1

OVERVIEW OF PHARMA INDUSTRY

“The Indian pharmaceutical industry is a success story providing employment for millions and

ensuring that essential drugs at affordable prices are available to the vast population of this sub-

continent.”

Richard Gerster.

The Indian pharmaceutical sector has come a long way, being almost non-existent before 1970 to a

prominent provider of healthcare products, meeting almost 95 per cent of the country's pharmaceuticals

needs.

The Industry today is in the front rank of India’s science-based industries with wide ranging

capabilities in the complex field of drug manufacture and technology. It ranks very high in the third

world, in terms of technology, quality and range of medicines manufactured. From simple headache

pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is

now made indigenously.

Playing a key role in promoting and sustaining development in the vital field of medicines, Indian

Pharma Industry boasts of quality producers and many units approved by regulatory authorities in USA

and UK. International companies associated with this sector have stimulated, assisted and spearheaded

this dynamic development in the past 53 years and helped to put India on the pharmaceutical map of

the world.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units with

severe price competition and government price control. It has expanded drastically in the last two

decades.

There are about 250 large units that control 70 per cent of the market with market leader holding nearly

7 per cent of the market share and about 8000 Small Scale Units together which form the core of the

pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce the

complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and

about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of

pharmaceutical formulations.

Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs

and pharmaceutical products has been done away with. Manufacturers are free to produce any drug

duly approved by the Drug Control Authority. Technologically strong and totally self-reliant, the

pharmaceutical industry in India has low costs of production, low R&D costs, innovative scientific

manpower, strength of national laboratories and an increasing balance of trade.

Corporate Catalyst India India’s Pharmaceutical Industry The total Indian production constitutes about

13 per cent of the world market in value terms and, 8 per cent in volume terms.

The per capita consumption of drugs in India, stands at US$3, is amongst the lowest in the world, as

compared to Japan- US$412, Germany- US$222 and USA- US$191.

2

Indian Pharmaceutical Market – US$ 7.3 billion Opportunity

India is among the fastest growing pharmaceutical markets in the world. The domestic pharmaceutical

market recorded sales of US$ 11.6 billion in 2009 with a growth of 19.5 per cent over the previous

year. Of this, retail sales were US$ 7.5 billion, while institutional sales were estimated to be around

US$ 2.2 billion.

The Indian pharmaceutical industry was estimated to be around US$ 13.2 billion in 2010-11. Of this,

domestic consumption of pharmaceuticals accounted for nearly 57 per cent while the rest 43 per cent

was constituted by exports. The domestic market has grown at a composite CAGR of 9.5 per cent over

the past five years.

However, in 2009, the market witnessed an accelerated growth of more than 17 per cent, primarily on

account of increased clarity on tax reforms especially the Value Added Tax (VAT) implementation. In

the long run, the market is expected to maintain a healthy growth rate of 12-13 per cent. It is expected

to cross US$ 10 billion mark by 2010 and would reach US$ 12 to 13 billion approximately, by 2012.

8.7

9.4

10.1

10.8

11.6

0 2 4 6 8 10 12 14

2005

2006

2007

2008

2009

US$ billion

Domestic Pharma Retail Market

3

Formulation exports would lead the way

With US$ 5.2 billion of estimated revenues in 2005-06, exports have become the mainstay of the

Indian pharmaceutical industry. Presently, the share of bulk drugs exceeds that of formulations in the

total pharmaceutical exports.

Formulation exports were estimated at around US$ 2.4 billion in 2005-06 and constitute 46 per cent of

the total exports revenue pie while, the rest 54 per cent is constituted by bulk drugs, estimated at US$

2.8 billion in the same period. Overall pharmaceutical exports are estimated to increase at a CAGR of

30-32 per cent and reach US$ 18.3 billion in 2010-11.

Moving at a healthy CAGR of 30-35 per cent, formulation exports are estimated to reach US$ 9.6

billion by 2010-11 and would surpass bulk drugs which are estimated to reach US$ 8.7 billion at a

CAGR of 25 per cent in the same period.

The predictions made by Indian Pharmaceutical Alliance (IPA) are more bullish and estimate that the

total export market would generate US$ 27 billion by 2012.

Break-up of Sales-Indian Pharma Industry

48%

43%

9%

Sales

Domestic Retail Market

Exports

Institutional Sales

4

Forecasted Export Revenues

7.8

9.6

7.2

8.7

0 5 10 15 20

2008-2009

2010-2011

US$ billion

Forecasted Export Revenues

Formulations

Bulk Drugs

5

Current Status

India's US$ 9.4 billion pharmaceutical industry is growing at the rate of 14 percent per year. It is one

of the largest and most advanced among the developing countries. The Indian pharmaceutical industry

can reach a market size of US$ 11.6 billion by 2009

A beginning has been made with the signing of General Agreement on Tariffs and Trade in January

2005 with which India began recognizing global patents. Soon after, the Indian pharmacy market

became a sought after destination for foreign players. Foreign direct investment into the country’s

pharmacy industry touched US$ 172 million during 2005-06 having grown at a CAGR of 62.6 per cent

during the period beginning 2002-06.

The sector recorded strong growth in the second quarter ended September 2006, driven by launch of

new generic drugs with 180 days exclusivity period in the US market. The top ten pharmacy

companies reported an impressive 57 per cent growth in consolidated net profit at US$ 314.3 million,

as against US$ 200.7 million in the same quarter of the previous year, while consolidated net sales

were up 51 per cent at US$ 1.7 billion.

Company Profit( per cent)

Ranbaxy Labs 162.7

Dr Reddy’s Labs 65.8

Cipla 5.2

Nicholas Piramal 47.39

Sun Pharma 35.6

Lupin 66.4

Cadila Healthcare 66.4

Torrent Pharma 313.7

Glenmark 74.6

Biocon 26.1

6

India tops in number of USFDA approved plants outside the US

Most of the capex has been in USFDA-approved plants in anticipation of the large wave of patent

expiries in 2006. There has also been a surge in the number of plants receiving USFDA approval in

India.

There are 75 U.S. FDA-approved manufacturing facilities in India, more than in any other country

outside the U.S, and in 2009, almost 20 per cent of all Abbreviated New Drug Applications (ANDA) to

the FDA were filed by Indian companies.

75

55

27 2510 8

0

10

20

30

40

50

60

70

80

India Italy China Spain Taiwan Israel

India has the most US FDA-approved mfg. sites outside the US

7

Market Classification on basis of Market Category

Sales comparison of Indian and MNC pharmaceuticals in India.

Year MNC sales Indian Company’s sales

1980-1985 75% 25%

1990-2000 60% 40%

2009 30% 70%

indian pharmaceutical

industry

Domestic

Ethical- Allopathic medicines

Ayurvedic Homeopathy Disinfectants

Export

8

Classification of Firms on Bases of Revenue.

Doctors in India

List of Different Types of Doctors

Psychiatrist - Deals with mental health

Podiatrist - Foot doctor

Optometrist - Eye doctor

Dentist - Tooth doctor

Urologist - Deals with bladder

Obstetrician - Deals with pregnancy and birth

Pediatrician - Child doctor

Oncologist - Cancer doctor

Neurologist - Deals with the problems of Brain and nerves

Cardiologist - Heart doctor

Nephrologists - Kidney doctor

Rheumatologist - Deals with treatment of arthritis and other diseases of the joints, muscle

and bones

Dermatologist - Deals with skin problems

Endocrinologist - Deals with the problems of thyroid and ductless glands

Gastrologist - Deals with digestive system problems

Indian Pharmaceticals

Large

500 cr./year

Medium

100-500cr./yearAverage

20-100cr./year

Small

1.5cr./year

9

Types of Marketing

A. Ethical Marketing:-

Ethical marketing refers to the application of marketing ethics into the marketing process. Briefly,

marketing ethics refers to the philosophical examination, from a moral standpoint, of particular

marketing issues that are matters of moral judgment. Ethical marketing generally results in a more

socially responsible and culturally sensitive business community

Eg. Marketing through Medical Repetitive

Prescription written by Doctor

B. Generic Marketing OR Replacement of Branding:-

This type of Marketing refers to selling drugs on their original name i.e. chemical name. Many

firm toady have entered this kind of marketing due to high competition in market. It also has

cost benefits on it and some times it may be 50% cheaper than branded medicine.

i.e. a ) Desprin – brand name

Aspirin - AIP

B) Mrtacine –brand name

Paracetamol – AIP

C. Propaganda Marketing:-

In such kind of marketing Medical Repetitive will directly sell medicines to registered

physicians and that physician will give it to their patients.

It is also called and Propaganda cum marketing or Prescription cum marketing.

Eg. Doctors will buy medicine and sell it to patient, family medical store.

D. Surgical goods selling:-

This type of selling refers to selling of Surgical Items like I.V. set, catheters, infections etc.

E. Tender Business:-

A tender refers to getting the contract of selling Drugs in places like hospitals.

F. OTC:-

Drugs which are purchased by consumers without any prescription.

10

Data collecting Institutes:-

1. ORG – IMS

Operational research group and International management group.

It is words largest data gathering company and it collects a data of sales in Pharma industry.

In India it has a branch in Baroda.

Function:-

a) Monthly survey on selling of each brand of every company

b) Survey of stockiest and distributers

c) Preparation of full database on the bases of information taken from stockiest and

distributers.

MAT (moving Annual Toatal)

It refers to collecting data month wise, company wise, brand wise, area wise, value, and unit

sales.

SSA:- Secondary Stockiest Audit

Stockiest Secondary Audit is an audit which tracks the stockiest sales to the retailer i.e. secondary

sales.

It has a panel of more than 4,500 stockiest who cater to more than 50,000 retailers all across the

country. The data is projected to give the sales figures of more than 400+ companies all India. It has a

validation of more than 85% as proven through various validation exercises with our clients.

It helps to identify potential therapeutic categories, monitoring performance of specific brands in

relation to competing brands, segmenting the market by 4 zones, 18 states, 30 metros and all town

classes

Month wise/ Company wise/ Brand wise/ Area wise/ Value/ Unit sales.

Category wise/ Growth wise/ Purchase %/ Re-purchase %

11

C MARC ( center for management analysis and research consultancy)

C MARC takes research as a creative process for providing dependable Research based Healthcare

Management Consultancy Service to the Industry for optimizing Return on Investment (RoI) on a

continuum taking care of both Physical and Perceptual domains for Strategic Corporate and Marketing

Specific Action Drive in the light of Short, Medium, Long term Perspective of the Strategic Business

Unit (SBU) in Healthcare/Pharma Industry in India.

Every 2 months it will make a survey on the written prescription and it has a network of over a 50.000

doctors for survey.

Analysis of C MARC

/ Bimonthly/ No. of prescription/ Written by which Specialist/ Diseases/

With co-prescription/ Perceived Diagnosis/ Perceived Sure

12

13

Pharmaceutical Distribution channel:-

14

15

Drug & Pharmaceutical Co.

Managing Director

Production Marketing Sales Finance

Executive Executive Executive Executive

State Level State Level State Level State level

1.Division 2.Division 3.Division 4.Division

Area manager Area manager

Sale Sale

Supervisor Supervisor

MR MR MR MR MR MR

16

Pharma Sales and Marketing Team:-

Sales Team

VP Sales

General Manager (GM)

National Sales Manager (NSM)

Zonal Sales Manager (ZSM)

North/ South /West/ Easr

Regional Sales Manager (RSM)

Area Sales Manager (ASM)

Medical Sales Representative (MR)

5-6 MR for each ASM

5 ASM for each RSM

17

V.P. Marketing

AGM/DGM/GM

Group Product Manager

(Under take 8-10 Brands)

Product manager (PM)

Assistant Product Manager

Product Exicutive

(1 to 2 Brand manager)

management Trainee

Product Management Team

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Surgical Sales Channel

Division in Sales team.

All most all the Pharma Company has division in their sales and marketing team like,

1. Pharma division – in such types of division firm has no particular therapeutic division. Such

division is for the brand which is very popular in the market and needs very less promotion for

that. They are also less expensive and appear and Cash-Cow in BCG matrix.

2. Special division – division according to therapeutic segments.

a. Gastro division

b. Cardio division / Diabito ivision

c. Psycho / Neuro division

d. Ortho division

e. Opthal division

f. Dermatology division

g. Oncology division

h. Pulmonary division

Company

Consignee Agent – Mostly 1 at each state

Super Stockiest - Around 4 to 5 in each sate

Stockiest – 10 to 15 in each State

Sub-Stockiest

21 Days Credit on PDC

Credit policy depends on:

- Credit period

- Credit limit

- Mode of payment

- Stockiest profile

- Post dated cheque

19

Policy Makers in Pharma Industry Or Regulatory frame work.

Old Drugs: - Drugs which are older those 4 years are approved by State DC for

manufacture.

New Drugs: - Drugs which are newer than 4 years are approved by DCGI for

manufacture.

Regulator y Framework

The Indian pharmaceutical industry has a multi-level hierarchical regulatory institutional

framework. Two ministries of the Government of India play a major role in regulating the

pharmaceutical sector in the country. Each of these ministries deals with different aspects of

regulations and works independently. These are:

1. Ministry of Health & Family Welfare (MoHFW)

2. Ministry of Chemicals and Fertilizers (MoC&F)

DCIG – Delhi Drug Controller General of

India

State DC (Drug Controller)

FDA (Food and Drug Administrator) – per

state one

DI- Drug Inspector

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Responsibility

21

DPCO

The Drugs Price Control Order (DPCO), 1995 is an order issued by the Government of India

under Section 3 of the Essential Commodities Act, 1955 to regulate the prices of drugs.

The Order inter alia provides the list of price controlled drugs, procedures for fixation of prices

of drugs, method of implementation of prices fixed by Government and penalties for

contravention of provisions among other things.

For the purpose of implementing provisions of DPCO, powers of the Government have been

vested in the National Pharmaceutical Pricing Authority (NPPA). Drugs are essential for health

of the society. Drugs have been declared as essential and accordingly put under the Essential

Commodities Act. Only 74 out of 500 commonly used bulk drugs are kept under statutory price

control.

All formulations containing these bulk drugs either in a single or combination form fall under the

price control category. However, the prices of other drugs can be regulated, if warranted in

public interest.

Definitions given by DPCO

• "capital employed" means net fixed assets plus working capital of a manufacturer in relation to

manufacture of bulk drugs;

• "ceiling price" means a price fixed by the Government for Scheduled formulations in

accordance with the provisions of paragraph 9;

• "dealer" means a person on the business of purchase or sale of drugs, whether as a wholesaler

or retailer and whether or not in conjunction with any other business and includes his agent;

• "distributor" means a distributor of drugs or his agent or a stockiest appointed by a

manufacturer or an importer for stocking his drugs for sale to a dealer;

• "drug" Includes –

• all medicines for internal or external use of human beings or animals and all substances

intended to be used for, or in the diagnosis treatment, mitigation, or prevention of any disease or

disorder in human beings or animals, including preparations applied on human body for the

purpose of repelling insects like mosquitoes;

• such substances, intended to affect the structure or any function of the human or animal

body or intended to be used for the destruction of vermin or insects which cause disease in

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human beings or animals, as may be specified from time to time by the Government by

notification in the official Gazette; and

• Bulk drugs and formulations;

DPCO Formula: -

Calculation of retail price of formulation:

The retail price of a formulation shall be calculated by the Government in accordance with the

following formula namely:

Where,

"R.P." means retail price;

"M.C." means material cost and includes the cost of drugs and other pharmaceutical aids

used including overages, if any, plus process loss thereon specified as a norm from time

to time by notification in the Official Gazette in this behalf;

"C.C." means conversion cost worked out in accordance with established procedures of costing

and shall be fixed as a norm every year by notification in the Official Gazette in this behalf;

g of concerned formulation,

including process loss, and shall be fixed as a norm every year by, notification in the Official

Gazette in this behalf;

costing and shall be fixed as a norm every year by notification in the Official Gazette in this

behalf;

MAPE" (Maximum Allowable Post-manufacturing Expenses) means all costs incurred by a

manufacturer from the stage of ex-factory cost to retailing and includes trade margin and margin

for the manufacturer and it shall not exceed one hundred per cent for indigenously manufactured

Scheduled formulations;

E.D." means excise duty:

R.P. = (M.C. + C.C. + P.M. + P.C.) x (1 + MAPE/100) + ED.

23

Provided that in the case of an imported formulation, the landed cost shall form the basis for

fixing its price along with such margin to cover selling and distribution expenses including

interest and importer's profit which shall not exceed fifty percent of the landed cost.

BULK DRUGS

1. SULPHAMETHOXAZOLE 2. PENICILLINS

3. TETRACYCLINE 4. RIFAMPICIN

5. STREPTOMYCIN 6. RANITIDINE

7. VITAMIN C 8. BETAMETHASONE

9. METRONIDAZOLE 10. CHLOROQUINE

11. INSULIN 12. ERYTHROMYCIN

Life saving Drugs / commonly used Drugs: -

- Drugs which are used for treatment of Acute life saving condition.

- List of some life saving drugs.

1. 6-Isoguanine 2. Aclarubicin

3. Dactinomycin 4. Agglutinating Sera

5. Allopurinol 6. Ambenonium Chloride

7. Diazoxide 8. Dobutamine

9. Dispyramide Phospate 10. Edrophonium

11. Dopamine 12. Zalcitabine

13. Saquinavir 14. Zidovudine

15. Ritonavir 16. Amifostine

24

Pricing in Pharma-Industry:-

Company / Manufacturing unit

Stockiest

Retailers

Consumer

On base of PTD- Price to distributors OR

NRV- Net realization value

PTR: – PTD + 10% Margin

MRP: - PTD + 10% Margin + 20% Margin

25

Satutory cost

(net Profit)

Gross Profit

Cost of product

PTD PTR MRP

MRP structure

- Market cost

- Production cost

- R & D cost

- Manpower cost

- Distribution

cost

If Gross profit is more

of equal to 50% (≥ 50%)

then and then

management will go for

production

On base of

PTD- Price to

distributors OR

NRV- Net

realization value

PTR: –

PTD + 10% Margin

MRP: - PTD + 10%

Margin + 20% Margin

26

Changing paradigm

The pharmaceutical industry has been witnessing a transformation in the recent past. Earlier, the

industry followed a product centric approach, with manufacturing aimed towards fulfilling the

domestic demand, while exports were largely confined to supplying APIs & intermediates to the

less regulated markets. Further, the contribution of services has been miniscule in the total

revenues of the pharmaceutical industry.

Presently, services account for only 10 percent of the total revenues of the Indian pharmaceutical

industry. However, it is estimated to increase up to 12 per cent by 2011 due to continuous spurt

in clinical research outsourcing, coupled with increase in discovery and preclinical research

activities. The contribution of exports to the total product revenues in 2009 was 68 percent.

However, moving at a high CAGR of 4 percent, contribution of export revenues would surpass

the share of the domestic market in the total revenue mix. By 2011, exports would contribute 62

percent to the total product revenues.

Further, unlocking of US$ 80 billion revenues patent expiry during 2008 – 2009 would present

significant opportunities for generic players, especially the Indian companies who would be

among the first to capitalize on this opportunity.

Industry

2009

Service 10% Product 90%

Domestic 32% Export 58%

Industry

2011

Service 12% Product 88%

Domestic 38% Export 62%

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Segmentation in Pharma industry

Segmentation in pharmaceutical industry is mainly base on given four categoty,

1. Geographical segmentation

2. Disease wise segmentation

3. Population wise segmentation

4. Therapy wise segmentation

For one, the company operates in niche formulations (chronic) segments such as psychiatry,

cardiovascular, gastroentology and neurology. While most of the top Indian companies have

focused on antibiotics and anti– infective (acute).

Sun Pharma focused on therapeutic areas such as depression, hypertension and cancer. The

company has introduced the entire range of products and has gained leadership position in each

of these areas. Being a specialty company insulates Sun Pharma from the industry growth.

If we look to pharmaceutical market many firm have focused on particular market i.e. Niche

market segment. They have only 15 to 20 employees in whole marketing channel.

On other hand many firm practice mass marketing strategy so they have more than 500

employees in particular segment or in division.

28

Brand Plan in Pharma marketing

Following are the basic requirements in Brand plan.

1. Objective

a. Quantitative

b. Qualitative

2. SWOT Analysis to find our internal strength and weakness and available market

opportunities and threats. Strength and Weakness gives firms internal analysis and

Opportunity and Threat gives External analysis

3. Current status and Future demand

Whether the drug is under the Phase 1, 2 or 3, what could be a new market available, new

formulation of drug of new dosage form and many other criteria?

4. Prospects

Who are the current customers and what are the requirements of prospective customers?

5. Major players.

Competitors in the market and their brands, price of other brand in market.

6. National opportunity snapshot

ORG IMS data related to particular brand.

7. Division and Nomenclature.

Under which division our drug is coming and what could be the name of our brand which

must be differentiated then other brand available in market.

8. Team Nomenclature.

Deciding the name of marketing team like “Cip-Blaster”, Roxyans” and “Beta-Max”.

9. Manpower development.

Required number of people in the sales team and hierarchical level in sales force.

10. Zone wise head quarter details.

11. Area coverage under regional manager.

29

12. Reporting pattern.

13. Promotional tool.

14. Salary structure.

15. Target on the bases of productivity and marketing strategy.

16. Phase wise brand Budget.

17. New brand Budget.

18. Pricing.

What should be the price of the product so we are able to achieve our target profit to

recover cost? It should be convenient for buying also.

19. Sales promotional plan.

20. Marketing Strategy.

a. Pre launch activity

b. Actual launch activity

21. Final marketing budget.

30

Meeting Arrangement - marketing team.

Brief meeting is conducted every 2 to 3 months.

Working pattern of Medical representative.

- Per day 12 calls for MR.

- 25 working per month.

- 5 visit to chemist shop per day.

- At least Rs. 1000 to Rs. 200 POB (Personal order booking)

- Last two days of the month are allocated closing sales and reporting to superior.

- MR also go to the stockiest and C & F for final sales data collection.

Meeting Details.

- Meeting of the MR, ASM, ZSM and RSM will be held every 3 month i.e. 4 times in a

year.

- In such meeting entire state team is going present.

- Mainly conducted at Regional head quarter.

- Meeting will be 2 to 3 days.

Many times conflict situation occurs in the meeting and some tricks are used to handle

such situation.

By asking call average, chemist average, POB, product mix, new product sales, growth to

MR.

Day – 1

- Discussion about the current product and its

status in market.

- Discussion about new product launch.

Day – 2

- Half of the day – sales review.

- Other half – sales panning.

31

Reporting System in Pharma Marketing.

MR

ASM

RSM

ZSM

SM

Report on daily

call average and

expense of the

month

Monthly report

on sales under

the area he

covers

Sales report

includes the sales

data of whole

region which

covers 5-6 ASM Sales report of

whole state Prepare a sales

report on bases

of the reports

submitted by

ZSM and submit

it to Marketing

department

32

Sales and admin department at Head-quarter.

- Completion of all sales report.

A. Zone wise – 3 to 4 people do this job.

B. Summary report –

a. Incentive calculation

b. All India / Sate wise / Unit wise / Value wise / over all sales report

c. Calculation of sales of the entire brand indivisibly and comparing sales with

previous year sales data.

d. Preparing the report on utilization of the budget provide to each division.

e. DWP – Daily Work Plan per year.

Daily Work Plan

Sl. No. Day Dr. name Business expected

monthly

Product to be

promoted

33

Department in Pharma Industry

1. Marketing department – has two main functions.

a. Sales budget.

b. Marketing budget – which includes expenses of,

i. Gifts

ii. Samples

iii. Sponsorship

iv. Scheme

v. Bonanza

vi. CME – continuing medical education

vii. Advertisement

viii. Printing expenses

ix. Meeting expenses

x. Incentives

xi. Transportations

xii. Expire and goods return

2. Finance department – prepares a financial budget of the firm.

3. Production department – production budget and plan

4. Sales and admin department

5. Purchase department – engaged with purchase raw material and other required tools.

34

Billing.

Billing cycle.

E.g. Suppose bill is generated for out side of Ahmedabad say Delhi.

1st may bill is made according to the order of

fC & F and goods are disposed

8th may C & F receives goods

On 11th of 12th

stockiest will receice goods

7 to 8 days end customer

payment period

21 days PDC is given by

C & F

35

Bill formant.

Sl.no. Particular Description Quantity Unit

value

Total

quantity

Total

value

Trade union in India.

Many Pharmaceutical union in India are established which has their own norm and rules for

working. They have member which includes medical representative, area sales manager, and

other marketing people.

E.g. Chandigarh medical representative associates

.

36

Contract manufacturing.

1. Loan license manufacturing

2. Third party manufacturing

1. Loan license manufacturing

There is two side of Loan License in Pharmaceutical Trade:

1. Where you have a Manufacturing Facility ( Factory ) which conforms to GMP & adapted

to Quality Standards & wish to produce goods for others company who wish to get there

product outside ( kind of outsourcing ).

2. Where you have ready market for a product but you don’t have factory, so you get it

manufactured at somebody else's factory

Both these are called loan license in Pharmaceuticals.

Plus sometime you can get excise benefit if you get the things manufactured outside as that

factory may be located in Excise free zone or enjoying various other benefits, so you get it

manufactured at somebody else's factory

2. Third party manufacturing.

Many firms enters to the agreement of third party agreement due to many reason like reduce

over burden, fast production or opening manufacturing unit in other location of country.

Here agreement is base on that manufacturer have to finished order within given period and

according to the quality and quantity required by order received.

37

Patent

A patent is a set of exclusive rights granted by a national government to an inventor or their

assignee for a limited period of time in exchange for a public disclosure of an invention.

The procedure for granting patents, the requirements placed on the patentee, and the extent of the

exclusive rights vary widely between countries according to national laws and international

agreements. Typically, however, a patent application must include one or more claims defining

the invention which must be new, non-obvious, and useful or industrially applicable. In many

countries, certain subject areas are excluded from patents, such as business methods and mental

acts. The exclusive right granted to a patentee in most countries is the right to prevent others

from making, using, selling, or distributing the patented invention without permission.