I am a pharma graduate. I am currently researching about the pharma supply chain in India. I also read your article in a pharmaceutical blog.
I just have a few questions on the overall supply chain. Kindly spare some of your time to answer some of my questions. it will be very useful…
Question 1): I want to know if profit margins for retailers/wholesalers differ for small molecules (paracetamol etc.) and large molecules/biologics (antibodies for cancer, vaccines etc)? because biologics might require a special cold supply chain (Refrigerator), so is there a chance for higher profit margins in that case?
Response: Profit margin for retailers/wholesalers depends at many factors like market competition of that molecule, availability, demand, supply, patented etc. Profit of margin rarely affected by requirement of supply chain because it is handled by companies. Large molecules/biologics (antibodies for cancer, vaccines etc.) are unique products and their availability is limited and supplied by only few companies so there is less competition in that segment. If there is less competition in any segment, there is chances for less profit of margins for retailers and wholesalers and more margins for companies.
Question 2): Drug manufacturing companies decide to give discounts or offers on their products. will the profit margin of the wholesalers/retailer’s product be on discounted/undiscounted price?
Response: Profit of margin is fixed at certain price and at that price, products will be supplied to retailers and wholesalers. Discounts and offers are provided extra. These are additional advantages for retailers and wholesalers other than profit of margin.
Question 3): If a pharma MNC company has a franchise in India, do distribution of products go through the franchise or a carry forwarding agent or both? What could be their profit margins?
Response: In most of cases, MNC companies don’t do business at franchise model. They work either by setting up own sales team and distribution channel, providing licensing or selling sales and distribution rights for their brands to other companies.
Question 4): Do doctors in private hospitals prescribe drugs available only in the hospital pharmacy? or do they have freedom to prescribe others?
Response: Doctors have freedom to prescribe medicines at their own. It’s medical representatives’ responsibility to make available drug at hospital pharmacy for that he/she has convinced doctor to prescribe for.
But it’s doctor’s responsibility to prescribe medicines that are available at hospital pharmacy or nearby pharmacy so patients don’t have to struggle to find medicines that doctor prescribed.
Question 5): Do these private hospitals procure biologics through tenders for lower price? how does it work? will the same apply for government hospitals?
Response: Depends at hospital’s size and consumption. Small private hospitals don’t procure through tenders. They are dependent at local wholesalers and distributors. Big and corporate hospitals may procure through tenders but not limited to tenders.