We remember when we hear about DPCO (Drug Price Control Order) in 2013 for first time. That was time when pharmaceutical sector feels the heat of low margin. Before DPCO, High MRP and High profit margins lucre other business professionals to enter into pharmaceutical sector. After DPCO, Pharma sector started to change. In initial stage 348 essential drugs had been taken under price control. After implementation, more and more drugs have been added in price slab.
DPCO is not single thing that makes pharma business less lucrative. DPCO Mrp is reasonable to earn good profit margin but many other factors that are making harder to start pharma business. Recently price control in American market put Indian Pharmaceutical Companies under pressure. India is second largest exporter of generic medicines to USA. Indian Pharmaceutical Companies enjoy high profit margins in regulated and developed countries that they can’t think to earn in India and other developing countries. This price and margin pressure may continue to other countries as well. Road a head to pharmaceutical companies is not easy and margin able.
Other Factors that becoming pharma business tougher and harder with time is as follow:
Competition: Pharmaceutical sector has one of the most competition sector. At daily basis more than 15 medical representatives visit to a single doctor for prescribing his company’s products. Numbers may be increase at some area’s. As companies pressure of building sale is increasing, sales professions start to convince doctors with any possible way, ethical or non ethical. This cut throat competition makes harder place in pharmaceutical market to open new business.
Strict rule and Regulations: With time, as a sector develops, rules and regulations start to become strict to compile with growth. Indian Pharmaceutical Market will be in top 3 by 2020 but Indian Pharmaceutical Market lacks standards which compiles with international standards. There is need of more regulations and standards to meet standards with respect to international norms. At regular basis, pharma sector is experiencing new rules and regulations. Recently announced regulations are E-portal, plant specification should compile with WHO-GMP standards, compulsion of pharmacists at medical store, ethic codes for Doctors, new pricing authority etc.
Price Control Pressure Internationally: With increase of price control pressure internationally, Indian big pharmaceutical companies will increase their concentration at domestic market. This may benefit Indian internal pharmaceutical market but this will make situations more tougher and take competition at highest level.
Online Pharmacies: Online Pharmacies in Indian is not popular currently but it is building its presence and becoming popular in some parts. We can’t neglect power of internet in digital era. Online Pharmacies will affect our distribution system in pharmaceutical sector i.e. Retailers/Chemists, Wholesalers etc. Slowly but steadily online pharmacies are being accepted by patients. In long run it is going to be important part for selling pharmaceutical products.
Highly Invested: Last but not the least. Pharmaceutical business starting cost is increasing day by day. Investment is increasing whereas margin is declining. This makes pharma business tougher to start.
But still Pharmaceutical sector is lucrative one. People are enjoying doing business in this field and making money. For Persons having experience is pharmaceutical sector, starting business is easy as it were be.
Thanks for giving time to read it…
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