. During this period healthcarespending boomed as global economies prospered. The industry witnessed majordevelopments in the seventies with the introduction of tighter regulatory controls,especially with the introduction of regulations governing the manufacture of generics.The new regulations revoked permanent patents and established fixed periods on patentprotection for branded products, a result of which the market for branded genericsemerged.

2.1.1. Branded Companies Branded companies are the innovative companies that carryout the Research and Development (R&D) of new drugs (or contract this process).Initially, their products are protected by patents. The clinical test data, used for theapproval of the drugs, is usually protected as well. 2.1.2. Generic Companies Genericcompanies produce drugs that they have not developed themselves. Normally these drugsare not protected by patents anymore. However, many branded companies have divisionsor subsidiaries that produce generics as well. With regard to the products of thesecompanies, three categories of drugs are commonly distinguished.Prescription Drugs These have to be prescribed or administered by healthcareprofessionals.Over The Counter (OTC) Drugs also called self-medication drugs. These can bepurchased without a prescription.Vaccines These are usually regarded as a separate category next to pharmaceuticals.In contrast to pharmaceuticals, vaccines are not based on chemical compounds but on livebacteria and viruses. The production process of vaccines is therefore quite different andfar more complicated.

Indias traditions in the science of health and heating go back to the halcyon days ofSusruta, Vaghatta and Charska. Our systems of medicine like Ayurveda were wellestablished and schools and hospitals with treatises and instructions manual were in wideuse.The establishment of a modern pharmaceutical industry in India may be and to havecommenced with the setting up of Bengal Chemicals by Acharya P.C. Ray in Calcuttaand of Alembic Chemicals in Baroda, by B.D. Amin. Significant who helped theindigenous drug industry was the establishment of the Haffkine Institute in Bombay, theKing Institute in Madras in 1904 and the Pasteur Institute in Coonoor in 1907. 2.1.3.Post Independence Development In the post-independence years, several internationalpharmaceutical companies have set up manufacturing facilities in the country. Publicsector units like HAL and IDPL were also set up. The diversified character of theindustry's growth is reflected in the range and variety of products manufactured. These

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cover a wide therapeutic spectrum ranging from antibiotics to vitamins. 2.2. GLOBALSCENARIO

The global pharmaceutical market can be classified into two categories: regulated andunregulated/semi regulated. The regulated markets are governed by governmentregulations like intellectual property protection, including product patent recognition. As

a result, they have greater stability in both volumes and prices like the United States. Theunregulated/semi regulated markets have lower entry barriers in terms of regulatoryrequirements and hence, they are highly competitive. The global pharmaceuticalcompanies till 2010 will be closely regulated by emerging issues like patent safety, sideeffects, adverse action reporting, strengthening harmonization and regulations andstronger clinical evidence. Global pharmaceutical market hasincreased its focus on novel drugs, good delivery system, and new chemical entities. Theother factor which is driving the growth of global pharmaceutical market is speeding upregulation in bio-generic segment. Moreover there will be shift in growth from top tenmarkets to emerging economies. The global pharmaceutical market will change its shapefrom primary care driven to specialty care driven that is oncology and biotech. The

global pharmaceutical industry will take a shape of virtually integrated pharmaceuticalcompany. There is a widening gap between mature market performance and emergingmarket performance, which will require many pharmaceutical companies all over theglobe to make changes throughout their operations from shifting their sales and market,revising their strategies, changing their business models to fuel their growth. For theglobal pharmaceutical industry, It will be a year of softening growth and a widening gapin performance between the increasingly generalized and cost-constrained maturemarkets, as well as the burgeoning pharmerging sectors where demand is growing andeconomies and access to healthcare are expanding at record levels. Marking an importantinflection point for the industry, for the first time the worlds seven key markets (US,Japan, UK, Germany, France, Spain and Italy) will drive less than half of the industrysgrowth in 2011, while the pharmerging markets will contribute nearly a quarter of growthworldwide . Further divergence will be apparent between primary care driven andspecialist-driven therapy areas, and between therapy classes with major unmet needs andinnovations, and those dominated by generics.Market Market Size (US$ in

billions)Market Growth

USA. 295-305 4-5%

Europe 135-145 4-5%

Pharmerging 85-90 12-13%

Japan 64-68 1-2%

Rest of world 125-135 7-8%

Tab. No.2.1: Market Share and Market Growth of Global MarketPharmergingmarket include: China, India, Brazil, Russia, Mexico, Turkey and South Korea

2.3. INDUSTRY TRENDS

2.3.1. Structural Changes

The pharmaceutical industry is currently undergoing a period of very significanttransformation. The majority of Big Pharma companies are generating high returns

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which provide them with excess cash for further rapid growth whether organic, orthrough mergers and acquisitions. In pharmaceutical industry size of the company on itsown is a significant advantage. Besides economies of scale in manufacturing, clinicaltrials and marketing, bigger companies can get a competitive advantage by allowinginvestments in more research and development (R&D) projects which in turn diversify

their future drugs portfolio and make them much more sTab. in the long term. As theresult, top companies in the industry were active participants of mergers and acquisitions(M&A). Another form of structural change in the industry was establishing of newstrategic alliances and joint ventures. So far as the research and development process foreach drug take many years and requires significant investments, and the outcome of theseinvestments of time and financial resources remains unclear until the final approval of thedrug, BigPharma companies are constantly looking for synergies that they can get fromcooperationwith their competitors. For example, cooperation of Sanofi-Aventis and Bristol-MyersSquibb resulted in production of Plavix, which is currently one of the top-selling productsfor each of these companies. Yet another trend is selling off low-profitability or non-core

businesses. BigPharma companies in order to maintain strong sales growth and meetprofitability expectations of their shareholders actively engage in these activities. Forexample, in 2003 Merck sold its low-profitability Medico Health Solutions that helped toincrease its profitability margin. Massive sales of non-pharmaceutical businesses byTakeda also were compatible with its strategy to concentrate its financial resources on itscore pharmaceutical business. 2.3.2. Major Factors of Future Growth Thepharmaceutical industry showed high sales growth rates in the recent past, and a numberof factors suggest that this trend will continue in the future. Some of these factors are:1.According to various studies, a significant portion of elderly population in the UnitedStates and other countries does not receive proper treatment. For example, only about onethird of the U.S. population who requires medical therapy for high cholesterol is actuallyreceiving adequate treatment. As it is expected, the Medicare Prescription DrugImprovement and Modernization Act starting from the beginning of 2006 will increaseaccess of senior citizens to the prescription drug coverage, thus increasing pharmaceuticalsales.2.Although developing countries at the moment have a small portion of worldpharmaceutical sales, these countries also have a significant potential for thepharmaceutical industry in the future. Fast growing economies in Asia, South Americaand Central & Eastern Europe suggest an increasing solvency of population and makethese markets more and moreattractive for Big Pharma companies. Further reforms of legislation systems in thecountries of these regions, especially regarding patent protection issues, will inevitablyresult in growing pharmaceutical sales.

2.4. KEY CHALLENGES

The main challenges for drug companies come from four areas. First, they must dealwith competition from within and without. Second, they must manage within a world ofprice controls that dictate a wide range of prices from place to place. Third, companiesmust be constantly on guard for patent violations and seek legal protection in new and

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growing global markets. Finally, they must manage their product pipelines so that patentexpirations do not leave them withoutprotection for their investment. 2.4.1.Competition

The pharmaceutical industry currently represents a highly competitive environment. Onecan distinguish three layers of competition for Big Pharma companies. First, obviously,

Big Pharma companies compete among themselves. Although not all leadingpharmaceutical companies cover all segments of pharmaceutical market, almost all ofthem are active in R&D and production of drugs in the segments with the highestpotential such as treatment of infectious, cardiovascular, psychiatric or oncologydiseases. Secondly, Big Pharma companies experience significant profit losses due tocompetition from the generic drug manufacturers. Opposite to the research-orientedpharmaceutical companies, which invest significant financialresources and time to develop new medicines, generic drug manufacturers spendminimum resources on R&D, and start manufacturing already developed by othercompanies drugs after their patent expiration. Because generic drug manufacturers do nothave to recoup high R&D costs, prices of their products are usually much lower than

those of major pharmaceutical companies; as the result, after patent expiration, genericdrugs manufacturers capture significant market share, dramatically decreasing revenuesof the Big Pharma companies. Finally, the whole pharmaceutical industry competeswith other health care industries. In this case, pharmaceutical companies should not onlydemonstrate high efficiency of their products, but also provide obvious proof of costadvantages in comparison with other forms of care. 2.4.2. Price ControlPharmaceutical companies have to operate in a highly regulated environment; the degreeof regulation to a significant extent depends on the country and type of the product. Oneof the most important aspects of government regulation for pharmaceutical companies isprice regulation, and different countries have different policies on this issue. In theUnited States the largest and the most attractive pharmaceutical market currently thereis no direct price control for non-government drug sales. At the same time, it is expectedthat MedicarePrescription Drug Improvement and Modernization Act will potentially increasedownward price pressure. The majority of European countries control drug prices, andthis downward pressure on prices has been increasing during last year. Japan has evenstricter price controls than European countries; all prices are controlled by thegovernment, and they are subject to a periodic pricereview. As the result of price control, prices of the same products can significantly differin different countries. 2.4.3. Protection of Patents Generic drugs manufacturersrepresent a significant threat to research-based pharmaceutical companies. For example,Schering-Ploughs Claritin patent expired in 2002; as the result of generic drugcompetition, sales of Claritin by Schering-Plough declined from $3.2 billion in 2001 to$1.8 billion in 2002 and