How does Pharma franchise/pcd business work?

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Basic things in Pharma franchise and marketing are not so complex. It is as simple as you appoint distributor for your company that will also do marketing for you along with distribution and supply.

Manufacturing cost for a molecule will be same in all cases whether it is ethical drug or franchise drug. For example if cefixime manufacturing cost is X/-. It will be same whether you are going to sell it in ethical market or franchise/pcd market or generic market. What do make the rate difference are marketing and distribution expenses.

In direct/ethical marketing, company bears all expenses whether it’s marketing, distribution, travelling, employee or other routinely expenses. So, they add these expenses in their cost and print the MRP including their profit of margin and all expenses in cost.

Same in case of franchise/pcd marketing, Pharma companies don’t do direct marketing, hence their marketing expenses are negligible as compare to direct marketing companies. They only responsibility to manufacture and marketed their products as per satisfaction of their franchisee. They add their profit of margin at manufacturing cost and sale at that rate to franchisee. These rates are known as Net rates.But they don’t add sales and marketing expenses that they don’t spent directly. Sale and marketing work is done by their franchisees/distributors/marketing person.

Franchisees market their products at own cost or promotional material supplied by company or arranged by themself.These franchisees are mostly sale and marketing persons or distributors those have strong hold in market and good relationships to doctors and Pharma professionals. They get product at net price basis and do marketing and sell products at trade rate, stockist rate, mrp or net rate. You can find calculation of net rate, traderate, stockiest rate or MRP by click here

Persons or distributors those do marketing for franchise companies are known as Pharma Franchisee Partner. Companies those work at this concept are known as Pharma Franchise Partner. Companies supply medicines at net price basis and franchisees sell it at trade rate, stockist rate, mrp or net rate after considering their profit. Read Here How to calculate ptr, pts with any mrp?

This is like a business partnership between two parties. Both partners are dependent on each others. For selling products, companies have to depend at their franchisee associates where as franchisees have to depends upon companies for regular and routinely supply of medicines.

In Pharma franchise system, calculation of profit and expenses is similar as in case of direct/branded/ethical marketing. Only difference is that in this system have two different parties that complete one single work at sharing basis. Both get more benefits with minimum risk and minimum infrastructure.

Pharma companies prevent their sales expense and franchisees/distributors/marketing persons prevent office/manufacturing expenses with huge investment of starting own pharma company. In this system, there is no requirement of big team or long distribution channel. It requires one Pharma Company with his own brands and one person or distributor who wants to sell Pharma products in own marketing.

above is the basic concept about how do Pharma franchise work?

If you are seeking to start franchise of Pharma Company or going to start Pharma Franchise Company, you can write us at contact box or mail us at pharmafranchiseehelp@gmail.com

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Query:  

I am a retail medicine shop owner with TIN number and drug license number to sell medicine on retail. If I wish to take PCD for a pharmaceutical company and sell in nearby area with 1/2 sales person, do I have to take a separate Tin and Wholesale Drug license number for it or I can operate with my existing one?  

Response:

You can get take pcd medicine at your existing retail license and tin number but if you want to cover nearby area with 1 or 2 medical representatives then you have to available medicines at other retailers also. With existing retail license, you can’t bill to other retailers. Then your purpose will not solve. So, you have to take a new wholesale license or you can change your existing retail license to retail + wholesale license and your all purposes will be solved. Hope this information will be helpful to you… For more detail and queries related to Pharma franchise mail us at pharmafranchiseehelp@gmail.com or write in contact box…

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