How to take distributorship of Generic Medicines?

Query:


I am a pharmacist. I start wholesale of generic pharmaceutical products. so give information about 
(1) for generic wholesale to take agency is require? 
(2) if yes ,how to take agency? 
(3) if not how to purchase goods for wholesale?

Response:

There is not any specific or special requirements for generic medicine agency. You just need wholesale drug license to start wholesaling of medicines, no matter whether medicines are generic, branded or OTC.

For generic medicines wholesaling, you need to get distributorship or stockist ship of any generic company, in other words, we can say it agency. Or you can start by taking generic medicines from any other stockist but that will increase cost of products and will decrease your margin.

For taking stockist ship, you need to contact pharma companies those sell generic medicines. 

Contact them. 
Hope above information was useful to you…
For any query and suggestion, mail us at pharmafranchiseehelp@gmail.com

Type of Distributor and Wholesaler In Pharmaceutical Sector. How They work?

Query:
I want to start medicine wholesale distribution in my location.
I m working in sales and market in 15 year but in industrial sales.
could you map me how to start market for medicine.
and want kind of medicine side good for sale. ( cardic/diabetics /general etc)
I m very thankful to you. 

Response:


For opening wholesale distribution firm requirements and procedure you can read in our article- Documents required and procedure to start wholesale stockist pharma firm? Few requirements may vary state to state.

Sir, you didn’t disclose in which sector, you have 15 years of industrial sales experience. If you have industrial sales experience in pharmaceutical sector, then you can start your entrepreneur journey from industrial sales. Or if you are from any other sector, you may also search for business opportunities there.

First we want to explain you how whole selling works in pharmaceutical sector:
As we have discussed in our previous articles about marketing types in pharmaceutical sector.
Pharmaceutical wholesale distribution can also be divided in many types:

  • Ethical/Branded Pharma products distributors
  • Generic pharma products distributors
  • Pcd/franchise pharma products distributors
  • OTC/Institutional supply pharma distributors
Ethical/Branded Pharma products distributors: These distributors works at a fixed percentage. Companies appoint distributors or whole sales who distributes their products to retailers or chemists. For marketing and sales company appoint directly their medical representatives or sales representatives. Company representatives convince doctors to prescribe their products. As demand of products create, chemist/pharmacy/retailer give order to company representative/MR. MR forward this order to stockist or distributor and distributor supply to chemist. Most of companies set a specific period of time for clearing payment or work at advance payment. Payment collection from chemist is responsibility of both – MR and Distributors.

Generic pharma products distributors: Generic products are similar products as of branded but there cost is very much less as compare to ethical/branded products. Efficacy, result, appearance, dosage form etc all are same. Only difference these products doesn’t have any marketing/promotional expenses. In generic distribution, stockist has to approach directly to chemist/retailers to get orders. Some companies also appoint their sale representative but wholesaler direct approach and his good will make strong impact at sale. In generic marketing, there is not fixed margin, you can manipulate according to purchaser. Generally 45-70 days credit is provided by generic companies. Payment collection from chemist may be responsibility of both – sales representative and Distributor or may be of distributor alone.

Pcd/Franchise pharma products Distributors: Pcd pharma franchise is term used for appointing distributors cum marketing/promotional partner. Companies don’t involve itself into direct marketing and appoint distributors who also do marketing and promotion of company along with distributorship and wholesaling. These distributors could sale their products as generics or branded/ethical. Appointing sales or medical representative is fully responsibility of distributor. All marketing, sales and promotional expenses have to bear by distributors. Companies don’t interfere in distributors area and doesn’t involve or participate in any activity. Companies know only one person in that territory and that is its distributor. Payment term and conditions is vary company to company but most of times its advance in starting and is on credit of 30-45 days after few dealing. Payment collection from chemists/retailers is purely responsibility of distributor.

Read related- How to become pcd pharma franchise distributors?

OTC (Over the counter) or Institutional supply pharma distributors: OTC wholesaler/distributors mainly deals in over the counter products only. Over the counter (OTC) products in pharmaceutical market is the products which can be sell out with out any prescription of medical practitioner. These are the products that doesn’t come under schedule H and narcotic drugs. Institutional suppliers are the distributors who supply to government hospitals, private hospitals, nursing home or other medical institutions. They supply directly to these institutions without involvement of any third party. Payment term vary according to companies. Same in case of payment collection.

Above we described types of pharmaceutical distributors. You can choose which type of distribution you want to start. One of your question is what kind of medicine side is good for sale. For this we don’t see any difference in choosing a category. Every section has same challenges and same procedure of marketing, and every section is correlated to each other. Every section products has its own demand. You just need to research which products are moving in market in which section. you can start with general range along with running products of other sections..

How to start Pharma distributionship/Stockistship?

  • Choose what type of distribution ship you want
  • Search for company
  • Ask for distribution ship
  • Finalized term and conditions
  • Prepare list of all doctors and chemists in your location
  • Research about moving products in pharma market
  • Start marketing/Promotion

read complete about how to start pcd marketing?

Hope above information is useful to you.

For any suggestion and query, mail us at pharmafranchiseehelp@gmail.com

What are Over the counter Products? How to start OTC (Over the counter) related products distribution?

What are the OTC products in pharmaceutical industry:

OTC products ( also known as over the counter products) which can be sell out without prescription by pharmacies or chemist. These products doesn’t come under schedule”H” drugs. Most commonly otc products are protein powders, multivitamins, pain gels, fungal infection creams etc. These products also includes cosmetic, food supplements and Ayurvedic/Herbal products.

At present anyone can get anyone medicine from chemist but this practice is not ethical. All schedule ” H” drugs can’t be sell out without prescription of registered medical practitioner. Only medicines out side schedule H can be sell as OTC products.

Query related to Otc products:
Query 1: How to start OTC products distribution in own brand?
Query 2: Which type of products could be promoted as OTC in pharmaceutical market?

Query 1-A:
I am looking to start OTC (Over the counter) related products distribution in our brand. Please info me. how should I start?

Response:
Please find the steps for starting your otc products company:

Step 1: Choose Company Name
Step 2: Choose molecules list and their brand names of products you want to launch in otc.
Step 3: Apply for drug license number and TIN number
Step 4: Apply for Trade mark registration of Company Name and Brand Names( Optional – Skip in starting)
Step 5: Private Limited Company registration (Only applicable If two or more than two partners is starting company)
Step 6: Third party manufacturing of your products

Above details is of documentations and licenses. Other than these, you may require to set-up your office and staff

After that you can start distribution and marketing of your brands. OTC products ( Over the counter products) are the products which don’t require medical practitioner’s prescription to sell medicinal products to the customers by chemist or pharmacies in pharmaceutical market. Your main customers are patients or person who are in need of that products. Chemist and pharmacies also play important role in otc marketing. They play important role in changing customer’s mind set and some time they substitute other brand with your brand. Your relationship and links will also provide you support during your distribution. Start otc distribution from your known chemists first.

OTC marketing is expensive and time consuming process. It requires advertising and promotion with good customer care support and good back up by sale team. If you don’t have much money for ad and promotion, you can start with door to door marketing till you start to earn enough for advertisement and promotion.Here Door to door marketing means chemist/pharmacies to chemist/pharmacies marketing. Chemist Chemist will give to customer and if customer will get good result, it will get back to chemist with same packing or brand name. This is the first sign of otc when customer start to ask for your brand. Customer demand create otc branding.

If you have good amount of money, you can invest it for advertisement and promotion of your products. Start with small advertisement budget and increase it as it produces results. You should have proper home work and plan for otc distribution. If you don’t have then there is minimal chances of success. You have to be patience during this process because it is time consuming process. It takes time to capture market in otc segment. You can start with single product or launch few products but in starting start with minimum products in otc section.

Query 1-B:

Thanks for your valuable information . We have tin, cst & drug licence .We are looking start with two products .
In allopathic:
Aceclofenac + Paracetamol tab
Diclofenac gel
In ayurveda – We looking pain relief gel and cough syp
From where we can manufacture. How can we get minimum quantity.

Response:

Any Pharma Third party manufacturing company can provide you these two pharma products. They are very common products and We think, these will be available to every manufacturer. For aceclofanac + paracetamole, you don’t have to invest more but for diclofenac gel, you have to invest in lami tube. Most of lamitube manufacturer make not less than 10000 tube at single time. Packing material investment will be high for gel segment. Packing material detail you can read here

In Ayurvedic Products, cough syrup will have less investment and pain relief gel will also follow the same lami tube procedure. We have own ayurvedic third party manufacturing plant and can arrange for Ayurvedic Third party manufacturing of your Products.

Pharma Third Party manufacturing service we provide but we don’t have own pharma manufacturing facility. We facilitate products manufacturing from other manufacturers.

Query 2-A:
First of all thanks for making such page for help in pharma.
I am running a pharma PCD company.
I want to know that is there any special govt. Permission required to advertising my OTC combinations.
I have pain relief gel, cough syrup in my product list.
Can I display their posters at medical stores and other places.

Response:
Thanks for your appreciation too. Your appreciation is our motivation.

For advertisement of otc products, you don’t need any prior permission from Government but your product doesn’t fall in Schedule “H” Category. You can’t advertise products bearing Schedule “H” warning. These products can’t be sell out without prescription of registered medical practitioner.

Pain relief gel is not Schedule H product. You can promote it without any prior government approval but in case of Cough, you will have to check composition of your cough syrup. If it contains molecule or molecules which comes under schedule H, you can’t advertise it. You can advertise cough syrup having non schedule H molecules like Torex and Benadryl etc.

Other than above, in case of video advertisement, you have to seek A-certification from authority look after advertisement and commercial advertisement in India. For advertisement at new paper and book, you not need any prior approval. For products other than schedule H drugs and medicines, you can display postures at medical stores and other places.

Query 2-B:
Thanks for your valuable support.
One little more advice required is that, please go thru the attached artwork of my pain relief gel.
However schedule H is not written on the same but warning is there.
Please advice is any amendment is required in the same or not for running as OTC,

Response:

You can sell it as OTC products.
You could amend two line:
You can amend: Direction of Use and Warning: Not for veterinary use
At OTC product, one should write minimum of matter . Mention only which is must. Highlight only that part of product to which customer want to see. Other parts should not be highlighted.

Hope above information was useful to you…

For any query and suggestion, you can mail us at pharmafranchiseehelp@gmail.com

How to Start Pharmacy Business (Chemist/Pharmacy/Retail)?

In this article, we will cover following topic about Pharmacy Business:

  • Definition of Pharmacy
  • Difference between Pharmacy and Chemist Shop
  • Area required and premises specifications
  • Competent Person (Pharmacist)
  • Documents and Requirements
  • How to Start/ Procedure to start
  • Investment Required
  • Inspection
  • Profit Margin
  • FSSAI Registration
  • Shop Registration

Pharmacy and Chemist shops are last part of distribution channel and are in direct contact with customers i.e. patient and/or his caretaker. Pharmacy and Chemist shops are a profitable as well as a charitable business. In this article we will provide you almost complete information about how you can start pharmacy and retail business.

For staring a pharmacy or chemist shop business, a person requires Retail Drug License Number which is issued by Drug Control Department and has to employ services of a registered pharmacist.  Along with prescription drugs, pharmacy and chemist shops also deal in food and dietary supplements, Ayurvedic Preparations, Cosmetic products and OTC products. Online Pharmacy concept are also becoming popular in pharmaceutical sector.

Pharmacy:

Pharmacy can be defined as a store or shop or place where drugs and medicines are dispensed, compounded, prepared under supervision of a registered Pharmacist against prescription of a Registered Medical Practitioner.

Difference between Pharmacy and Chemist Shop:

Most of us feel confusion when it comes to differentiate between Pharmacy and Chemist Shop. Both are similar in many aspects. But still have lot of difference in regards with operation and functioning. Both require presence and supervision of Pharmacist during working hours.

Pharmacy is a premises where compounding, preparation of drugs and medicines as per patient requirement is conducted along with dispensing of pre packed drugs and medicines dosage form where as chemist shop is a premises where only dispensing of pre packed drugs and medicines dosage form is conducted.

Read Related Article: How to start wholesale Distribution Business in Pharmaceutical Sector?

Area Required and Premises Specification:

Minimum of area required for starting Chemist Shop and Pharmacy is 100 square feet.  Premises should have adequate space for refrigerator, racks, pallets, sitting etc. Walls and floor should be at least cemented and concreted roof. No crack and flake should be present in premises.

Competent Person (Registered Pharmacist):

For handling daily activity in pharmacy and chemist shop, supervision of Pharmacist is must. No activities can be carried out in retail pharmacy and chemist shop without presence and supervision of a Registered Pharmacist.

A Registered Pharmacist is a person who holds a diploma, degree or doctorate in Pharmacy and his/her name is entered in the register of the state pharmacy council in which he/she is for the time being residing or carrying on his profession or business of pharmacy.

Documents and Requirements:

Application has to be submitted in prescribed form to district drug inspector or drug selling authority office. Application is submitted on application form with detailed information

  • Application Form
  • Pharmacist registration certificate photo copy. If proprietor or one of partner is not registered pharmacist, appointment letter and affidavit of pharmacist will be submitted along with registration certificate copy of pharmacist
  • Academic qualification certificates of pharmacist
  • Date of birth proofs
  • Prescribed fees
  • Ownership proof or in case rented premises, rent agreement with owner detail.
  • Purchase bill receipt photocopy of refrigerator
  • Partnership deed in case of partnership firm
  • Affidavit of proprietor or partners
  • Address proof
  • Blue print/layout plan of premises in 3 copies

How to Start/ Procedure:

Most important thing to consider before starting retail for medicines is Location. Your income from chemist shop and pharmacy depends at which location your premise is present. How much doctors are present at that location, population, already existing numbers of chemist shops are few factors that should be consider before proceeding opening a pharmacy and chemist shop. Along with location your premises should fulfill minimum requirements like area require, cemented floor and walls, concrete roof etc. Second important thing is fulfilling requirement of a Pharmacist. If you are pharmacist then you don’t need any other person but if you don’t have Pharmacist Registration then you have to employee a Pharmacist as competent person to carry out Pharmacy/Chemist/Druggist Daily Activity. In short we are describing business plan for chemist shop below:

  • Search for Premises with required space at Prime Location.
  • Conduct some research and survey about general medicines, prescription habits of doctors and otc products running in that locality
  • Find out distributors and suppliers of medicines and other products in that locality
  • Make a rent agreement of premises if premise is rented
  • Apply for shop registration if necessary
  • Appoint a pharmacist if applicable
  • Decorate premises as per medical shop standard
  • Get prepared a blue print of premises
  • Purchase an air conditioner and refrigerator
  • Complete all documents
  • Visit to nearby Drug Control Office
  • Submit application for retail license for sale, purchase and exhibition of medicines manually and/or online.
  • After application successful submission, drug inspector or any other authorized person by government will inspect premise and check manually about authenticity of documents and premise
  • If Drug Authority is satisfied with all formalities. Application will be approved and drug authority will issue letter for grant of drug retail.

Drug authority will issue drug license number after being satisfy with documents and premises. With this drug license number, sale and purchase of medicines and drugs and related products & services can be carried out at retail basis.

Initial Investment Required:

Total initial investment will vary according to location, area, city etc. There is requirement of shop or premises to start Pharmacy outlet or chemist shop. This shop or premises could be owned or rented. In owned shop, we can add purchase cost in investment if pharmacy is to start after purchasing shop. But starting by purchasing own premises or shop is not possible for majority of start-ups. For them renting a premises or shop is best option.

Rent and/or cost of premises can change with change of location.  So add what is your own shop or premises rent. Suppose rent is 6000/- per month. Pharmacist salary also varies place to place. We are supposing it 12000/- for fresher candidate.

Now come to accessories investment. Decoration and interior expenses vary according to your need. Simple interior will cost less and high profile interior will cost high. Furniture, fitting and chair etc will cost approximate 30000/-. Refrigerator cost is approximate 9000/-. License fee and documentation may be cost approximately 6000/-. Few other hidden expenses may cost approximately 15000/-.

Above expenses are without purchasing any single medicines. These estimates could be change depend at many factors. This investment idea is for information purpose only; you can change actual value from approximate values to find actual investment you require to start.

Investment at purchase of medicines also varies according to stock you purchase in starting and cost of medicines you purchase. Most of retailer can get medicines at credit from wholesaler and distributor.

Inspection:

Inspection is carried out by Senior Drug Inspector/Drug Inspector or any other person appointed by state government time to time for inspecting pharmacies and chemist shops. If all facilities, documents, competent person detail and other particulars are found to be satisfactory then application file ahs to be processed for issuing retail drug license. Otherwise authority can return file for amendments and/or rejection.

Profit Margin in Chemist/Pharmacy/Pharma Retail Shop:

Profit margin of chemist shop varies products to products but generally 16-20% margin is provided to retailers by most of companies with scheme. At generic medicines, this margin increases to higher side. Along with allopathic medicines, A Pharmacy and Chemist Shop also deal in Ayurvedic Medicines and Food/Dietary Supplements.

FSSAI (Food Safety and Standards Authority of India) Registration:

If pharmacy and chemist shop want to sell food and dietary supplements along with medicines and drug. Then it must be registered itself under FSSAI. Read in detail about how to apply for FSSAI Registration?

Shop Registration:

Shop registration requirements and criteria may vary according to your area. Before starting pharmacy business, it should be recommended to confirm first for shop registration or any other registration in locality.

Important Definitions related to Chemist Shop and Pharmacy:

  • Drugstore word is used for such licensees who do not require the services of a qualified person.
  • Chemists and Druggists word is used by such licensees who employ the services of a Registered Pharmacist but who do not maintain a “Pharmacy” for compounding against prescriptions.
  • Pharmacy, Dispensing Chemist word is used by such licensees who employ the services of a Registered Pharmacist and maintain a “Pharmacy” for compounding against prescriptions

Query:
I am planning to open a pharmacy /medical store in a small village of gorakhpur, Uttar pradesh. I am planning to have a doctor in that pharmacy which can recommend medicine.
I am looking for a catchy name for my pharmacy / medical store according to locality which helps as booster for my pharmacy.
Please suggest some names

Response:
You can read how to select catchy name for your company? same will be applicable for your shop.
Choose a technical different name, not common names like —- medicals store,etc. Choose names which give professionalism like:

  • Pharma Hub
  • Pharmacy Corner
  • Pharmacy Point
  • Drug House
  • Dawa Ghar etc.

Hope above information was useful to you…
For any query and suggestion, mail us at pharmafranchiseehelp@gmail.com

 

How to start wholesale, stockiest and Distributor business in Pharmaceutical? Procedure to get stockist/Distributor/c&f license in pharmaceutical sector?

 


You can watch this video to learn how to start pharmaceutical wholesale business and start distribution in Hindi. If you don’t want to watch video, you can continue reading this article.

This article will cover:

  • Area Required
  • Licenses for starting Pharma wholesale and Distributor Business
  • Requirements and Documents
  • How to apply
  • Licensing Authority
  • Investment Required
  • Profit Margin
  • Scope of business
  • Qualification of technical Person
  • Inspection
  • Business plan
  • GST registration
  • Shop Registration
  • FSSAI registration

Every business is conducted through a distribution channel. A Distribution Channel composes of generally with company, carrying and forwarding agent, stockiest, wholesale, distributor, retailer and customer. A distribution chain’s basic motive is to maintain product/service delivery timely and continually to its end user i.e. customer. In Pharmaceutical sector, patient and/or its care taker is end user who will demand for a medicine and drug to pharmacy against prescription of medical representative.

Pharmacy/Chemist/Retail will demand for medicines to its distributor. A distributor will get medicines from its wholesaler/stockiest. Stockiest will purchase medicine from CNF and CNF get stock from Company. In this way a distribution channel works in pharmaceutical sector.

Wholesaler, Stockiest and Distributor is an important part of distribution channel. A wholesaler, stockiest and distributor may be same and/or different at same time. There is no major difference between them. Licenses and documents for becoming wholesale, stockiest and distributor are same. Very minor line separates theses from each other depend at their method of work.

Check difference between wholesaler and Distributor here

How can we define Wholesaler, Stockiest and Distributor?

Pharmaceutical stockiest, distributors and Wholesalers are the dealers or his agents engaged in sale of medicines, drugs, surgical and other pharmaceutical preparations to retailers, hospitals, dispensaries, medical, educational or research institutions or other agencies. These are engaged in the whole sale business of medicines, drugs and related products.

They purchase goods from CNF and/or Companies, and sell it to the pharmacies and chemists. They do business to business type of work. They get particular margin. They require wholesale drug license number to carry out their work. Most of stockiest and distributors also requires GST Registration Number if they have annual turnover more than 20 lac.

Carrying and Forwarding Agents also requires same licenses and procedure to start business. You can read in detail about How to start Carrying and Forwarding Agent (CNF) Business here

Here we are going to discuss in detail about how can you start wholesale and Distributor business in Pharmaceutical Sector. First discuss about requirements to start Pharmaceutical Wholesale and Distributor Business.

Requirements to Start Pharmaceutical Stockiest, Wholesaler and Distributor Business:

  • Premises and Shop (Owned or Rented)
  • Area Required: Minimum of 10 square meters
  • Walls and Floor: Cemented
  • Roof: Concrete
  • Technical Person: Pharmacist or Experienced Person
  • Fridge and/or Air Conditioned if required

Licenses Required:

  • Wholesale Drug License
  • Goods and Service Tax Identification Number if applicable
  • FSSAI Registration (If doing food and dietary supplement distribution also)
  • Shop Registration at local authorities if applicable

Wholesale Drug License:

Licensing Authority for Wholesale Drug Licence Number:

Licensing authority for wholesale drug license is Senior Drug Inspector / Drug Inspector and/or any person appointed by state government for purpose of granting wholesale drug licence. Licensing Authority office is present mostly at district headquarter and/or may be combined for more than one district. You have to submit your application at licensing authority for wholesale drug license

How to Apply

After completion of all documents (discussed below) and requirement, you need to visit licensing authority office for file submission. File submission is online in most of state but in few states you still have submit your file manually only. After online submission, you also need to submit your uploaded documents physically at licensing authority office. Once file submission process is completed, licensing authority will intimate you about premises inspection date and time through mail, phone number, letter and/or manually as applicable.

Inspection:

Inspection is carried out by Senior Drug Inspector and/or Drug inspector or person appointed by state government for granting of wholesale drug license. If all facilities, documents, technical person detail and other particulars find to be satisfactory, your application will be processed for issuing of wholesale drug license. Otherwise drug department reserve the rights to cancel, objection and/or return file for amendment and resubmission.

Documents required for Wholesale Drug License File Submission:

Application is to submit to district drug inspector/drug selling authority office in prescribed form 19 with other information forms.

  • Required area of premises should be minimum of 10 sq. meter (15 sq. meter for wholesale with Pharmacy/Retail), minimum 8’2″ height. Premises should be brick built, plastered floor cemented.
  • Application has to submit in Form no.19 with addition information form
  • Experience person certificate or pharmacist registration certificate or appointment letter of competent person
  • Fees of Rs. 3000/- (For biological & Non Biological )
  • Address proof copy
  • Ownership proof or Rent agreement in case of rented premises
  • Refrigerator purchase bill photocopy with complete address
  • Academic qualification certificate photocopy of EP/Pharmacist
  • Date of birth certificate photocopy
  • Affidavit of EP/Pharmacist
  • Partnership deed for partnership firm
  • Registration firm receipt copy for private registration firm and list of directors with address proof, Memorandum of article of association etc.
  • Affidavit of proprietor/partners/directors
  • Blueprint/layout plan of premises with signature in 3 copies
  • Adequate storage facilities required including cupboards with glass doors, racks, pallets, refrigerator etc.

Qualification and Requirement for Technical Person:

  • Either Registered pharmacistunder state pharmacy council or
  • Minimum one year experience as salesman in registered wholesale drug licensed firm after graduation (With bank salary statement, appointment letter, experienced letter and resignation letter)

Goods and Service Tax Identification Registration:

Goods and Service Tax Identification Number is compulsory for all business whose turnover is above 20 lac annually. Below this figure you can do business without GSTIN. You can approach to Chartered account or sales tax advocates for applying goods and service tax. If you want to applying by your own then you can read complete procedure at our article: What is GSTIN and How to apply for it?

Food Safety and Standards Authority of India (FSSAI) Registration:

Distributing food and dietary supplements along with medicines and drug, you will need to apply for FSSAI registration online. You can read complete procedure for applying for FSSAI registration at our article: How to apply for FSSAI registration?

Shop Registration at Local Authorities:

Different areas have different laws and regulations for shop registration. This process varies according to locality. Some regions may not require to register a shop and some regions may have compulsion to register a shop before starting any business. First you need to confirm at your local authorities i.e. municipality committee, panchyat etc.

Business Plan for Wholesale, Stockiest and Distributor Business:

  • Write a Business Plan
  • Finalize a premises/shop (Rented/Owned).
  • Make a rent agreement (In case of Rented premises)
  • Contact pharmaceutical companies or CNF for Stockiestship, wholesale and/or Distribution
  • Finalize all deals with Pharmaceutical Company or C&F.
  • Apply for wholesale drug license to district drug control office and Goods and Service Tax Registration. (Previously Tin/Vat/CST)
  • Purchase office accessories like Furniture, computer, Freeze etc.
  • Drug Inspector or Concern person will personally inspect premises. If he finds all things good, he will approve your application for issuing license.
  • After some time you will receive your drug licence copy and number
  • Start purchasing, stocking and invoicing drug and medicines to retailers and pharmacies

Scope of Wholesale Drug License:

Investment Required:

  • Fixed Capital Investment
  • Operation Capital Requirement

Fixed Assets:

  • Documentation and License: approximately twenty five to thirty thousand.
  • Furniture: Approximately twenty thousand
  • Refrigerator: 5 to 10 thousand

Liquid Assets:

  • Rent of premises : Vary according to area
  • Medicine and Drugs: Depend at your purchase

Read more about Investment read our article: How much investment require for starting pharmaceutical company? , Refer investment required for stock and product availability under factors Section to calculate medicines and drugs purchase investment.

Profit Margin:

Profit of a wholesale and distributor vary company to company, and marketing/sale types. Ethical/Branded companies gives a particular margin generally 8 to 12 percent. In generic medicines, distributor and wholesaler can earn more profit margin. OTC medicines also have fixed margin vary company to company or product to product. Its difficult to calculate actual profit margin of wholesale drug license firm and distributor.

A standard profit margin of wholesaler is 8 to 12 percent.

Hope above information is helpful to you…

For any query and suggestion, mail us at pharmafranchiseehelp@gmail.com

What is Distribution Channel? How to develop strong delivery, distribution channel and supply network ?

Building a good Distribution Channel is most important aspect of any business. Distribution channel also known as Distribution Chain. All sales effort become zero if company don’t have good distribution channel. Timely availability of products at required place is prime motive of any distribution channel.As we have discussed in previous article about marketing sales types in pharma industry. Now we will discuss about how to establish and build a strong distribution network? Market survey is most important thing before start. It will help in creating strong network.

For building strong distribution channel for pharmaceutical marketing, we need to understand how can we distribute our products in simple and effective way. Try to make it short and simple. Involvement of less persons will be prevent cost of product and time & chances of mistakes will be lesser as compare to bigger distribution channel.

What is Distribution Channel?

A Distribution Channel may be defines as a chain of individuals/groups/firms/companies involved into deliver a product from manufacturing unit to its actual consumer.

Parts of Distribution Channel:

 

Parts of distribution channel are

In prescription marketing, we can also involve doctors in distribution channel, without prescription, its not possible to deliver a medicine to patient but we don’t consider a doctor in distribution channel.

A Distribution channel chart flow is shown into image below.

 

Distribution Channel?

A strong distribution channel plays key role in success of any business. For building strong distribution channel, good knowledge of market at ground level is necessary. A distribution channel is like blood veins. Its must for providing proper supply at exact time at required place. If there is any blockage or restriction in supply, it will affect supply and directly affect sale of organization. Distribution channel should be simple and short to prevent error and mistakes. Parts of distribution channel is mentioned above.

Top most part is Company, then c&f, Stockist, Distributor and retailer. customer. If a customer will need a product, he will approach to a retailer. Retailer should have that product at time of demand. Either retailer will replace it with similar product or mention not available or convince customer for procurement at time period. May be retailer convince customer to make available that product till tomorrow. This commitment will be at the basis of one thing and that is retailer should know the distributor or availability means of product. Here covering and reputation of distributor makes the difference.

Mean while retailer don’t know about the product’s distributor. He will call to his known distributor and will ask about from where he can procure the product. In that condition, distributor should know stockist of that product and will make available product to retailer. Next situation, distributor also don’t know about stockist of product. He will ask from known stockist about this and chain will continue. As we go upper side in distribution channel, it build rectangular shape as show in image below:

Retailers are more in numbers as compare to distributors, Stockists is less than distributors and same is follow-up.
How to Build a Strong Distribution Channel?

Prescription Marketing:

Doctors are the main source of business, so should concentrate at doctors, hospitals and nearby retailers/chemist.
Conduct survey about-

  • Number of Doctors located in territory. Divide them according to their speciality e.g physician, Gynaecology, surgeon, derma etc
  • Number of Hospitals present in area
  • Number of chemists present and chemists present nearby hospitals to whom prescription can reach
  • Number of Distributors & stockists and their supply chain capacity and network

Appoint C&F for a region or particular state.
Then appoint Stockist at particular number of distributors for product’s supply to these distributors. Appoint Distributors at particular number of chemists or hospitals or regions etc.

Generic Marketing:

Retailers/chemists are the main source of business. Other than these, hospitals are also provide good business.

Conduct Survey about-

  • Number of Chemists/retailers/pharmacies present in location
  • Number of Hospitals present in location
  • Number of Distributors & stockists and their supply chain capacity and network

Appoint C&F for a region or particular state.
Then appoint Stockist at particular number of distributors for product’s supply to these distributors. Appoint Distributors at particular number of chemists or hospitals or regions etc.

Pcd Pharma/Pharma Franchise Marketing:

Pcd pharma distributors are the main source of business. For pcd pharma companies, development of strong distribution network, method is different from above two methods. In this marketing type, one need to have high number of queries that are searching for own marketing. Companies has to compete with other companies to finalized the deal with this query. Company having better opportunities gets the deal.
For pcd pharma distributors, they can develop their distribution network further like mentioned in ethical/Branded marketing.

OTC marketing:

In OTC marketing customers are main source of business but chemists and distributors/stockists also play important role. Other than this, Doctor’s recommendation also provide great support.

Conduct survey about:

  • Number of Chemists/retailers/pharmacies present in locations
  • Number of Distributors & stockists and their supply chain capacity and network

Appoint C&F for a region or particular state.
Then appoint Stockist at particular number of distributors for product’s supply to these distributors. Appoint Distributors at particular number of chemists or regions etc.

Surgical And Medical Devices Marketing:

Read below query to understand distribution channel for surgical and medical device marketing.

Query:
Need advice on appointment of distributors for regions/states across India for imported medical device

Response:
You should search for distributors who work mainly work of surgical and medical device products. Pharma Distributors will not help you most. For regions and states you can appoint c&f and for 2 to 3 districts you can appoint one stockist. If possible, district wise you can appoint distributors.
Appointment of stockists and distributors and area you will given to them at sale of products. If sale is huge then you can divide it district wise. If sale is comparatively low then appointing distributor or stockist for 2 to 3 district will be enough.
We will recommend following steps:

Conduct survey about-

  • Number of Hospital who have indoor facility available in area you want to cover (Area may be district/state/region/country)
  • Specialty of Hospitals i.e. Surgeon, Gynae, pediatric etc.
  • Number of Devices used in that hospitals

On Basis of Above Facts, you can choose area, that could be covered by one distributor.
You can read our article : How to develop strong delivery, distribution and supply network ? In This Article we have discussed all marketing types in pharma. It can helpful to you…

Hope above information was useful to you…

For any suggestion and query mail us at pharmafranchiseehelp@gmail.com

Related Articles:

How Much Investment is Required to Start Pharmaceutical Company?

Most of person has issue of investment. 98 out of 100 person who think to start own business faces investment problem. Investment and money is most important prospect for starting any type of business. Here we are providing some basic calculations to calculate investment required to start pharmaceutical company.

Pharmaceutical Sector is one of the fastest growing sectors in world. As we have discussed in our Article: How to start Pharmaceutical Company? Pharmaceutical companies are of two types:

  • Pharmaceutical Marketing Company
  • Pharmaceutical Manufacturing Company

Investment required for both types of companies are also different. While preparing a Business Plan, investment is an important part of it. Pharmaceutical Marketing Company require less investment as compare to manufacturing company because manufacturing unit requires lot of machinery, a world class infrastructure, building and much more.

In this article we will try to calculate total investment required for starting marketing company and manufacturing company. Investment is of three types generally:

  • Fixed Capital Investment (One Time investment)
  • Working Capital Investment (Investment to run a company)
  • Inventory Investment (Stock, Raw Material, packaging material etc.)

Fixed Capital Investment:

We can say it also as One Time Investment. Fixed Capital Investment is the investment in fixed assets (like land, building, office, vehicle, machinery and equipment etc.). Fixed Capital Investment will be different for marketing company and manufacturing company.

Working(Operating) Capital Investment:

Working investment is liquid assets needed to run a company. Operative capital includes salary, wages, raw material cost, and marketing & promotional expenses etc. These are planned and unplanned investments (timely arise) require in daily basis to smoothly run an organization. Operating capital investment require till company start to earn adequate profit to handle its regular expense and wages.

Inventory Management:

Third type of Investment required for Stock and Product Availability (Inventory). Inventory investment depend at number of products you want to launch and manufacture in starting.

Investment Required for Pharmaceutical Manufacturing Company:

Pharmaceutical Manufacturing is a highly investment project. Major portion of investment will invest in purchasing a land, Building and infrastructure etc. This can be prevented if you start at rented premises and building. But location, area, plant and building infrastructure should meet with requirement of GMP certification (WHO: GMP and/or Schedule M).

Area required and machinery detail for starting manufacturing unit, you can read at our article:  Area and machineries required for each section in Pharmaceutical Manufacturing Unit.

If you have own land and building that Good, but that is also an investment. We will consider it as investment. If you don’t have, you have two options: Either you purchase or you take a building at rent. In case of rented premises, rent and/or deposited money will be calculated as investment.

It’s not easy to calculate actual investment as cost of land, plant, cost to build a building, rent, machinery and equipment, staff salary, worker wages are not same at all locations, area’s, states and countries. Cost of any particular thing, we will replace with any alphabets. By replacing that alphabet with cost of that thing in you locality, you can calculate actual investment required to start pharmaceutical manufacturing company.

Requirements for Starting Pharmaceutical Manufacturing Unit:

Fixed assets:

  • Land (L)
  • Building (B)
  • HVAC (Heating, Ventilation and Air Conditioning) System (H)
  • Air Lock System (A)
  • Fitting, Finishing and Furnishing (F)
  • Machineries and Lab Equipments (M)
  • Electricity Supply (E)
  • Water Supply (W)
  • Compressed Air Supply (C)
  • Investment for completing Licenses and formalities (I)
  • Other Requirements (R)

Liquid Assets:

  • Skilled and Technical Staff Wages (S)
  • Non Skilled Worker Wages (N)
  • Repair and maintenance (H)
  • Rent if applicable (T)
  • Bank Loan installments and related expenses (I)
  • Promotional and Marketing (P)
  • Other expenses (J)

Inventory Investment:

  • Raw Material and Packaging Material Stock (R)

You need to calculate fixed capital investment and operating capital investment separately. This will help to establish and run manufacturing company smoothly. Fixed capital investment can be calculated by adding fixed assets cost where as operating capital investment can be calculated by adding liquid assets.

Fixed Capital Investment = L+ B + H + A + F + M + E + W + C + I + R

Operative Capital Investment = S + N + H + T + I + P + J

Other than these, a manufacturing company also needs to market its own product in market. So it also requires investment needed for marketing and promotion as needed by marketing company. We can also include investment that will require for starting pharmaceutical marketing company in below portion.

Investment Required for Pharmaceutical Marketing Company:

Investment for Pharmaceutical Marketing Company is relatively low as compare to manufacturing company. In marketing company there is less infrastructure and capital required. For marketing company, less space, small office and fewer requirements are needed but marketing and promotional budget could be higher side.

A pharmaceutical manufacturing company has few addition marketing tools other than conventional marketing tools and advantage in marketing like third party manufacturing, contract manufacturing, loan licensing, greater reputation and institutional supply etc. That is not available for pharmaceutical marketing companies. Marketing has to reliable at conventional marketing solutions like ethical, generic, pcd, franchise etc only.

In marketing company, office and premises can be at rented basis if not owned. If owned premises, we will add it in fixed capital investment. Otherwise rent will be considered as operating capital investment.

Fixed Assets:

  • Office Building (B)
  • Office Furniture and Accessories (A)
  • Computer and Electronic Equipments (C)
  • Fitting and Furnishing (F)
  • Investment at licenses and documents (L)
  • Other Requirements (X)

Liquid Assets:

  • Office Staff Wages (O)
  • Rent if applicable (R)
  • Bank Loan installments and related expenses (I)
  • Promotional and Marketing (P)
  • Other expenses (J)

Inventory Investment:

  • Stock Investment (S)

Fixed Capital Investment= B + A + C + F + L + X

Operation Capital Investment+ O + R + I + P +  J

Marketing Strategy and promotional methods are almost same for marketing and manufacturing companies. So there marketing and promotional expenses are almost same.

Above we have discussed about investment required to start pharmaceutical company. In short discuss about factors that affect investment for starting pharmaceutical company.

Factors:

Land Cost:

Cost of land is different at different localities. Possibilities is there if some where you can find land at cheap cost and some where cost of land is high.

Building and Premises Furnishings:

Building construction as per GMP certification is very essential for setting up manufacturing unit. A good architect is needed for it. Also building material cost varies place to place. That makes different in investment to construct a building at different places.

HVAC, Air Lock System and other machineries & equipments:

Some countries and localities are dependent at import for high quality systems and machineries for setting-up a plant. Also prices vary according to the manufacturers and quality of machineries and equipments.

Licenses and Documentation process and Fees:

Some regions and countries have relaxed policies in respect for licenses and documents to start pharmaceutical company. In some regions, it’s a difficult task to get any type of license even after completing all formalities. Bribe and unethical money distribution also affect the investment required.

Rent:

In case, you are in rented premises and/or building, rent at that particular locality affect the investment. In prime location rent may be high, in non prime locality rent would be relaxed.

Staff and Workers wages:

Easy availability of skilled and technical staff, Non availability of skilled staff directly or indirectly affects operation investment. If available then investment will be lesser otherwise skilled staff recruitment from outside locality may increase operation investment.

Investment required for Stock and Product Availability (Inventory Investment):

Stock may be in both assets fixed and liquid depend at situations. Stock is moving thing and will be in rotation as per demand and supply. Stock investment will be covered under Inventory management but here we will also cover important aspects regarding stock because it is an important part of Operative Capital Investment.

We can divide stock investment in three parts.

  • Initial Investment
  • Second investment in second batch to prevent shortage of products
  • Emergency money

You could need double of your initial investment as reserve money for smooth flow of stock at initial stage. You have to invest in market, doctors and products. You have to invest at stock irrespective of marketing and/or manufacturing type. You also have to invest at market by providing credit to chemist and stockiest.

Monthly Expenses:

Monthly expenses like Rent of Premises, Electricity bill, office expenses and other miscellaneous expenses depend at location and area. Some expenses like accountant/CA fee, quarterly sale tax return etc also will be added in your expenses.

Promotional Inputs:

Design of logo, company profile, product card, reminder card, catch cover, writing pads, visuals etc. Designing charges may vary printer to printer but most of printers do designing free of cost if you are printing all material from them.

Hope this article is helpful for you to calculate investment required for starting pharmaceutical company.

You can also read here about- how much you have to invest in third party manufacturing of your products?

You must read : Investment at Packing material of Each Dosage form also to prepare your complete budget.

We are also mentioning few queries related to Investment here for more elaboration. Hope you will get some help for these queries:

Query 1: I am a Doctor working in a reputed medical college. My wife is a gynecologist and she is in private sector. We want to start a pharma business of our own. What we want is that to have product packaging from reputed company and sell at our company name. Please guide us in following points. .
1. Starting budget is 12 to 15 lacs. Is it adequate?
2. Do we have to form a company to do that?
3. Where do we get quality manufacturer because we don’t want to comprise quality.
Please advice.

Response 1: You want to start pharma business and sell products from your name and thinking about starting your own Pharma marketing company.

  1. Starting budget is 12 to 15 lac. Is it adequate?

Starting budget depend upon number and type of products you want to get manufactured. Few products are costlier and few are cheaper in rates. The molecules and/or salts you want in your product list will affect your budget. For example, you are starting with 26 products and products are A, B, C etc. Your budget is depend upon rates of A to Z products.

If your products are costlier like Cefixime, Cefpodoxime, Cefuroxime , levofloxacin, Azithromycin etc then chances are you have to invest big amount. If you start with vitamins, ferrous combinations, nimusulide, paracetamol, ofloxacin etc then budget will be less. Above molecules are example purpose only, costing of products can depend upon circumstances.

12 to 15 lakhs is sufficient amount if you invest it wisely. We have seen person to start their own marketing company with amount as less as 1 Lakh.

You can start your company from 1 product or you can start with above 100 products or as number you want. We will recommend to start with lesser number of products and add new products gradually.

  1. Do we have to form a company to do that?

To work with your company name, you have to start your own marketing company. Read Procedure by clicking following link: How to start your own pharma marketing company

  1. Where do we get quality manufacturer because we don’t want to comprise quality?

Searching for Quality manufacturer is difficult task but you can find good quality manufacturer easily. You are doctor and prescribe medicines. You better know which product is good in quality and efficacy. Products which you are prescribing will have manufacturer address. Even multinational companies like pfizer, lupin, cadila, sun pharma, unichem, cipla are also get manufactured their products at third party or loan license basis. See the address of manufacturer on strip or box, you trust the most. You can easily find quality manufacturer address. Search for that manufacturer at internet and will get contact number easily. Contact them and ask them to manufacture your products.

Query 2:Estimate Budget for Pharmaceutical Marketing Company!!!

Query 3:How much cost required to set-up pharma marketing company office?

Query 4:I want to start my own pharma company with multivitamin, iron and calcium. Please send me the budget.

Query 5:How much cost required to set-up pharma marketing company office?

Query 6:What will be budget for pharma company, please guide us !!!

Query 7:I want to start a pharma company with two products

Query 8:I want to start pharma marketing company. I want to know of budget of starting business

If you want to know about estimated budget for your new marketing pharma company read here…

You will also need to find out price to retailer/price to stockist read here…

Hope you have found it useful…..

For any query and suggestion mail us at pharmafranchiseehelp@gmail.com