The Indian Pharmaceutical Industry at approximately US $ 26 Bln, is ranked 3rd globally in terms of volume and thirteenth in terms of value. It accounts for around 10 % of the world’s production of pharmaceuticals by volume . The industry is growing at an annual growth rate of around 10 % in 2013
It is a highly fragmented industry comprising of a mix of sophisticated patented technologically advanced products , branded generics and commodity generics with the presence of more than 10,500 registered manufacturers as per the National Pharmaceutical Pricing Authority [NPPA] .It is undergoing various changes in the macro-environment , regulatory environment & the competition . Each of these interrelate with each other and in turn result into challenges for marketing.
Challenges to Pharmaceutical Marketing in India:
i] Macro-environment challenges
These are mainly posed by demographic factors such as the patient population , age, gender, education levels, shifts in patient population , income levels and disease patterns.Technological advancements viz. proliferation of social media & mobile computing also have an impact upon pharmaceutical marketing.
ii] Challenges posed by the Legal/Regulatory Environment
These are the challenges which arise due to the various policy decisions taken by the government. The recent ones include the new pharmaceutical pricing policy, the DPCO 2013 ,the National List of Essential Medicines [NLEM], Compulsory Licensing , Approval of new drugs through clinical trial approvals etc.
iii] Challenges due to competition
Around 90 % of the Indian market comprises of branded generics. Thus competition poses major challenges for pharmaceutical marketing in India. As mentioned earlier , there are more than 10500 SMEs and about 300 manufacturing organizations. These produce over 64000 formulations covering almost every therapeutic segment. The extent of competition can be gauged by the fact that there are almost 10 to 150 brands of a molecule with similar composition .
Challenges inherent to the organization
These challenges are a characteristic of an organization attributed mainly to the various functional aspects. The nature of the specific challenges would depend upon the nature of the organization . eg. the nature of the marketing challenges for a SME would differ as compared to those for a MNC.
Taking a holistic perspective some of the marketing challenges that encompass majority of the pharmaceutical companies in India are mentioned herein:
a] Value creation
With plethora of competitive brands around, it becomes extremely difficult and complex for a physician [the customer] to zero-in on a particular brand in his/her practice, especially when there are brands with almost similar names, compositions , packaging and prices .In such a scenario, the brand which promises a value for the customer as well as the consumer would be the winner.
Preferably the value in pharmaceutical marketing has to be created with respect to the drug being marketed [pharmacoeconomics which compares the therapeutic value of one pharmaceutical drug or drug therapy to another] and value for the brand which is being marketed . The latter assumes a lot of significance especially when the brand has a high potential of OTC purchase by the patients . Also it is of prime importance that the “Value for me proposition “ needs to be perceived by the customer[the doctor] as well as the consumer [the patient].
b] Brand building
The approach to pharmaceutical marketing has to be practiced in a manner that looks into a top-line increase through the process of building a brand .This should be a systematized & structured format which aims at looking at the product from a “brand” perspective to build the brand and not only pursue routine administrative marketing activities which have a possibility of not achieving the desired focus.
c] A strategy for the brand
Pharmaceutical marketing comprisesof two components :
i] The science & the medicine component
ii] The business component
It is absolutely essential to have a strategy in place for both these components. Here strategy implies a deliberate communication process to create a perceived differentiation for the brand .
In this highly crowded branded generic market place , differentiation is a strategy not only for growth but also survival in the market-place. In pharmaceutical marketing, differentiation can be utilized or applied as a “start-up” strategy for a brand /SBU and then applied to all the marketing parameters .
Pricing has been mentioned here as a separate challenge considering its prime importance as a strategic tool . Pricing is more a strategy decision that should supplement brand purchase as well as provide the required bottom line for the brand /therapeutic category . Sometimes both these could move into opposite directions and taking a pricing decision itself can turn out into a major challenge considering the market conditions and internal objectives of the company .
These are some of the challenges faced by pharma marketers mentioned in brief. We would discuss each of these in detail along with the probable strategies to tackle these in the future .