An in-Depth-study of OTC Medicine Segment of Indian Pharmaceutical Industry With Special

N.R.Institute of Business Management Page 1

RESEARCH TOPIC An In-depth-study of OTC medicine segment of Indian Pharmaceutical Industry with special

emphasis on consumer behavior

RESEARCH OBJECTIVES Macro objective

To study the Indian Pharmaceutical Industry as a whole

Micro objectives To understand the consumer’s attitude towards OTC products of the pharmaceutical

industry

To understand the healthcare products’ contribution and also its effects on pharmaceutical

market

To determine the extent to which the respondents prefer self-medication instead of going

to the doctor for common health problems

To find out the criteria on which the consumers rely for making their purchase decision

regarding OTC products

To find out the extent to which consumers read the labeling information before making a

purchase

To find out the extent to which the respondents perceive OTC products as safe to use

To understand the influence of advertising on consumer behavior towards them

To find out the most preferred brand in each OTC product category

To know the frequency of purchase of OTC products by the consumers

To know the preferred medium of communication for advertisement of OTC products

RESEARCH METHODOLOGY

Research Design: Target Population: Population of the research is the consumers who are well aware of

the OTC products and who are above 18 years of age


Research Design : Descriptive Research

Sampling unit: Same as the sample element

Sampling Technique: Convenience sampling

Sample Size : 300 sampling units selected from the Target population

Contact Method: Researcher have contacted sampling units personally and with the help

of one to one interaction researcher have conducted survey.

Extent: The location considered by the researcher is Ahmedabad city.

Data Sources: Primary Source:

Questionnaire

Secondary Sources:

Books like Marketing Research by Malhotra

Journals

Websites

Reports

LIMITATIONS OF THE STUDY

The main limitation of the study is the time span available with researcher for conducting

the research is 6-8 months.

Another limitation is that the scope of the researcher’s study is Ahmedabad city. So the

population considered may not be the actual representative of the population of the

nation.

The information given by the respondents can be biased.

In order to limit the scope of the project only 5 categories of OTC products segment were

included based on frequency of usage, in the question that ask for highly consumed

brand.


INTRODUCTION:

The pharmaceutical industry is a knowledge driven industry and is heavily dependent on

R&D for new products and its growth. However, Basic Research (discovering new molecules) is

a time consuming and expensive process and is thus, dominated by large global multinationals.

In the Global Pharmaceutical Market, Western Markets are the largest and fastest

growing due to introduction of newer molecules at high prices. A well-established

reimbursement and insurance system implies that per capita drug expenditure is abnormally high

in Western Countries as compared to the developing nations.

The Indian Pharmaceutical Industry is highly fragmented, but has grown rapidly due to

the friendly patent protection, low cost manufacturing structure, intense competition, high

volumes and low prices. Exports have been rising at around 30% CAGR over last five years.

The Drug Pricing Control Order (DPCO) has severely restricted profitability and hence

innovation. However, the government has been relaxing controls in a slow but progressive

manner. The span of control of DPCO has come down from 90% in 1980s to 50% in 1995 and is

likely to be further reduced as per the latest proposed changes.

In the domestic market, old and mature categories like anti-infective, vitamins, analgesics

are degrowing or stagnating while new lifestyle categories like cardiovascular, CNS, anti

diabetic are growing at double-digit rates. The growth of a company in the domestic market is

thus critically dependent on its therapeutic presence.

DEFINITION OF PHARMACEUTICALS:

Pharmaceuticals are substances known as medicines, used in preventing and curing

illness and disease. Usage of pharmaceutical is governed by underlying science of illness and

disease. The branches of medical science are shown in the following figure.


Ancient civilization allowed India to develop various kinds of medical and

pharmaceutical systems. In addition to the allopathic system, which is prevalent in the United

States, Japan and Europe, the following types of medical and pharmaceutical systems are used by

the Indian people:

Medical Science

Allopathy: It is known as the modern medicine and world over the pharmaceutical

industry is focused upon it.

Ayurveda: Ayurveda translates as the “science of life”. It encompasses fundamentals

and philosophies about the world and life, diseases and medicines. The knowledge of

Ayurveda is compiled in Charak Samhita and Sushruta Samhita. The curative treatment

lies in drugs, diet and general mode of life.

Siddha: The Siddha system is one of the oldest Indian systems of medicine. Siddha

means “achievement”. Siddhas were saintly figures who achieved healing through the

practice of yoga. The Siddha system does not look merely at a disease but takes into

account a patient’s age, sex, race, habits, environment, diet , physiological constitution

and so forth. Siddha medicines have been effective in curing some diseases, and further

work is needed to truly understand why this system works.

Unani: The Unani system originated in Greece and progressed to India during the

medieval period. It involves promotion of positive health and prevention of disease. The

system is based on the humoral theory i.e. the presence of blood, phlegm, yellow bile and

Allopathy Ayurveda Siddha Unani Homeopathy Naturopathy


black bile. A person’s temperament is accordingly expressed as sanguine, phlegmatic,

choleric or melancholic. Drugs derived from plant, metal, mineral and animal origins are

used in this system.

Homeopathy: Homoeopathy is a branch of therapeutics that treats the patient on the

principle of “SIMILIA SIMILIBUS CURENTUR” which simply means “Let likes be

cured by likes”. Homeopathy seeks to stimulate the body's defense mechanisms and

processes so as to prevent or treat illness. Treatment involves giving very small doses of

substances called remedies that, according to homeopathy, would produce the same or

similar symptoms of illness in healthy people if they were given in larger doses.

Treatment in homeopathy is individualized (tailored to each person). Homeopathic

practitioners select remedies according to a total picture of the patient, including not only

symptoms but lifestyle, emotional and mental states, and other factors.

Yoga and Naturopathy: Yoga and Naturopathy are ways of life. In naturopathy one

applies simple laws of nature. It advocates proper attention to eating and living habits. It

also involves hydrotherapy, mud packs, baths, massage and so forth. Yoga consists of

eight components: restraint, observance of austerity, physical postures, breathing

exercises, restraining of the sense organs, contemplation, meditation and Samadhi.

Increasing interest exists in revisiting these ancient drug systems.

MANUFACTURING PROCESS:

Step by step manufacturing process has been described on subsequent page.

Bulk drugs are prepared by appropriate reactions of natural/synthetic intermediate raw

material under controlled conditions.

Right dosage of the bulk drug (active ingredient) is mixed with filler substances (passive

ingredient), to make the formulation acceptable. This is done in a batch process.

Formulations are packed according to their physical form - blister strips for

tablets/capsules, bottles for liquids or ampoules for powders. Each pack must have price,


expiry date, storage conditions and dosage. Stringent quality control is must at each stage

as per the requirement of concern authority. The following figure shows the flow chart

for manufacturing process.

Manufacturing Process

INTERMEDIATE RAW MATERIAL

(Plant derivatives/ Animal derivatives/ Synthetic Chemical)

BULK DRUGS ACTIVE INGREDIENT

(Raw medicines can’t be used for medicinal purpose)

FORMULATION (Packed with proper instruction

regarding price, expiry date, storage condition and dosage)

FILLER SUBSTANCE PASSIVE INGREDIENT

(To make bulk drugs

PATIENTS

(Either directly or under prescription of the doctors)


BULK DRUGS AND FORMULATION: In basic form, pharmaceutical are called bulk drugs. They are derived from intermediate raw

material, namely

Plant derivatives

Animal derivatives

Synthetic chemicals

Bulk drugs in their raw form cannot be used as medicine and they have to be converted in to

form in which human can use them as medicine. This type of final dosage form is known as

formulations. Formulations can be classified into two types namely,

Ethical products: These types of formulations are available only under medical

prescription to prevent misuse. Doctors, to cure a disease in the patient primarily

prescribe ethical formulations. Generally, for ethical products direct advertisements to

users are prohibited.

Over The Counter: These types of formulation known as OTC can be purchased by

users directly, for example pain balms, health tonics etc. For OTC product, direct

advertisements to user can be used to promote product under certain conditions.

Formulations can be categorized as per the route of administration to patients, namely,

Oral: They are taken internally by patients, for example tablets, syrup, capsules, powders

Topical: They are applied on skin, for example creams, ointments, liquids, aerosol etc.

Parenterals: They are injected in an intravenous and intramuscularly fashion.

Others: It includes eye drops, surgical dressings etc.

RESEARCH & DEVELOPMENT: Pharmaceutical industry is driven by a need to conquer disease. New diseases emerge as

humans find the solution to cure old diseases. New medicines are developed to treat new diseases

or existing medicine are reformulated to improve upon the treatment of existing diseases. That is


why R&D of drugs is a key to success in the pharmaceutical industry. Four kind of research are

conducted in the pharmaceutical industry namely,

1. Fundamental or Basic Research: This involves discovering new molecules from

scratch. No Indian company does Basic Research, simply because it is very expensive.

Indian drug companies do not make the kind of profit required for this kind of research.

In the West, hi-tech equipments screen, can compound a cost up to $3 billion.

2. Process research or Reverse Engineering: This involves a copy of existing molecule by

manufacturing it with different process. Indian patent law, at present, covers process

patents, not product patents. Indian companies are very effective and efficient in reverse

engineering. However, a new paten law will obviously, not permit reverse engineering.

3. Analogue or Discovery Research: Companies modify an existing molecule (or a new

one that has not yet commercialized), after accessing international patent databases, to

arrive at a new molecule. Some of the bigger Indian companies like Dr. Reddy, Ranbaxy,

Cadila, and Torrent etc. are conducting discovery research or plan to do so.

4. Genetic research: It aims at establishing the link between genes and diseases and one

day determine the best drugs for individuals based on their makeup. World leaders of the

pharmaceutical industry have started devoting resources to this type of research called

“Genomic”. No Indian company does this kind of research, but several government or

academic institutions like National Institute of Immunology, New Delhi and Center for

Microbiology, Hyderabad have begun work in this area.

PATENTS - A PROJECTION:

Discovery of a new drug or modifications on existing drug requires intensive R&D efforts

and companies have to spent huge amount on R&D to find new drugs or modify existing one. If

a protection is not provided to innovator of drugs no one would prefer to spend on R&D and it


will hinder to growth of pharmaceutical industry and of human being. To protect the interest of

an innovators patent is provided to ensure commercial gains on their R&D investment. Patents

are a vital aspect for the global pharmaceutical industry. Two kind of patent protection is granted

to the innovators by different countries, namely

Product patent: It provides an exclusive manufacturing and licensing rights of product,

to innovator of that product for a stipulated time period. So, if company A discovers drug

Z then no other manufacture can produce drug Z without consent of company A. At

present only the developed nations endorse product patent.

Process patent: It provides an exclusive manufacturing and licensing rights of process to

manufacture a product, to innovator of that product for a stipulated time period. So, if

company A discovers drug Z by process P then no other manufacture can produce drug Z

by process P without consent of company A. But other manufactures can produce drug Z

by any other process then P. Most under developed nations endorse process patent.

Patent is granted for stipulated time period. Once this time period gets over a drug

becomes off patent or generic and any one can manufacture that drug. Based on this criteria

drugs can be classified as:

Under patent

Generic or off patent

THERAPEUTIC MARKET SEGMENTATION:

Commencing with repackaging and preparation of formulations from imported bulk

drugs, the Indian industry has moved on to become a net foreign exchange earner, and has been

able to underline its presence in the global pharmaceutical arena as one of the top 35 drug

producers worldwide. Currently, there are more than 2,400 registered pharmaceutical producers

in India. There are 24,000 licensed pharmaceutical companies. Of the 465 bulk drugs used in


India, approximately 425 are manufactured here. India has more drug-manufacturing facilities

that have been approved by the U.S. Food and Drug Administration than any country other than

the US. Indian generics companies supply 84% of the AIDS drugs that Doctors without Borders

uses to treat 60,000 patients in more than 30 countries. However total pharmaceutical market is

as follows:


INTRODUCTION:

The pharmaceutical industry is a very unique and spectacular industry, with an

impressive evolution along the 20th and the beginning of the 21st centuries, as well as facing a

challenging future. The situation in the industry at the global level has spectacularly changed in

the past two decades, leading to new strategies and new portfolios, especially for the major

pharmaceutical companies worldwide. The current pharmaceutical industry characterizes as a

mature and stable industry that is constantly affected by mergers and acquisitions, as well as by

new scientific discoveries. Therefore, it becomes very essential to understand the global scenario

and the current trends in the pharmaceutical industry for the companies to operate in a single

market and serve the mankind across the globe. In this chapter an overview of the global

pharmaceutical industry has been given. Starting from the origins and evolution of the global

pharmaceutical industry to the current market structure and the industry trends are being

discussed. Also the challenges that are faced by the global pharmaceutical industry are

mentioned. Finally the future outlook is being provided for the current year 2009 based on the

predictions of IMS Global Pharmaceutical and Therapy Forecast 2009.

The pharmaceutical industry is a knowledge driven industry and is heavily dependent on

R&D for new products and its growth. However, Basic Research (discovering new molecules) is

a time consuming and expensive process and is thus, dominated by large global multinationals.

In the Global Pharmaceutical Market, Western Markets are the largest and fastest

growing due to introduction of newer molecules at high prices. A well-established

reimbursement and insurance system implies that per capita drug expenditure is abnormally high

in Western Countries as compared to the developing nations.

ORIGINS AND EVOLUTION: The modern pharmaceutical industry is a highly competitive non-assembled1 global

industry. Its origins can be traced back to the nascent chemical industry of the late nineteenth

century in the Upper Rhine Valley near Basel, Switzerland when dyestuffs were found to have

antiseptic properties. A host of modern pharmaceutical companies all started out as Rhinebased

family dyestuff and chemical companies e.g. Hoffman-La Roche, Sandoz, Ciba-Geigy (the


product of a merger between Ciba and Geigy), and Novartis etc. Most are still going strong

today. Over time many of these chemical companies moved into the production of

pharmaceuticals and other synthetic chemicals and they gradually evolved into global players.

The introduction and success of penicillin in the early forties and the relative success of other

innovative drugs, institutionalised research and development (R&D) efforts in the industry. The

industry expanded rapidly in the sixties, benefiting from new discoveries and a lax regulatory

environment. During this period healthcare spending boomed as global economies prospered.

The industry witnessed major developments in the seventies with the introductionof tighter

regulatory controls, especially with the introduction of regulations governing the manufacture of

‘generics’. The new regulations revoked permanent patents and established fixed periods on

patent protection for branded products, a result of which the market for ‘branded generics

emerged.

Branded companies: Branded companies are the innovative companies that carry out the

Research and Development (R&D) of new drugs (or contract this process). Initially, their

products are protected by patents. The clinical test data, used for the approval of the drugs, is

usually protected as well.

Generic companies: Generic companies produce drugs that they have not developed

themselves. Normally these drugs are not protected by patents anymore. However, many

branded companies have divisions or subsidiaries that produce generics as well.

With regard to the products of these companies, three categories of drugs are commonly

distinguished.

Prescription drugs These have to be prescribed or administered by healthcare

professionals.

Over the counter (OTC) drugs also called self-medication drugs. These can be

purchased without a prescription.

Vaccines These are usually regarded as a separate category next to pharmaceuticals. In

contrast to pharmaceuticals, vaccines are not based on chemical compounds but on live

bacteria and viruses. The production process of vaccines is therefore quite different and far

more complicated.


GLOBAL SCENARIO:

The global pharmaceutical market can be classified into two categories: regulated and

unregulated/semi regulated. The regulated markets are governed by government regulations like

intellectual property protection, including product patent recognition. As a result, they have

greater stability in both volumes and prices like the United States. The unregulated/semi-

regulated markets have lower entry barriers in terms of regulatory requirements and hence, they

are highly competitive. The global pharmaceutical companies till 2010 will be closely regulated

by emerging issues like patent safety, side effects, adverse action reporting, strengthening

harmonization and regulations and stronger clinical evidence. Global pharmaceutical market has

increased its focus on novel drugs, good delivery system, and new chemical entities. The other

factor which is driving the growth of global pharmaceutical market is speeding up regulation in

bio-generic segment. Moreover there will be shift in growth from top ten markets to emerging

economies. The global pharmaceutical market will change its shape from primary care driven to

specialty care driven that is oncology and biotech. The global pharmaceutical industry will take a

shape of virtually integrated pharmaceutical company. There is a widening gap between mature

market performance and emerging market performance, which will require many pharmaceutical

companies all over the globe to make changes throughout their operations from shifting their

sales and market, revising there strategies, changing there business models to fuel there growth.

For the global pharmaceutical industry, 2008 will be a year of softening growth and a

widening gap in performance between the increasingly generalized and cost-constrained mature

markets, as well as the burgeoning ‘pharmerging’ sectors where demand is growing and

economies and access to healthcare are expanding at record levels. Marking an important

inflection point for the industry, for the first time the world’s seven key markets (US, Japan, UK,

Germany, France, Spain and Italy) will drive less than half of the industry’s growth in 2008,

while the pharmerging markets will contribute nearly a quarter of growth worldwide (Figure 1).

Further divergence will be apparent between primary care-driven and specialist-driven therapy

areas, and between therapy classes with major unmet needs and innovations, and those

dominated by generics.


PACE OF THE MARKET GROWTH:



INDUSTRY TRENDS:

Structural changes: The pharmaceutical industry is currently undergoing a period of

very significant transformation. The majority of “Big Pharma” companies are generating

high returns which provide them with excess cash for further rapid growth – whether

organic, or through mergers and acquisitions. In pharmaceutical industry size of the company

on its own is a significant advantage. Besides economies of scale in manufacturing, clinical

trials and marketing, bigger companies can get a competitive advantage by allowing

investments in more research and development (R&D) projects which in turn diversify their

future drugs portfolio and make them much more stable in the long term. As the result, top-

companies in the industry were active participants of mergers and acquisitions (M&A). Another form of structural change in the industry was establishing of new strategic alliances and joint ventures. So far as the research and development process for each drug take many years and requires significant investments, and the outcome of these investments of time and financial resources remains unclear until the final approval of the drug, “Big Pharma” companies are constantly looking for synergies that they can get from cooperation with their competitors. For example, cooperation of Sanofi-Aventis and Bristol-Myers Squibb resulted in production of Plavix, which is currently one of the top-selling products for each of these companies. Yet another trend is selling off low-profitability or non-core businesses. “Big

Pharma” companies in order to maintain strong sales growth and meet profitability

expectations of their shareholders actively engage in these activities. For example, in 2003

Merck sold its low-profitability Medico Health Solutions that helped to increase its

profitability margin. Massive sales of non-pharmaceutical businesses by Takeda also were

compatible with its strategy to concentrate its financial resources on its core pharmaceutical

business.

Major factors of future growth: The pharmaceutical industry showed high sales

growth rates in the recent past, and a number of factors suggest that this trend will continue

in the future. Some of these factors are:


1) According to various studies, a significant portion of elderly population in the United

States and other countries does not receive proper treatment. For example, only about one

third of the U.S. population who requires medical therapy for high cholesterol is actually

receiving adequate treatment. As it is expected, the Medicare Prescription Drug

Improvement and Modernization Act starting from the beginning of 2006 will increase

access of senior citizens to the prescription drug coverage, thus increasing pharmaceutical

sales.

2) Although developing countries at the moment have a small portion of world

pharmaceutical sales, these countries also have a significant potential for the

pharmaceutical industry in the future. Fast growing economies in Asia, South America

and Central & Eastern Europe suggest an increasing solvency of population and make

these markets more and more attractive for “Big Pharma” companies. Further reforms of

legislation systems in the countries of these regions, especially regarding patent

protection issues, will inevitably result in growing pharmaceutical sales.

KEY CHALLENGES:

The main challenges for drug companies come from four areas. First, they must deal with

competition from within and without. Second, they must manage within a world of price controls

that dictate a wide range of prices from place to place. Third, companies must be constantly on

guard for patent violations and seek legal protection in new and growing global markets. Finally,

they must manage their product pipelines so that patent expirations do not leave them without

protection for their investment.

➢ Competition

The pharmaceutical industry currently represents a highly competitive environment. One can

distinguish three layers of competition for “Big Pharma” companies. First, obviously, “Big

Pharma” companies compete among themselves. Although not all leading pharmaceutical

companies cover all segments of pharmaceutical market, almost all of them are active in

R&D and production of drugs in the segments with the highest potential – such as treatment


of infectious, cardiovascular, psychiatric or oncology diseases. Secondly, “Big Pharma”

companies experience significant profit losses due to competition from the generic drug

manufacturers. Opposite to the research-oriented pharmaceutical companies, which invest

significant financial resources and time to develop new medicines, generic drug

manufacturers spend minimum resources on R&D, and start manufacturing already

developed by other companies drugs after their patent expiration. Because generic drug

manufacturers do not have to recoup high R&D costs, prices of their products are usually

much lower then those of major pharmaceutical companies; as the result, after patent

expiration, generic drugs manufacturers capture significant market share, dramatically

decreasing revenues of the “Big Pharma” companies. Finally, the whole pharmaceutical

industry competes with other health care industries. In this case, pharmaceutical companies

should not only demonstrate high efficiency of their products, but also provide obvious proof

of cost advantages in comparison with other forms of care.

➢ Price control Pharmaceutical companies have to operate in a highly regulated environment; the degree of

regulation to a significant extent depends on the country and type of the product. One of the

most important aspects of government regulation for pharmaceutical companies is price

regulation, and different countries have different policies on this issue. In the United States –

the largest and the most attractive pharmaceutical market – currently there is no direct price

control for non-government drug sales. At the same time, it is expected that Medicare

Prescription Drug Improvement and Modernization Act will potentially increase downward

price pressure. The majority of European countries control drug prices, and this downward

pressure on prices has been increasing during last years. Japan has even stricter price controls

than European countries; all prices are controlled by the government, and they are subject to

a periodic price review. As the result of price control, prices of the same products can

significantly differ in different countries.


Protection of patents Generic drugs manufacturers represent a significant threat to research-based pharmaceutical

companies. For example, Schering-Plough’s Claritin patent expired in 2002; as the result of

generic drug competition, sales of Claritin by Schering-Plough declined from $3.2 billion in

2001 to $1.8 billion in 2002 and to $0.37 billion in 2003.Moreover, generic drugs

manufacturers sometimes start production of patent-protected drug analogues even before a

patent expires. Although research-oriented companies in many cases are able to protect their

patents, they do suffer from lost revenues. Therefore, protection of patents is one of the key

conditions necessary for further development of the pharmaceutical industry. At the same

time, non-efficient legislation that does not provide the necessary level of patent protection is

one of the factors that hamper expansion of “Big Pharma” companies to the developing

countries.

➢ Drugs portfolio management

Drug portfolio management is one of the most important determinants of long-term

prosperity of research-oriented pharmaceutical companies. First, it takes an extremely long

time to develop a new drug, and only a very small portion of all projects is successful.

Projects that the company starts today will determine its financial performance 10-15 years

later. Therefore, careful planning of R&D projects is very important for the long-term

stability of the company. Second, insofar as patents keep exclusivity of drugs only during a

limited time, and soon after the expiration of the patent the sales of the drug sharply go

down, the company has to carefully monitor its patent expiration dates, and insure that new

products become available by that date. Otherwise, we are reminded of the case of Shering-

Plough, when after expiration of its major drug patent the company did not have a new

product of similar value and the company experienced losses in 2003 and 2004. Definitely,

planning errors or rapidly changing demand in the industry can be corrected by acquisition of

smaller research companies or patents from competitors, but in any of these cases the

company will have to pay a premium price, thus reducing its profitability.


Major Players in the Market:

The pharmaceutical industry is characterized by a high level of concentration of

multinational companies dominating the industry. Table below contains information about

the top 10 pharmaceutical companies across the globe that are sorted in the order of their

2009 revenues of pharmaceutical products in terms of US dollars.

Rank

Company Country Total Revenues (USD millions)

1 Johnson & Johnson

United States 61,897

2 Pfizer United States 50,009

3 Roche Switzerland 45,304

4 GlaxoSmithKline United Kingdom 44,421

5 Novartis Switzerland 44,267

6 Sanofi-Aventis France 40,870

7 AstraZeneca United Kingdom 32,804

8 Abbott Laboratories

United States 30,800

9 Merck & Co. United States 27,428

10 Bristol-Myers Squibb

United States

24,158


CONCLUSION:

Given the changing trends in the industry's global value chain and gradual shifts in

international trade patterns, if the former pioneers (US, UK, Switzerland, and Germany) wish to

remain competitive, they need to expand the development of new drugs. Otherwise, they will

face a continuing of the intensified competition from developing nations that has appeared over

the last decade as outsourcing investment in drug discovery and product development has grown.

Also, as major patents expire and generic companies in countries like Israel and India enter these

markets, this will be put added pressure from emerging economies on the former pioneer nations.

The political determinants that govern the pharmaceutical industry are all regulated by the Food

and Drug Administration. The government established this organization to protect the health and

safety of all customers by ensuring the quality of all drugs produced. As a result the regulations

are extremely strict and few drugs are actually passed and reach the open market. Entering the

field takes an immense amount of capital, due to the time needed to research, test and produce

the drugs. Also drugs that have already been created are protected under WTO patents. But, once

a successful drug is marketed, the industry can be very lucrative. The demand for

pharmaceuticals is relatively stable even if other markets decrease in an economic slump, so with

constant research and production of new drugs, a company can benefit largely. This therefore

would ensure global competitiveness and success for a corporation; that is if the drugs also

passed the other nations regulations. Over the past 50 years, the pharmaceutical industry has

experienced tremendous growth and change. Along with this growth has come a series of

pressures to unite the industry under international standards and regulations. These international

regulatory guidelines have increased the barriers to entry in the international market and have

driven top firms to create voluntary corporate standards. Also, the idea of "corporate social

responsibility" has recently emerged as companies attempt to avoid liability issues and decrease

their impact on the environment. In addition, environmental certification issues are a becoming

driving force for change in the pharmaceutical industry. In the future, if pharmaceutical

companies are able avoid liability issues by adjusting social and environmental regulations; they

will be very competitive in the international marketplace.


INTRODUCTION:

Pharmaceutical Industry in India is one of the largest and most advanced among the

developing countries. It is ranked 4th in volume terms and 11th in value terms globally. It

provides employment to millions and ensures that essential drugs at affordable prices are

available to the vast population of India. Indian Pharmaceutical Industry has attained wide

ranging capabilities in the complex field of drug manufacture and technology. From simple pain

killers to sophisticated antibiotics and complex cardiac compounds, almost every type of drug is

now made indigenously.

Indian Pharmaceutical Industry is playing a key role in promoting and sustaining

development in the vital field of medicines. Around 70% of the country's demand for bulk drugs,

drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and vaccines

is met by Indian pharmaceutical industry. A number of Indian pharmaceutical companies adhere

to highest quality standards and are approved by regulatory authorities in USA and UK.

The Indian pharmaceutical industry traditionally relied on “reverse engineering” i.e.

product copying, through which vast profits were made. In recent years, however, the larger

domestic companies have realized the need to undertake original research and / or penetrate into

the regulated generics markets in the USA/EU in order to survive in the global market. At the

same time, the Indian pharmaceutical industry is renowned for supplying affordable generic

versions of patented drugs for illnesses like HIV/AIDS to some of the world’s poorest countries.

Some of the strategies that have been followed by Indian pharmaceutical companies for

their growth in the global markets have been as follows:

Geographic diversification with few companies focusing on increasing presence in the

regulated markets and others exploring the developing/under-developed markets of the

world.


As a part of diversification strategy, some of the companies have acquired brands,

facilities and businesses overseas. Some companies have even started their local

marketing in foreign markets.

Partnerships for supply of bulk drugs and formulations with the generic companies as

well as innovators.

For regulated markets such as the US, there are companies focusing on value added

generics, niche segments or patent challenges in the US.

Focus on offering research and manufacturing services on a contractual basis(CMOs and

CROs)

Apart from these strategies Indian companies have to devise newer strategies

continuously to survive in the highly competitive global market in an industry that is

characterised by - high capital requirement, high technical requirement, high process skills, high

value addition prospects, high export volumes, high market sophistication. Indian companies are

following the route of mergers and acquisitions to make inroads in the foreign markets. They

need to consolidate further in different parts of the world to become trans-national players.

Indian companies will have to rise above the statement of Michael Porter (1990), that most

multi-national firms are just national firms with international operations. They shall certainly be

at an advantage, as their strong national identities will give them a competitive advantage in the

global markets.

HISTORY:

The pharmaceutical industry in India has evolved through three phases over the past 50

years. The first was the period prior to 1970, when the industry was relatively small in terms of

production capacities. The second phase spanned the late 1970s to the early 1990s, a period

during which the industry experienced policy-induced growth. In its third phase, during the

1990s, much of the regulatory structure that the Government had imposed during the previous

two decades was dismantled. Even as late as the mid-1970s, India had a relatively small

pharmaceutical industry, with a total production of just over US$ 600 million. During the

subsequent four years, the total output of the industry more than doubled, the major contribution

being made by formulations, which accounted for 85 per cent of total production. Table 5.2.1


shows the production figures for the two broad segments of the industry: bulk drugs and

formulations.

The table shows an overwhelmingly large share of installed capacity of the Indian

industry was in the small-scale sector. In the 70’s 43 were affiliates of foreign firms in which the

parent firms' share in equity holdings exceeded 40 per cent. These foreign affiliates were deemed

to be “foreign-controlled” firms, in accordance with the guidelines stated by the Foreign

Exchange Regulation Act of 1973 (commonly known as FERA). This indicates that foreign

industry had a disproportionately high share in total production in the mid-1970s. They produced

42 per cent of bulk drugs and formulations put together and about 38 per cent of the bulk drugs

produced by the Indian industry. Major changes that contributed in the growth of this sector are

enumerated below:

1) The policy regime since the 1970s:

Three critical policy initiatives taken by the Government marked a turnaround in Indian

Pharmaceutical Industry:

a) The Drugs Price Control Order (DPCO), which was adopted in 1970.

b) Adoption of the new Patents Act, which became effective in 1972

c) Adoption of a new drug policy in 1978.

The above-mentioned policy initiatives were taken with two broad objectives in view: (i) to

develop a strategy for the expansion of the domestic pharmaceutical industry by relying


essentially on Indian enterprises, and (ii) to establish a structure for keeping the prices of drugs

within affordable limits.

a) DPCO, 1970

On 16 May 1970, a comprehensive order was promulgated under Section 3 of the

Essential Commodities Act and in super cession of all the earlier orders on the subject. This

order was called the Drugs (Prices Control) Order, 1970. In its introductory form, DPCO was a

direct control on the profitability of a pharmaceutical business, and an indirect control on the

prices of pharmaceuticals. The government stipulated that a company’s pre-tax profit from its

pharmaceutical business should not exceed 15% of its pharmaceutical sales (net of excise duty

and sales tax). In case profits exceeded this sum, the surplus was deposited with the government.

So, a pharmaceutical company had the freedom to decide the prices of its products. Product-wise

margins were also flexible, so long as the overall margin did not exceed the stipulated norm.

Since individual product prices did not require approval from the government, bureaucratic

hurdles were low. At that time, the Indian pharmaceutical industry was largely dominated by

MNC affiliates and subsidiaries. These MNCs were hardly affected by the relatively mild form

of DPCO and continued operating in the domestic market. However, FERA (Foreign Exchange

Regulations Act) which came in mid 70s did curb the operations of MNCs. Overall, the Indian

pharma industry prospered from 1970 to the next DPCO in 1979.

The first step towards evolving a comprehensive policy regime for the Indian

pharmaceutical industry was taken by the setting up of the Hathi Committee in 1974. The

Committee had an exhaustive mandate that aimed at the realization of the two broad objectives

mentioned above. The Hathi Committee presented its recommendations in 1975.

b) The Hathi Committee, 1974

The Hathi committee report which, under chapter –IV stated - “The committee believes

that health care has a direct relationship with socio economic growth of the country and a welfare

state should treat production, procurement and distribution of essential drugs, as a social


responsibility just as import as ensuring supply of food and shelter. With a view to tackling the

problem of large scale production of a Statutory Body which may be called the National Drug

Authority of India (NDA)”. The report had mentioned several functions for NDA. The

Government of India, however, did not accept this recommendation and no action was taken for

creating NDA. Thus the drug policy formulated by Government of India for the first time in

1978 did not include the concept of NDA.

c) The new drug policy of 1978

The new drug policy announced by the Government in 1978 had the following five broad

objectives: (i) to develop a strong Indian sector with the public sector playing a leading role; (ii)

to channel the activities of the foreign firms in accordance with the national priorities and

objectives; (iii) to deepen the production base of the domestic industry by ensuring that the

production of drugs took place from as basic a stage as possible; (iv) to encourage research and

development and improve the technological sinews of the industry; and (v) to provide drugs to

consumers at reasonable prices.

2) Post-Liberalisation:

As an integral part of economic reforms, the industrial, trade and technology policy

framework that had evolved from 1950s to late 1980s was considerably changed in the 1990s.

The New Industrial Policy (NIP) announced on 24th July 1991 and subsequent amendments

brought far reaching changes in the policy regime evolved thus far. The liberalisation of the

economy in 1991 had a major impact on the two vital policies (Drug Policy and Price Controls)

related to the pharmaceutical industry which are discussed below.

a) Drug policy

In September 1994, government announced a revision of the Drug Policy, 1986 making

major modifications. The modifications included: abolishing licensing policy for all bulk drugs

except those reserved exclusively for the public sector units and other using new technologies,


removing limitations on the use of imported bulk drugs, allowing foreign holdings up to 51

percent, and automatic approval for foreign technology agreements in the case of almost all

drugs. Later on, the pharmaceutical industry was included in the list for automatic approval up to

74 per cent in March 2000 and to 100 per cent in December 2001.

b) Price Controls

Another aspect of the reforms has been substantial dilution of the price controls. The

Drug Policy, 1994 liberalized the criteria for selecting drugs for price controls. Inline with the

changes in drug policy a new DPCO was notified in January 1995 bringing down the number of

drugs under the ambit of price controls to 74 from 166 (as was under DPCO, 1987). These 74

drugs accounted for only about 40 percent of the total market thus setting the bulk of the

pharmaceuticals market out of price controls. The exemption period for new drugs, produced

through indigenous R&D was also increased from 5 years to 10 years. Although, the piecemeal

reforms have been criticized for slow industrial progress gradual liberalization of the policy

regime from overbearing governmental control to subtle emergence of ‘open market’ principles

gave time and opportunity to firms and the local administration to adapt to the changing

scenarios. The policy regime adopted for the pharmaceutical industry in India thus changed from

one in which the industry was subjected to government controls in the 1970s to one that was

almost completely guided by market forces two decades later. This changed scenario can be best

understood by looking at the sharply declining number of bulk drugs under price control since

1970, the year in which the first DPCO was introduced in the country.

INDUSTRY STRUCTURE:

The Pharmaceutical industry in India is fragmented with over 3,000 small/medium sized

generic pharmaceutical manufacturers. It has over 20,000 units out of which 300 units are in the

organized sector; while others exist in the small scale/unorganized sector. The leading 250

pharmaceutical companies control 70% of the market with market leader holding nearly 7% of

the market share. There are also 5 Central Public Sector Units that manufacture drugs. These

companies are:


Indian Drugs & Pharmaceuticals

Hindustan Antibiotics Ltd.

Bengal Chemical and Pharmaceuticals Ltd.

Bengal Immunity Ltd.

Smith Stanistreet Pharmaceuticals Ltd.

The Indian pharmaceutical industry consists of manufacturers of bulk drugs and

formulations. Bulk drugs include the active pharmaceutical ingredients (APIs) which are used

for the manufacture of formulations. According to estimates, the proportion of formulations and

bulk drugs is in the order of 75:25. There are over 60,000 formulations manufactured in India in

more than 60 therapeutic segments. More than 85% of the formulations produced in the country

are sold in the domestic market. India is largely self-sufficient in case of formulations, though

some life saving, new-generation-technology-barrier formulations continue to be imported.

The Indian pharmaceutical industry has the highest number of plants approved by the US

Food and Drug Administration outside the US. It also has the large number of Drug Master Files

(DMFs) filed which gives it access to the high growth generic bulk drugs market. The industry

now produces bulk drugs belonging to all major therapeutic groups requiring complicated

manufacturing processes and has also developed “good manufacturing practices” (GMP)

compliant facilities for the production of different dosage forms. Setting up a plant is 40%

cheaper in India compared to developed countries and the cost of bulk drug production is 60-70

percent less. The strength of the industry is in developing cost effective technologies in the

shortest possible time for drug intermediates and bulk activities without compromising on

quality. In accordance with WTO stipulations, India grants product patent recognition to all New

Chemical Entities.

INDUSTRY SEGMENTATION:

Indian pharmaceutical industry can be widely classified into bulk drugs, formulations and

contract research. Bulk drugs are the Indian name for Active Pharmaceuticals Ingredients (API).

Formulations cover both branded products and generics. Indian pharmaceutical sector is self


sufficient in meeting domestic demand and exports successfully to various markets globally. The

existence of process patents in India till January 2005 fuelled the growth of domestic

pharmaceutical companies and developed them in areas like organic synthesis and process

engineering, as a result of which, Indian pharmaceuticals sector is able to meet almost 95 percent

of the country’s pharmaceutical needs. India is globally recognized as a low cost, high quality

bulk drugs and formulations manufacturer and supplier. Contract Research, a nascent industry in

India has witnessed commendable growth in the last few years. As per Yes Bank /OPPI report

(2007-08), formulation segment (including domestic formulation and formulation exports)

constituted 72%of the total pharmaceutical industry (in terms of sales) while bulk drugs and

contract research constituted 25% and 3% of pharmaceutical industry respectively.

Fig: Segment‐wise sales


Bulk drugs

Bulk drug industry is the backbone of the Indian pharmaceutical industry. Growth of

Indian bulk drug industry in the last five decades has been impressive and highest among

developing countries. From a mere processing industry, Indian bulk drug industry has evolved

into sophisticated industry today, meeting global standards in production, technology and quality

control. Today, India stands among the top five producers of bulk drugs in the world. The market

is fragmented with far too many players. About 300 organized companies are involved in the

production of bulk drugs in India. Over 70 percent of India’s bulk drug production is exported to

more than 50 countries and the balance is sold locally to other formulators. Indian bulk drug

industry is mainly concentrated in the following regional belts - Mumbai to Ankleshwar,

Hyderabad to Madras and Chandigarh. Around, 18000 bulk drug manufacturers exist in India.

Some major producers of bulk drugs in Indian pharmaceutical industry are Ranbaxy

Laboratories, Sun Pharma, Cadila, Wockhardt, Aurobindo Pharma, Cipla, Dr. Reddy’s

Laboratories, Orchid Pharmaceuticals & Chemicals, Nicholas Piramal, Lupin, Aristo

Pharmaceuticals, etc. Most are involved in bulk as well as formulations while a few are solely

into bulk drugs.

India is the world’s fifth largest producer of bulk drugs. The market size is expected to

grow at higher percentages in future years with more and more international companies

depending on India to meet their bulk-drug supply needs. Moreover, India is way ahead of

competitors in the total number of Drug Master File (DMF) filings. Of the overall DMF filings to

US FDA, the portion of filings by Indian players has jumped from around 14% in 2000 to 46%

of total filings in 2008( January-June) This growth in proportion speaks volumes about the

quality standards followed in Indian manufacturing facilities.


Fig: Increasing share of Indian companies in DMF filings (US FDA)

(SOURCE: CRISINFAC, YES BANK/ OPPI)

The growing number of DMF filings signifies the increase in number of contracts that

Indian players have garnered. While India has recorded 1671 DMF filings, China shows a tally

of 520, the second largest number of DMF filings after India. In 2008 (January-June), India’s

DMF filings were around 3.5 times that of China -187 from India vis-à-vis 51 from China.

The bulk drug segment is a low-margin and volume-driven business. The thrust is on

manufacturing. In manufacturing operation, efficiency through better process skills to reduce

both manufacturing time and cost is critical. Low cost manufacturing is a distinct advantage

gained by Indian companies over a period of time with a steep learning curve. Bulk Drugs

exports have grown significantly in the past on account of growth in generic industry, increasing

share of Indian companies in DMF filings and contract manufacturing opportunity.

As already explained, India has carved a niche for itself by being one of the largest bulk

drug suppliers. India offers a number of distinctive advantages in the pharmaceutical industry, as

illustrated in the figure below:


Fig: Advantage India-API

(SOURCE: CRISINFAC, YES BANK/ OPPI)

India has many local manufacturing equipment manufacturers. These equipments are of

high quality and low cost, thus reducing the cost of capital. According to industry estimates,

Indian companies are able to reduce the upfront capital cost of setting up a project by as much as

25-50%due to locally manufactured equipment and high quality technology/engineering skills.

Competition in the India’s domestic formulation market has made it inevitable for API suppliers

to continuously develop alternative production methods to improve yield or reduce costs. This

ensures that India has a significant cost advantage due to process engineering.

Apart from availability of a high number of skilled chemists, India also offers scientists

with vast experience and unmatched skills. The scientific staff in India though equivalent or

better qualified are also available at a fraction of the cost. This makes Indian research firms more

competitive than many international firms while being cost competitive. Labor costs are also low

in India, being almost 1/7th of that in many developed countries and offer an obvious cost

advantage.


Formulations

Formulations are broadly categorized into patented drugs and generic drugs. A patented

drug is an innovative formulation that is patented for a period of time (usually 20 years) from

the date of its approval. A generic drug is a copy of an expired patented drug that is similar in

dosage, safety, strength, method of consumption, performance and intended use.

Formulation Industry can be subdivided into two segments:

a) Domestic Formulation Industry

b) Indian Formulation Exports

a) Domestic Formulation Industry

Between 2002 and 2007, the domestic formulation industry grew at a CAGR of 14%

from around USD4.3 billion in 2002 to USD 8.4 billion in 2007. Demand in India is growing

markedly due to rising population, increasing per capita income, increasing access to medicine,

especially in the rural areas and an increasing population of over sixty years of age.

Fig: Growth in domestic formulation industry (OPPI, ORGIMS)

(SOURCE: CRISINFAC, YES BANK/ OPPI


b) Indian formulation exports

Indian formulation exports grew at a CAGR of 23.2% touching around USD 4 billion in

2007-08. The growth has been spurred mainly due to the focus on regulated markets by most

Indian companies, thereby increasing revenues.

Fig: Indian Formulation Exports

Contract research and manufacturing

Increasing costs of R&D, coupled with low productivity and poor bottom lines, have

forced major pharmaceutical companies worldwide to outsource part of their research and

manufacturing activities to low-cost countries, thereby saving costs and time in the process. The

global pharmaceutical outsourcing market was worth USD57.2 billion in 2007. It is expected to

grow at a CAGR of 10% to reach USD76 billion by 2010. Global market for Contract Research

and Manufacturing Services (CRAMS) in 2007 is estimated to be USD55.48 billion. Out of the

total global CRAMS market, contract research was USD16.58 billion, growing at a CAGR of

13.8% and contract manufacturing was USD38.89 billion accounting for the major share

(approximately 68%) of the total global pharmaceutical outsourcing market.

India, with more than 80 US FDA-approved manufacturing facilities, is one of the most

preferred locations for outsourcing manufacturing services in India by the multinationals and


global pharmaceutical companies. The Indian pharmaceutical outsourcing market was valued at

USD1.27m in 2007 and is expected to reach USD3.33 billion by 2010, growing at a CAGR of

37.6%. The Indian CRAMS market stood at USD1.21 billion in 2007, and is estimated to reach

USD3.16 billion by 2010.

India holds the lion's share of the world's contract research business as activity in the

pharmaceutical market continues to explode in this region. Over 15 prominent contract research

organisations (CROs) are now operating in India attracted by her ability to offer efficient R&D

on a low-cost basis. Thirty five per cent of business is in the field of new drug discovery and the

rest 65 per cent of business is in the clinical trials arena. India offers a huge cost advantage in the

clinical trials domain compared to Western countries. The cost of hiring a chemist in India is

one-fifth of the cost of hiring a chemist in the West.

CRITICAL SUCCESS FACTORS:

The rules of pharmaceutical business are changing. Indian pharmaceutical companies can

no longer get away with plundering intellectual properties of multinational companies.

Pharmaceutical business has become a new ballgame altogether after the introduction of product

patents in January 2005.

New product development

Pre 2005: New product development efforts of Indian pharmaceutical companies in process

patents era were limited to reverse engineering molecules discovered by other companies.

Thanks to absence of product patents, Indian companies did not have to go through long winded

drug development process. Nor did Indian companies have to expend any effort on research

focus. Indian companies simply zeroed in on blockbuster drugs and tried to come up with an

alternative process as fast as they could. The focus of the Indian companies was to launch a copy

of a blockbuster drug ahead of their rivals in India and abroad.


Key areas to focus on R&D for Indian companies:

1. Potential product identification

a) Complex API

b) Complex finished product

c) Commercial potential of products

d) Out-licensing opportunity to MNCs

2. Novel Drug Delivery System (NDDS)

3. New Drug Development

Post 2005: A large number of drugs are going “off patent” in the next few years. According to

IMH Health, more than $60 billion worth of drugs are going “off patent” by 2011. Thus, Indian

companies will not be short of new products for at least another two years. In the long run,

however Indian companies may find it hard to make money from drugs coming off patent.

Already competition in generic market is intense and likely to increase further in the future.

Hence, new molecules rather than generics will drive revenues and profits in the product patents

area. Indian companies need to discover new drugs either through their own efforts or research

alliances. Perhaps licensing deals with multinationals could also provide Indian companies

access to new drugs. Focus on basic research will come with its own issues. Indian companies

will have to acquire the skills of identifying research areas that offer excellent revenue and profit

potential. This will entail a closer tracking of disease profiles and related therapies as well as

keeping a close tab on the research programmes of rivals. Besides, Indian companies will have

to pay more attention to economics of drug development process. A product patent is granted for

a period of 20 years

Therapeutic coverage

Pre-2005: In the absence of product patents, Indian pharmaceutical companies did not feel the

need to focus on specific therapeutic areas. Most Indian pharmaceutical companies eschewed

narrow focus and tried to cover as many therapeutic areas as possible. Now the product


portfolio of many Indian companies has considerable breadth and depth. Given the price

controls in the market, diversification worked to the advantage of companies in the domestic

markets. In the export markets, a wider product portfolio gave companies the option of picking

and choosing from an array of opportunities.

Post 2005: Opinion is divided over the therapeutic strategy that Indian companies should

pursue in product patent era. Some companies believe that focus on select therapeutic segment

will fetch them greater dividends in terms of new chemical entities and market share. Other

companies believe such a strategy is risky given the size of Indian companies and that a big

setback in research could sink the company. Instead such companies are pursuing a de-risking

strategy of building a wide product portfolio. In the domestic market, such a strategy will result

in economies of scale at production and marketing stage, putting the company in a better place

to weather competition from multinationals. In the export markets even after the introduction of

product patents, products under patent protection will comprise only 15 percent of the market.

So a vast chunk of the market will be still open for competition although margins will be wafer

thin.

Exports

Pre-2005: Most Indian companies focused on exports. Exports improve the valuation of

companies owing to higher margin in overseas markets. Indian companies built fortunes by

making cheaper versions of blockbuster drugs and selling them in domestic and export markets.

Indian companies built especially strong position in manufacture of bulk drugs. Out of the total

exports, formulations constituted 55 percent and bulk drugs constituted 45 percent. Success in

export market allowed some Indian companies to build a strong position in the domestic market

organically and through acquisitions of brands and companies.


Post 2005: Exports has continued to be a priority for Indian companies. Major blockbuster

drugs will come off patent in the near future, creating a big generic opportunity for Indian

companies. Also, a growing demand for anti-AIDS drugs in Africa will keep Indian companies

busy. Exports have and will continue to provide Indian companies with the strength to

withstand the onslaught of multinationals in the domestic market.

Low cost production through scale

Pre-2005: Indian pharmaceutical companies have mastered the science of producing drugs

cheaply. Thanks to benign patents regime, Indian companies have developed a high level of

chemical synthesis skills. The absence of development costs together with efficient production

has enabled Indian companies to establish a solid position in bulk drug manufacturing. But scale

did not receive as much importance as it should have, because the cost of Indian pharmaceutical

companies was already low owing to aforesaid reasons. Many Indian companies did not find the

return on investment of world class plants compelling enough.

Post 2005: By 2011, drugs worth $60 billion will come off patent, presenting a huge generic

opportunity to Indian companies. But the competition in the generic market will be brutal,

resulting in thin margins. The cost of production will hold the key to success in the generic

market. The production cost in turn depends on scale. Indian pharmaceutical companies need to

build global scale to stand a chance in the generics market.

PHARMACEUTICAL REGULATORY BODIES IN INDIA:

1) National Pharmaceutical Pricing Authority (NPPA)-

NPPA is an organization of the Government of India which was established, to fix/

revise the prices of controlled bulk drugs and formulations and to enforce prices and

availability of the medicines in the country, under the Drugs (Prices Control) Order,

1995.


The organization is also entrusted with the task of recovering amounts overcharged by

manufacturers for the controlled drugs from the consumers.

It also monitors the prices of decontrolled drugs in order to keep them at reasonable

levels.

2) Central Drugs Standard and Control Organization (CDSCO) -

CDSCO lays down standards and regulatory measures of drugs, cosmetics, diagnostics

and devices in the country. It regulates clinical trials and market authorization of new drugs. It

also publishes the Indian Pharmacopeia. The main functions of the Central Drug Standard

Control Organization (CDSCO) include control of the quality of drugs imported into the country,

co-ordination of the activities of the State/UT drug control authorities, approval of new drugs

proposed to be imported or manufactured in the country, laying down of regulatory measures and

standards of drugs and acting as the Central Licensing Approving Authority in respect of whole

human blood, blood products, large volume parenterals , sera and vaccines. The CDSCO

functions from 4 zonal offices, 3 sub-zonal offices besides 7 port offices. The four Central Drug

Laboratories carry out tests of samples of specific classes of drugs.

3) Department of Chemicals & Petrochemicals (DCP)

DCP is responsible for the policy, planning, development, and regulation of the chemical,

petrochemical, and pharmaceutical industries in India. This department aims:

To provide impartial and prompt services to the public in matters relating to chemical,

pharmaceutical and petrochemical industries;

To take steps to speedily redressal of grievances received;

To formulate policies and initiate consultations with Industry associations and to

amend them whenever required.


INTRODUCTION:

1) Porters 5 force analysis of industry


A) THREAT TO ENTRY (ENTRY BARRIER)

In pharma industry there are various stumbling blocks to enter the market. Since the

industry is one of the very high profile industry and a very profitable one also. Industry being

profitable then the entry barriers should be low but the nature of industry, the products and its

relationship with the external environment makes it difficult for the firm to enter into

pharmaceutical industry. For pharma industry some of the barriers are

Government policies and FDA regulations

Government policies regarding the infrastructure required and the licensing procedure to

produce drugs pose initial barriers. Also with the new patent law commencing from 2005, it

would become difficult to enter the industry, as till now in India the patent was only process

patent and not product patent therefore any body could obtain a license and manufacture the

products, but after 2005 it would become necessary to own molecules of its own and formulate

drugs on the same.

FDA is an international body, which looks after all the functioning of the firm of pharma

industry. According to FDA any new firm entering the industry should not only have complete

infrastructure facilities but it should also have required manpower and certain SOP mentioned by

FDA are needed to be followed, which now include setting up R&D facility compulsorily for all

firms.

Cost disadvantages independent of economies of scales

Since the government policy and FDA regulations are stricter and the patent law has

made major barriers to entry. Cost disadvantages would be in the form of product technology. As

discussed earlier till now in India it was the process patentised but now any molecule discovered

by a particular firm would be the sole applicant of the formulation of that molecule or final

product along with the technology to manufacture the product.


Capital requirements

Pharma industry is highly capital-intensive industry. The nature of huge investments in

setting up manufacturing facilities and R&D facilities is a discouraging factor for the new

entrant. In case of pharma industry, it has been made mandatory for the firms to invest at least

4% of the equity capital in to R&D.

B) RIVALRY AMONG EXISTING FIRMS

Though there is high competition within the firms of pharma industry but other factor

such as its relationship with Healthcare Industry makes competition and rivalry a backseat. The

market share of top five-pharma company is

1. Ranbaxy Lab 10.7%

2. Dr. Reddy Lab 8%

3. Cipla 7%

4. Glaxo Smithkline Pharma 5.4%

5. Sun Pharma 3.75%

Also the growth of industry is very high and hence market share becomes a latent factor

in terms of rivalry. The special case of this industry is that this industry follows not only concept

but is more inclined towards societal marketing.

The fixed or storage costs are high in case of pharma industry and hence firms in this

industry take various measures like sometimes outsourcing for improving upon storage costs.

Many times firms have to collaborate with each other for certain productions and operations of

certain nature.

Products in this case are very important factor for competition. Standardization of any

sort of product by any firm can lead to monopoly too. The price though can become a major tool

for competition, but the social environment does not allow this strategy to gain impact.

Distribution of the all firms is almost same; hence there is no difference here.


C). BARGAINING POWER OF THE BUYERS

The importance of the product is much more higher to the buyer in terms of total cost.

The bargaining power of the buyer in this industry is almost nil as compared to other industry.

For the final consumers, the products are life saving drugs and buyers are ready to pay any

amount to buy the product so the bargaining power of buyers at the time of requirement is low.

D). BARGAINING POWER OF THE SUPPLIER

Suppliers are abundant in this industry hence the bargaining power of suppliers is much

higher. Switching costs are very low, but the substitutability of the product is nil. The products

are bought by the buyer in bulk and hence the supplier is keen to have a long-term relationship

with the buyer, hence for the supplier buyer is very important link to maintain him in the

industry.

E). THREAT OF SUBSTITUTE

In Pharma industry, there is threat of substitutes since the industry produces life saving

drugs. The substitutes of these products are:

Ayurveda

Unani

Homeopathy

Acupressure

Acupuncture

Conclusion

This model gives a fair idea about the industry in which a company operates and the

various external forces that influence it. However, it must be noted that any industry is not static

in nature. It’s dynamic and over a period of time the model, which have used to analyse the

pharmaceutical industry may itself evolve.


Going forward, we foresee increasing competition in the industry but the form of

competition will be different. It will be between large players (with economies of scale) and it

may be possible that some kind of oligopoly or cartels come into play. This is owing to the fact

that the industry will move towards consolidation. The larger players in the industry will survive

with their proprietary products and strong franchisee.

In the Indian context, companies like Cipla, Ranbaxy and Glaxo are likely to be key

players. Smaller fringe players, who have no differentiating strengths, are likely to either be

acquired or cease to exist.

The barriers to entry will increase going forward. The change in the patent regime has

made sure that new proprietary products come up making imitation difficult. The players with

huge capacity will be able to influence substantial power on the fringe players by their

aggressive pricing thereby creating hindrance for the smaller players. Economies of scale will

play an important part too. Besides government will have a bigger role to play.


2) PEST analysis

Technological advancements, tighter regulatory-compliance overheads, rafts of patent

expiries and volatile investor confidence have made the modern pharmaceutical industry an

increasingly tough and competitive environment. Below is an analysis of the structure of the

pharmaceutical industry using the PEST (political, economic, social and technological) model.

To understand the implications of the environment on any industry it is imperative to

study the four cardinal influencers on the industry namely Political, Economic, Social and

Technological factors. It is rather unfortunate that in India these factors have a rather

disproportionate influence on the functioning of a commercial organization. From the days of

independence the business environment has been overly regulated by a handful of bureaucrats,

middlemen, businessmen and politicians. Its only a decade since the country has seen an

emergence of a political thought that encourages free enterprise. A welcome change indeed!

A) POLITICAL FACTORS

Today there is political uncertainty in the air. A combination of diverse political thought

have got together to cobble together a rag-tag coalition, that is riddle with ideological

contradictions. Therefore, any consistent political or economic policy can not be

expected. This muddies the investment field.

The Minister in charge of the industry has been threatening to impose even more

stringent Price Control on the industry than before. This is throwing many an investment

plan into the doldrums.

DPCO which is the bible for the industry has in effect worked contrary to the stated

objectives. DPCO nullifies the market forces from encouraging competitive pricing of

goods dictated by the market. Now the pricing is determined by the Government based on

the approved costs irrespective of the real costs.


Effective January, 2005 the country goes in for the IPR (Intellectual Property Rights)

regime, popularly known as the Patent Act. This Act will impact the Pharmaceutical

Industry the most. Thus far an Indian company could escape paying a patent fee to the

inventor of a drug by manufacturing it using a different chemical route. Indian

companies exploited this law and used the reverse-engineering route to invent a lot of

alternate manufacturing methods. A lot of money was saved this way. This also

encouraged competing company to market their versions of the same drug. That meant

that the impurities and trace elements found in different brands of the same substance

were different both in qualification as well as in quantum. Therefore different brands of

the same medicine were truly different. Here Branding actually meant quality and a

purer brand actually had purer active ingredient and lesser or less toxic impurities.

Product patent regime will eliminate all this. Now, a patented drug would be

manufactured using the same chemical route and would be manufactured by the inventor

or his licentiates using the chemicals with same specifications. Therefore, all the brands

of the same active ingredient would not have any difference in purity and impurities. The

different brands would have to compete on the basis of non input-related innovations

such as packaging, color, flavors, Excipients etc. This is the biggest change the

environment is going to impose on the industry. The marketing effort would be now

focused on logistics, communications, and economy of operation, extra-ingredient

innovations and of course pricing.

In Pharma industry there is a huge PSU segment which is chronically sick and highly

inefficient. The Government puts the surpluses generated by efficient units into the price

equalization account of inefficient units thereby unduly subsidizing them. On a long term

basis this has made practically everybody inefficient.

Effective the January, 2005 the Government has shifted from charging the Excise Duty

on the cost of manufacturing to the MRP thereby making the finished products more


costly. Just for a few extra bucks the current government has made many a life saving

drugs unaffordable to the poor.

The Government provides extra drawbacks to some units located in specified area,

providing them with subsidies that are unfair to the rest of the industry, bringing in a

skewed development of the industry. As a result Parma units have come up at place

unsuitable for a best cost manufacturing activity.

B) ECONOMIC FACTORS

India spends a very small proportion of its GDP on healthcare (A mere 1%). This has

stunted the demand and therefore the growth of the industry.

Per capita income of an average Indian is low (Rs. 12,890), therefore, spending on the

healthcare takes a low priority. An Indian would visit a doctor only when there is an

emergency. This has led to a mushrooming of unqualified doctors and spread of non-

standardized medication.

The incidence of Taxes is very high. There is Excise Duty ( State & Central), Custom

Duty, Service Tax, Profession Tax, License Fees, Royalty, Pollution Clearance Tax,

Hazardous substance (Storage & Handling) license, income tax, Stamp Duty and a host

of other levies and charges to be paid. On an average it amounts to no less than 40-45%

of the costs.

The number of Registered Medical practitioners is low. As a result the reach of

Pharmaceuticals is affected adversely.

There are only 50, 00,000 Medical shops. Again this affects adversely the distribution of

medicines and also adds to the distribution costs.


India is a high interest rate regime. Therefore the cost of funds is double that in America.

This adds to the cost of goods.

Adequate storage and transportation facilities for special drugs are lacking. A study had

indicated that nearly 60% of the Retail Chemists do not have adequate refrigeration

facilities and store drugs under sub-optimal conditions. This affects the quality of the

drugs administered and of course adds to the costs.

India has poor roads and rail network. Therefore, the transportation time is higher. This

calls for higher inventory carrying costs and longer delivery time. All this adds to the

invisible costs. Its only during the last couple of years that good quality highways have

been constructed.

C) SOCIO-CULTURAL FACTORS

Poverty and associated malnutrition dramatically exacerbate the incidence of Malaria and TB,

preventable diseases that continue to play havoc in India decades after they were eradicated in

other countries.

Poor Sanitation and polluted water sources prematurely end the life of about 1 million children

under the age of five every year.

In India people prefer using household treatments handed down for generations for common

ailments.

The use of magic/tantrics/ozhas/hakims is prevalent in India.

Increasing pollution is adding to the healthcare problem.

Smoking, gutka, drinking and poor oral hygiene is adding to the healthcare problem.

Large joint families transmit communicable diseases amongst the members.


Cattle-rearing encourage diseases communicated by animals.

Early child bearing affects the health standards of women and children.

Ignorance of inoculation and vaccination has prevented the eradication of diseases like polio,

chicken-pox, small-pox, mumps and measles.

People don’t go in for vaccination due superstitious beliefs and any sort of ailment is considered

as a curse from God for sins committed.

D) TECHNOLOGICAL FACTORS

Advanced automated machines have increased the output and reduced the cost.

Computerization has increased the efficiency of the Pharma Industry.

Newer medication, molecules and active ingredients are being discovered. As of January

2005, the Government of India has more than 10,000 substances for patenting.

Ayurveda is a well recognized science and it is providing the industry with a cutting

edge.

Advances in Bio-technology, Stem-cell research have given India a step forward.

Humano-Insulin, Hepatitis B vaccines, AIDS drugs and many such molecules have given

the industry a pioneering status.

Newer drug delivery systems are the innovations of the day.

The huge unemployment in India prevents industries from going fully automatic as the

Government as well as the Labor Unions voice complains against such establishments.


3) SWOT analysis The Indian pharmaceutical industry is one of the fast growing sectors of the Indian

economy and has made rapid strides over the years. From being an import dependent industry in

the 1950s, the industry has achieved self-sufficiency and gained global recognition as a producer

of low cost high quality bulk drugs and formulations. Leading Indian companies have developed

infrastructure in over 60 countries including developed markets like US and Europe. In the

recent past, several pharmaceutical companies have demonstrated that they possess the ability to

engage in commercially viable research and development activities and become significant

players in the international market. SWOT Analysis, is a strategic planning tool used to evaluate

the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business

venture. It involves specifying the objective of the business venture or project and identifying the

internal and external factors that are favorable and unfavorable to achieving that objective.

A) STRENGTHS

Indian with a population of over a billion is a largely untapped market. In fact the

penetration of modern medicine is less than 30% in India.

The growth of middle class in the country has resulted in fast changing lifestyles in urban

and to some extent rural centers. This opens a huge market for lifestyle drugs, which has

a very low contribution in the Indian markets.

Indian manufacturers are one of the lowest cost producers of drugs in the world. With a

scalable labor force, Indian manufactures can produce drugs at 40% to 50% of the cost to

the rest of the world. In some cases, this cost is as low as 90%.

Indian Pharmaceutical industry posse’s excellent chemistry and process reengineering

skills. This adds to the competitive advantage of the Indian companies. The strength in

chemistry skill helps Indian companies to develop processes, which are cost effective.

Indian pharmaceutical industry is highly developed and the most modern amongst the

developing world.


The pharmaceutical industry has a favourable balance of payment and the quality of our

products, are of international standards.

There is flexibility for the industry to move from one drug to another.

Strong distribution network of industry. Stronger presence in the foreign markets.

Low manufacturing costs as compared to global norms.

Mature players in the industry have elaborate domestic marketing setups supplied by an

efficient distribution network.

Street smarts in branded generics market, global perspective.

Good blend of eastern and western styles of management.

Superb chemists proven by strong branded generic market share in India by Indian

workforce.

High volume large-scale businesses, experience of running multiple, large, high volume

manufacturing plants and managing 1000 sales people.

Many leading companies already “Globalising” on many levels.

Strong presence in a country with a large growth potential over the next twenty-five

years, based on population and current economic and potential situation.

The new patent product regime will bring with it new innovative drugs. This will increase

the profitability of MNC Pharma companies and will force domestic Pharma companies

to focus more on R&D. This migration could result in consolidation as well. The

migration into a product patent based regime is likely to transform industry fortunes in

the long term.

B) WEAKNESSES

The NPPA (National Pharma Pricing Authority), which is the authority to decide the

various pricing parameters, sets prices of different drugs, which leads to lower

profitability for the companies. The companies, which are lowest cost producers, are at

advantage while those who cannot produce have either to stop production or bear losses.

In India Pharmaceutical sector has been marred by lack of product patent, which prevents

global Pharma companies to introduce new drugs in the country and discourages


innovation and drug discovery. But this has provided an upper hand to the Indian Pharma

companies.

Indian majors are relying on exports for growth. To put things in to perspective, India

accounts for almost 16% of the world population while the total size of industry is just

1% of the global Pharma industry.

Due to very low barriers to entry, Indian Pharma industry is highly fragmented with

about 300 large manufacturing units and about 18,000 small units spread across the

country. This makes Indian Pharma market increasingly competitive. Indian Pharma

market is one of the least penetrated in the world. However, growth has been slow to

come by. The industry witnesses price competition, which reduces the growth of the

industry in value term.

While India accounts roughly 1/6th of the world’s population, it accounts only 1.6% of the

world’s value of pharmaceutical consumption. Only 30% of the population has access to

modern medicines.

R&D efforts to improve product efficacy is a continuous activity and is extremely

expensive and time consuming.

The industry is played by drug policy, price controls special restrictions on licensing etc.

It is passionately hoped that controls would be eased shortly.

The industry is characterized by low margins.

The buzzword in the pharmaceutical industry is R & D. With the signing of the GATT

agreement it is imperative for the research for discovery and development of new drug

molecule. Unfortunately, R & D is a major drawback of the Indian pharma industry.

Negotiable R & D activity.

Most of the manufacturing facilities are not eligible for exports to the developed world.

“Made in India” label is a handicap on the global markets.

C) OPPORTUNITIES

The new patent product regime will bring with it new innovative drugs. This will increase

the profitability of MNC Pharma companies and will force domestic Pharma companies

to focus more on R&D. This migration could result in consolidation as well. The


migration into a product patent based regime is likely to transform industry fortunes in

the long term.

Opening up of health insurance sector and the expected growth in per capita income are

key growth drivers from a long-term perspective. This leads to the expansion of

healthcare industry of which Pharma industry is an integral part.

Being the lowest cost producer combined with FDA approved plants, Indian companies

can become a global outsourcing hub for Pharmaceutical products.

Large number of drugs going off-patent in Europe and in the US between 2005 to 2009

offers a big opportunity for the Indian companies to capture this market. Since generic

drugs are commodities by nature, Indian producers have the competitive advantage, as

they are the lowest cost producers of drugs in the world.

Pharmaceuticals and bulk drugs are identified as thrust areas for exports by the

government of India.

With economic development, it is presumed that in the next few decades almost 90% of

the population would have access to modern medicine. Thus the growth potentials are

immense.

Number of manufacturing units approved by Food and Drug Administration (FDA), USA

is growing and providing vast scope for future growth.

Concentrate on R & D and technical base to create a competitive edge.

Create synergies through joining hands with other operators in the industry. Go for

backward and forward integration to utilize the resources in better manner.

The latest trend in the industry seems to be towards a greater backward integration by

manufacturing bulk intermediates. This is a plus point to the Indian industry since the

intermediates do not come under GATT agreement. This is one virgin area, which has not

yet been tapped.

Large and growing domestic markets at least 80% of products are expected to be off

patent products.

There are tremendous scopes to develop and market “New Drug Delivery System”.


Excellent opportunities in untapped niche markets.

Vast potential of the OTC market.

A 2500 crores generics market expected to grow up to 4500 crores by 2500.

D) THREATS

Threats from other low cost countries like China and Israel exist. However, on the quality

front, India is better placed relative to China. So, differentiation in the contract

manufacturing side may wane.

The short-term threat for the Pharma industry is the uncertainty regarding the

implementation of VAT. Though this is likely to have a negative impact in the short-

term, the implications over the long-term are positive for the industry.

There are certain concerns over the patent regime regarding its current structure. It

might be possible that the new government may change certain provisions of the patent

act formulated by the preceding government.

Increase in over the counter medicines also create problem for medicines because people

will buy it directly from market

Export of bulk drugs is vulnerable to various changes in the international market.

GATT agreement would after the pharmaceutical scenario drastically by 2005 AD. Most

of the Indian companies do not have a research base. Such companies will be severely

affected in the post GATT era.

Small-scale sector will be severally affected in the times to come. They will be forced to

close their shops or act as manufacturing base for the bigger Indian companies or MNCs.

Small and medium formulation companies to face stiff competition in the generic drugs

market leading to squeeze on their market share and profit.

Erosion of image in the domestic market due to lack of R & D.

Increased competition from china especially in the bulk drug sector.


INTRODUCTION:

‘OTC Drugs’ means drugs legally allowed to be sold ‘Over The Counter’, i.e. without the

prescription of a Registered Medical Practitioner. In India, though the phrase has no legal

recognition, all the drugs that are not included in the list of ‘prescription only drugs’ are

considered as non-prescription drugs (or OTC drugs).

Prescription-only drugs are those medicines that are listed in Schedules H and X

appended to the Drug and Cosmetics Act & its Rules. Drugs listed in Schedule G (mostly

antihistamines) do not need prescription to purchase but require the following mandatory text on

the label: “Caution: It is dangerous to take this preparation except under medical supervision”.

Drugs falling in these 3 schedules are currently not advertised to the public under a voluntary

commitment by the pharmaceutical industry.

Currently, non drug-licensed stores (e.g. non-chemists) can sell a few medicines

classified as ‘Household Remedies’ listed in Schedule K of the DCA&R in villages whose

population is below 1 000.

OTC proprietary drugs registered as ‘Ayurvedic Medicines’ (= traditional Indian

medicines containing natural / herbal ingredients) are also regulated by the DCA and DCR.

However, as they do not require a drug licence they can be sold by non-chemists. Some of the

top OTC brands in India (e.g. Vicks VapoRub, Amrutanjan Balm, Zandu Balm, Iodex , Moov

Pain Cream, Itch Guard Cream, Eno Fruit Salt, Vicks Cough Drops, Halls Lozenges, etc.), are

registered as ‘Ayurvedic Medicines’ because of their plant-based natural active ingredients.

There are no price controls on ‘Ayurvedic Medicines’.

Considering the above framework, key categories with OTC potential in India are:

Vitamins and minerals

Cough and cold

Gastrointestinals

Analgesics

Dermatologicals

Herbal / Ayurvedic Medicines.


Labeling requirements

There are no separate labeling requirements for OTC drugs. Under the Packaging

Commodities Act, most packaged consumer products including drugs are required to have the

Maximum Retail Price (MRP) printed on the label. The selling of any product at a price higher

than the MRP is not permitted.

Advertising requirements

The Drug & Magic Remedies (Objectionable Advertisement) Act mentions a list of

ailments for which no advertising is permitted. It also prohibits misleading advertisements

which, directly or indirectly, give false impressions regarding the true character of the drug,

make false claims, or are otherwise false or misleading in any particular respect. The DCGI’s

office -in collaboration with the Organisation of Pharmaceutical Producers of India (OPPI) -

has released a Voluntary Code on OTC Advertising which is being followed by all OPPI member

companies. There is also an OPPI Code of Pharmaceutical Marketing Practices, January 20071,

based on the IFPMA code.

Currently, there is no specific law which prohibits the advertising of prescription drugs

although industry practice is not to advertise prescription-only drugs. The DCGI’s office is

considering coming out with a notification prohibiting the advertising of any drug which legally

requires a doctor’s prescription for its supply.

The following OTC medicines advertising can be seen on TV in India:

Digestives

Antacids

Antiflatulents

Cold rubs and analgesic balms/creams

Vitamins/tonics/health supplements (especially herbals and Ayurvedic-registered)

Medicated skin treatment


Analgesic /cold tablets

Antiseptic creams/liquids

Glucose powders

Cough liquids

Throat lozenges

Medicated dressings (band-aids)

Baby gripe water.

World Scenario of OTC market:

At a global level pharma giants are leveraging the power of OTC to face the challenges

they face today .Globalization, shrinking new product pipeline, increasing cost of new drug

discovery, shrinking PLC of existing products, ever increasing demand by managed healthcare

organisations, public and government to cut down the prices of patent protected drugs, stringent

safety rules of FDA and entry of new players in the market are putting tremendous pressure on

all pharma companies especially the giants. Pfizer Inc’s, world’s largest drug maker, recent

decision to cut US sales force by about 20% clearly express the pressure such giants face.

OTC products are an essential component of any health care system. According to a one-

year survey in the United States, six of the ten most frequently used drugs, including the top four,

were OTCs.41 In another report, 60 percent of medicines purchased by consumers were OTCs.42

In fact, OTC products account for the majority of all medications used in most countries. There

were almost 16,800 OTC drugs (the total number of medicines was 22,000) available on Health

Canada’s list of drugs approved for human use in the year 2000.27 According to the Consumer

Healthcare Products Association, there were more than 100,000 OTC products (approximately

1,000 active ingredients) available in the United States as of 2001.43 The number of OTC

medicines available in the United States is much higher than any other nation. Consequently,

North America is the leading OTC market in the world; accounting for 31 percent of global sales

of OTC products in 1995. Western Europe ranked second (26 percent), followed by Japan (16

percent).44


In dollar value, OTC sales comprise from 10 to 30 percent of total medication sales in

various countries (circa 1996), for example, 26 percent in Switzerland; 24 percent in the USA;

20 percent in Britain; 18 percent in Germany; 15 percent in Japan; and 11 percent in France.45

Reasons for this include differences in health care funding, cultural health beliefs, and the range

of OTC drugs available on the market of each nation. In recent years, OTC spending has been

increasing in many countries, except in Japan where people are more likely to use formal

medical care rather than self-care.45 In the United States, retail sales of OTC products (excluding

Wal-Mart) in 2001 were $17.1 billion, up 2.4 percent over 2000 ($16.7 billion).46 Canadians

spent $3.3 billion on the OTC market in 2001 (20 percent of all drug expenditures) according to

a report released by the Canadian Institute for Health Information.27 In general, OTC drugs cost

about $100 per person per year. The OTC expenditure in 2001 increased 3 percent over the

previous year and has risen by 73.6 percent (from $1.9 billion to $3.3 billion) since 1995.27

US OTC Pharmaceuticals market

Approval of over-the-counter status for a drug requires an assessment by the Food and

Drug Administration (FDA) that the drug is safe and effective. Under current regulations, a new

drug can be exempted from prescription-only status by FDA approval of a new-drug application

supporting the use of the product on an over-the-counter basis. Alternatively, a drug can be

marketed over the counter if its ingredients are included in previously published regulations

defining the requirements for over-the-counter status and if the labeling of the product complies

with these regulations. The standards also apply to drugs that have already been approved for

prescription-only sale and that are being considered for a switch to over-thecounter status. The

Drug Price Competition and Patent Term Restoration Act of 1984 potentially provides three

additional years of marketing exclusivity for the makers of drugs switched from prescription to

over-the-counter status if the FDA has required additional clinical trials deemed essential to

evaluate the switch. If a prescription drug is approved for over-the-counter marketing, the drug

may still be available by prescription for certain indications or for use at doses not approved for

over-the-counter marketing. The Durham–Humphrey and Kefauver–Harris Amendments define

criteria to be used by the FDA in evaluating a new-drug application for a proposed over-the-


counter drug. The required demonstrations of safety and efficacy for an over-the-counter drug

include components distinct from those for prescription drugs.

United States OTC pharmaceutical market segmentation (in % share, by value)

Category % share

cough and cold preparation 22.30

Vitamin and Minerals 18.70

Analgesics 15.20

Medicated skin products 12.60

Traditional Medicines 5.30

Other 25.90

European OTC Pharmaceuticals market

The European OTC Pharmaceuticals market generated total revenues of $23.6 billion in

2006,this representing a CAGR of 2.5%for the five year period spanning 2002-06.In comparison,

the Global and Asia-Pacific OTC Pharmaceuticals markets grew with CAGR of 5.1% and 6.9 %

over the same period, to reach respective values of $88.7 billion and $39.1billion in 2006.

Europe OTC pharmaceutical market segmentation (in % share, by value)

Category % share



Analgesics 15.00



Other 24.60


The chart below shows the percentage of problems treated with non-prescription medications by

consumers in 10 nations. The percentages are the highest in the United States and in South

Africa. While in a developed country like the US many patients consider self-treatment with

over-the-counter medicines as a cost and time-saving alternative to doctor visits for common

ailments, a country like South Africa perhaps relies on self-medication more as a major

contributor to health maintenance because of lower levels of infrastructure and professional staff.

Percentage of common conditions treated with OTCs


Indian scenario:

The Indian market for over-the-counter medicines (OTCs) is worth about $940 million

and is growing 20 per cent a year, or double the rate for prescription medicines. The government

is keen to widen the availability of OTCs to outlets other than pharmacies, and the Organisation

of Pharmaceutical Producers of India (OPPI) has called for selling OTCs in post offices.

Developing an innovative new drug, from discovery to worldwide marketing, now

involves investments of around $1 billion, and the global industry's profitability is under constant

attack as costs continue to rise and prices come under pressure. Pharmaceutical production costs

are almost 50 per cent lower in India than in Western nations, while overall R&D costs are about

one-eighth and clinical trial expenses around one-tenth of Western levels. India's long-

established manufacturing base also offers a large, well-educated, English-speaking workforce

with 700,000 scientists and engineers graduating every year, including 122,000 chemists and

chemical engineers, with 1,500 PhDs. The industry provides the highest intellectual capital per

dollar worldwide, says OPPI.

The industry's exports were worth more than $3.75 billion in 2004-05 and they have

been growing at a compound annual rate of 22.7 per cent over the last few years, according to the

government's draft National Pharmaceuticals Policy for 2006, published in January 2006. The

Policy estimates that, by the year 2010, the industry has the potential to achieve $22.40 billion in

formulations, with bulk drug production going up to 5.60 billion from $1.79 billion. "India's rich

human capital is believed to be the strongest asset for this knowledge-led industry. Various

studies show that the scientific talent pool of 4 million Indians is the second-largest English-

speaking group worldwide, after USA." In India the prescription drugs are listed under Schedule

H. There are about 570 modules in this category that are stocked in a total of 5 to 8 lakh retail

chemists. Currently, non pharmacy stores can sell a few drugs on the schedule K of the Drugs &

Cosmetics Act in rural areas in villages, whose population is below 1,000,


Currently, aches/pains, cough, colds, hyperacidity, minor topical infections and

indigestion are major OTC categories. Emerging categories include cuts, wounds and burns,

muscle pains and sprains, diarrhoea and constipation. There are many products in the Rx sector

which could be revitalised through OTC switches. An analytical interpretation of various data

places the focus on vitamins, cough & cold, antacids, antipyretics and NSAIDs as opportunity

areas for switch in India.

However, the big issue in OTC marketing is not the switch climate as currently even

drugs which do not require a prescription are promoted via the doctor because:

Marketing through medical representatives is less expensive than mass media advertised

marketing. This makes that OTC medicines are higher priced than the equivalent

medicines promoted ethically.

Practically all Rx drugs can be purchased without a prescription.

Doctor influence is strong in patients’ purchase behaviour.

Distribution of allopathic OTC medicines is limited to drug licensed stores (mainly

Pharmacies).

Indian market faces the problem of ‘Deemed OTC market’ where in ethical drugs are also

sold without a prescription due to poor monitoring and control by FDA. Self medication

tendency is traditionally very high due to the high availability of traditional medicines, the

awareness and acceptance of which is very high among the public. The Indian OTC

pharmaceuticals market generated total revenues of $2.5 billion in 2006,this representing a

compound annual growth rate of 8.3%for the five year period spanning 2002- 2006.

In comparison ,the US and Chinese OTC pharmaceuticals markets grew with CAGRs of

4.3% and 7% over the same period ,to reach respective values of $21.2billion and $11.9billion in

2006. Traditional medicines proved the most lucrative for the Indian OTC pharmaceuticals

market in 2006, generating total revenues of $679.3 million. In comparison, sales of cough and

cold preparations generated revenues of $492.6 million in 2006.


Indian OTC pharmaceuticals market segmentation (In % share, by value)

Category % share



Analgesics 11.40



Other 27.30

Major Players of OTC Pharmaceutical Market in India 1) Proctor & Gamble:

P&G Hygiene and Health Care Limited is one of India's fastest growing Fast Moving

Consumer Goods Companies that has in its portfolio P&G's Billion dollar brands such as Vicks

& Whisper. With a turnover of Rs. 500+ crores, the Company has carved a reputation for

delivering high quality, value-added products to meet the needs of consumers.

P&G Hygiene and Health Care Limited takes pride in being voted India's Best Employer

2003 in a survey of 200 companies conducted by International HR Consultancy Hewitt

Associates in association with Business Today magazine. Earlier, the Company was voted India's

2nd Best Employer in previous editions of the survey in 2001 and 2002. Notably, there are over

200 Indian employees with P&G Subsidiaries abroad

Health Care

Vicks is India’s No.1 Cough & Cold Brand. It created the cold & cough Over-the-Counter

(OTC) category in India way back in 1952 and has led the category till date. Today it has

completed more than 50 years in India. Its current portfolio in India comprises Vicks

Action500+, Vicks VapoRub, Vicks Cough Drops, Vicks Formula 44 Cough Syrup and Vicks

Inhaler. It was rated as ‘India’s Most Trusted Brand’ by the ‘Advertising & Marketing’

Magazine and continues to be on top of the charts of Brand-Equity surveys till date. The Vicks


business in India is the biggest in the ASEAN-Australasia-India (AAI) region. Over the years,

Vicks has launched several heart-tugging advertising campaigns, some of which were – the

‘Happy Birthday Mummy’ and ‘Touch Therapy’ campaigns for Vicks VapoRub, the ‘Khich

Khich Dooor Karo’ ad for Vicks Cough Drops, the ‘Haan Bhai Haan’ ad for Vicks Action 500.

Following are the products of Proctor & Gamble:

• vicks Cough Dros

• Vicks formula 44 cough syrup

• Vicks Action 55+

• Vicks VapoRub

• Vicks Inhaler

2) Dr. Morepen Ltd.:

Keeping in line with Morepen's commitment to healthier future for all, The Company

has taken another step to come closer to the consumers with the launch of "Dr. Morepen", a

range of self health products. MLL has now entered the Rs.4500 crore of fast Moving Health

Goods (FMHG) market.

The category of self health has been identified after lot of research on modern behaviour

and preferences and Morepen sees a huge opportunity in this segment. Dr. Morepen is envisaged

as a forward looking, futuristic, lifestyle driven brand that empowers the modern customers to be

in charge of their own health and live life without any stops.

The brand is positioned on a simple philosophy of "health in your hands" A mantra for

contemporary life, full of hectic schedules, impending deadlines and tough competition. The

brand is being promoted by a new subsidary Dr. Morepen Ltd which has a vast sales &

marketing network that reaches to over a lakh of retail outlets already and the count is growing

everyday. With the launch of Dr. Morepen the distribution of Morepen has moved beyond

pharmacist, to super stores, retail outlets & neighbourhood shops.

The growing list of Dr. Morepen's Self Health FMHG product includes DAB (instant

antacid), SAT ISABGOL (Natural laxative), GOL GOLI (Hajma Candy), LEMOLATE (Cold


relief ), BURNOL ( for burns and cut) to take care of minor day to day problems, where as

product like C SIP (refreshing energy drink), Y SUGAR (Low cal sweetener), and 2 KOOL,

(Throat drops), and C-CANDY (Health candy) are life style companions that vitalizes and keep

people fit. Many more products are being launched soon, thus building up the FMHG category.

In a step that would expand Dr. Morepen's franchise into a retail format, Morepen acquired

LIFESPRING, the renowned chain of health & beauty stores. Lifespring is an internationally

styled, health and beauty chain of retail stores offering a range of nearly 15,000 domestic and

international branded products under one roof. Lifespring stores are located at high retail density

areas in New Delhi, catering to a wide ensemble of health and beauty customers. The Stores have

three sections - Personal Care and Beauty, OTC and Prescription Medicines and Optical Center.

Following are the products of Dr. Morepen Ltd:

• Dab Range

• Sat – Isabgol

• Gol Goli

• Y . Sugar

• C-Sip

• Solid Taste Solid Health

• C - Candy

• Burnol

• Lemolate

3) GlaxoSmithKline Pharmaceuticals Limited

GlaxoSmithKline Pharmaceuticals Limited (GSK) is India's leading research-based

Company committed to improving the quality of human life by enabling people to do more, feel

better and live longer.

The Company has a formidable presence in the domestic pharmaceuticals market with a

market share of above 5.9 per cent. GSK India markets a wide range of ethical formulations and

is the leader in therapeutic areas of respiratory, dermatology and vaccines, besides having a

significant presence in areas of gastroenterology, dietary supplements, gynecology, neurology,


cardiovascular and intensive care. GSK India is also the undisputed leader in the animal health

and fine chemicals businesses. Following are the products of GlaxoSmithKline Pharmaceuticals

limited:

• Crocin

• Crocin Pain Relief

• CrocinQuik

• Eno

• EnoTabs

• Iodex

• Iodex Power cream

4) Zydus Cadila

Zydus Cadila is an innovative global pharmaceutical company that discovers, develops,

manufactures and markets a broad range of healthcare products. The group’s operations range

from API to formulations, animal health products and cosmeceuticals. Headquartered in the city

of Ahmedabad in India, the group has global operations in four continents spread across USA,

Europe, Japan, Brazil, South Africa and 25 other emerging markets.In its mission to create

healthier communities globally, Zydus Cadila delivers wide ranging healthcare solutions and

value to its customers. With over 8,000 employees worldwide, a world-class research and

development centre dedicated to discovery research and eight state-of-the-art manufacturing

plants, the group is dedicated to improving people’s lives.

With three multi-therapy divisions and eight specialty divisions, Zydus Cadila is one of

the leading player in the Indian healthcare industry. It is the leading player in the cardiovascular,

gastrointestinal and women's healthcare segments. The group has strong presence in respiratory,

pain management, CNS, anti-infectives, oncology, neurosciences, dermatology and nephrology

segments. It has been able to maintain overall position and market share through faster growing

chronic / lifestyle segments. With several new product introductions and pillar brands such as

Aten, Ocid, Deriphyllin, Pantodac, Atorva, Nucoxia, Mifegest to name a few, Zydus Cadila is


considered a tour-de-force in therapy management and brand management. The group has

several in-licensing alliances with global multinationals such as Schering AG, Boehringer

Ingelheim, Viatris, etc. The portfolios of over 200 products are marketed by a specialised field

force of 3,000. With one of the strongest distribution channels in the industry, the group reaches

out to 1,00,000 chemists and serves 2,00,000 doctors including physicians, specialists and super

specialists.

Cadila Healthcare Limited’s parent organisation Zydus Group is one of the fastest

growing integrated healthcare companies with a turnover of Rs.13 billion. Zydus Group is the

5th largest player in the Indian domestic formulations market and also has a global presence.

Cadila Healthcare came into being under the aegis of the Zydus Group in 1995. Zydus today has

a leadership position in key segments like cardio vascular, gastro intestinal and women’s

healthcare and is amongst top three in the respiratory, pain management and anti-infective

segments. It also is a leading producer of niche and complex bulk drugs. Some of the well-

known brands of Zydus Cadila include Aten - the largest hypertensive brand in the country,

Ocid, Amlodac, Atorva, Pantodac, GRD, Penegra, Nucoxia, Ciprobid, Dexona, Primolut-N,

Dulcolax, Enew, Sugar Free, Diane 35, Mifigest among others. Following are the products of

Zydus Cadila:

a) Functional Health Foods and Dietary Products

In the health foods segment, the Consumer Division is a pioneer in offering healthier

dietary options to the consumers with the Sugar Free and Nutralite range of products.

• Sugar Free Gold is the largest selling aspartame based low calorie sugar

substitute in India with market share of over 75%.

• Sugar Free Natura is the latest new generation zero calorie sugar substitute

made from sucralose - a sugar derivative.

• Sugar Free D’lite is a low calorie healthy drink fortified with electrolytes,

vitamins and just 10 calories. It is available as powder soft drink as well as in a

ready to drink form.


• Nutralite is a healthy cholesterol-free butter substitute (table margarine), and is

the largest selling table margarine in India.

b) Speciality Skincare Products

In the skincare segment, the EverYuth brand enjoys the distinction of being a 'skincare

brand from a healthcare company'. Enriched with the power of natural ingredients, EverYuth has

a strong presence in advanced skincare segments like soap-free face washes, face masks, skin

exfoliators amongst others.

The EverYuth range also includes speciality dermatologically tested skincare solutions

for sun protection, pigmentation, acne and aging under the recently launched EverYuth Derma

Care range.

5) Novartis:

Novartis was created in 1996 through the merger of Ciba-Geigy and Sandoz. Novartis offers a

wide range of healthcare products through our Pharmaceuticals, Vaccines and Diagnostics,

Sandoz and Consumer Health Divisions. Nearly 100 000 people are working at Novartis to help

save lives and improve quality of life. Corporate citizenship at Novartis rests on four pillars:

patients, business conduct, people and communities, and environmental care. Operate in 140

countries, with our global headquarters in Basel, Switzerland. Novartis is one of the industry’s

biggest investors in research. Over-the-Counter (OTC) is a world leader in the research,

development, production and marketing of self-medication products that do not require

prescriptions. Our products are designed for the in-home treatment and prevention of medical

conditions and ailments as well as the enhancement of overall health and well-being. The main

OTC product categories are analgesics, cough, cold, allergy, gastrointestinal, skin care and

smoking-cessation treatments, as well as mineral supplements. Following are the products of the

Novartis:

• Benefiber powder

• Benefiber Caplets

• Benefiber plus calcium


• Excedrin®

• Extra Strength Excedrin®

• Excedrin® Tension Headache

• Excedrin® Migraine

• Excedrin® PM

• Gas-X® Products

• Children's Gas-X® Tongue Twisters™ Thin Strips™

• Baby Gas-X® Infant Drops

• Gas-X® Thin Strips™

• Softgels

• Chewables

• Bufferin

• Aspirin

• Calcium

• Sandoz

• Mineral supplement

• Excedrin

• Ex-Lax

• Overnight laxative

• Keri

• Lamisil AT

• Athlete’s foot and jock itch

6) Paras pharmaceuticals Pvt. Ltd.:

It is this incessant desire on part of people that has inspired Paras to dedicate itself to

issues that might appear to be trivial, but in reality, are quite significant in life. The range of such

issues is extensive. To identify them, one simply needs to be sensitive towards such problems.

And make the right solutions available. At Paras, the process behind finding every such solution

is backed by extensive consumer research, often carried out in an obsessive manner. While


identifying these real life problems and related behavioral patterns, the health aspects are also put

on high priority, so that the end result is not just a cosmetic one, but a truly healthy solution.

The result of these efforts is that today, Paras has a diverse range of innovative products,

many of which have created totally new categories by themselves. Not to mention, they have

been enormously successful. So much so, that today, Paras products have not only found a place

on the shelves of most households, but in the hearts of people as well. In short, the philosophy at

Paras, of providing solutions that care about you, is quite visible in its many works of art - the

many brands that truly enhance life.

New categories. New promises. What makes the customer believe in them all?

It’s the faith that comes with time, with a positive experience of using a product/service

offered by the company. By realizing that the promises were indeed fulfilled. But winning this

faith isn't easy. It comes after plenty of research and consumer study done on a large scale.

In case of Paras, the entire process of advanced research hinges on one focal point to

provide care, and not just cure. To serve people with value added products and not just cosmetic

makeovers. And to create new product categories. All this has made Paras a reliable and

favoured name amongst the masses.

For Paras, this long journey of many years has indeed been a glorious one. And with

more and more dreams taking shape at Paras, its glorious streak will continue to brighten up

many more lives. Following are the products of the Paras Pharmaceuticals Pvt.Ltd.:

• Afterbath FreshnessCream

• BoroSoft

• Krack

• D’cold

• D'Cold Cough Syrup

• ItchGuard

• Moov

• Moov spray

• RingGuard

• Stopache


7) Dabur India Limited:

Dabur India Limited is the fourth largest FMCG Company in India with interests in

Health care, Personal care and Food products. Building on a legacy of quality and experience for

over 100 years, today Dabur has a turnover of Rs.2233.72 crore with powerful brands like Dabur

Amla,Dabur,Chyawanprash,,Vatika, Hajmola & Real. Dabur India Limited is a leader in

manufacturing and marketing herbal, nature-based products. Today Dabur’s products are

available for people in more than 50 countries across the world, helping them move towards a

healthy, natural and holistic lifestyle. Our products are available in the markets of the Middle

East, South-East Asia, Africa, the European Union and America. Following are the products of

Dabur India Limited:

• Dabur Glucose-D

• Dabur Hajmola table

• Dabur Hingoli

• Pudin Hara

• Pudin Hara-G

• Dabur Shankha Pushpi

• Shilajit Gold

• Dabur Sarbyna Strong


Survey Analysis: Demographic Profile:

Gender

EXHIBIT I

Frequency Percent Male 148 49

Female 152 51

FIGURE I


Age

EXHIBIT II

Frequency Percent 19 years - 30 years 210 70 31 years - 40 years 34 11 41 years - 50 years 22 7 51 years - 60 years 26 9 Above 60 Years 8 3 Total 300 100

FIGURE II


Education

EXHIBIT III

Frequency Percent Undergraduate 90 30

Graduate 116 39

Post-Graduate 94 31

Total 300 100

FIGURE III


Monthly Income

EXHIBIT IV

Frequency Percent Rs. 0 - Rs. 10,000 118 39 Rs. 10,001 - Rs. 20,000 66 22 Rs. 20,001 - Rs. 30,000 52 17 Rs. 30,001 - Rs. 40,000 36 12 Above Rs. 40,000 28 9 Total 300 100

FIGURE IV


1) What do you do when you suffer from a minor disease?

EXHIBIT 1

Frequency Percent

Consult to the doctor 54 18 Consult a friend 12 4 Consult to a family member 52 17 Take a medicine on your own 118 40 Take a medicine which the storekeeper suggests 34 11 Do nothing 30 10 Total 300 100

FIGURE 1.1


FIGURE 1.2

Interpretation:

The above column graph indicates that 118 respondents take medicine on their own when

they suffer from minor disease while the number of respondents that consult to the doctor and the

number of respondents that take advice from family members are almost equal i.e 54 & 52

respondents respectively. 34 respondents take a medicine which the storekeeper suggests and 30

respondents do nothing when they suffer from minor disease. The option being least preferred by

the respondents when they suffer from minor disease is consulting a friend i.e 12 respondents.

The above pie chart implies that 40% respondents take medicine on their own which is the

most preffered option . while the number of respondents that consult to a doctor or a family

member when they suffer from minor disease is almost half the number of respondents that take

medicine on their own. On the other hand only 4% of the respondents consult to a friend.

Thus, from the above analysis one can easily conclude that people are well aware of the OTC

medicines and for the minor diseases they don’t prefer anybody’s advice.


2) Have you ever used any of the pharma OTC products?

EXHIBIT 2

Frequency Percent

Yes 266 89

No 34 11

Total 300 100

FIGURE 2.1


FIGURE 2.2

Interpretation:

According to the column chart given above, 266 out of 300 respondents have used any of the

Pharma OTC products atleast once in their life which is quite a significant number.

The pie chart also draws attention to the same thing that 89% of respondents have used

Pharma OTC products while 11% of respondents have never used any of the pharma OTC

products.


3) Which place you generally prefer to purchase pharma OTC products? EXHIBIT 3

Frequency Percent

Neighborhood chemist store 215 81 Drug retail chain 30 11 Supermarket/mall 14 5 Grocery stores 7 3 Total 266 100 Missing 34 Grand Total 300

FIGURE 3.1


FIGURE 3.2

Interpretation:

Many of the healthcare products are also available at grocery store and supermarket/mall but

still from the above graphs it can be said that majority of the respondents ie 215 respondent out

of 300 prefer to purchase from Neighborhood chemist store which accounts to about 81% of total

respondents while about only 7 out of 300 respondent which accounts to 3% of total respondents

prefer Grocery stores for purchasing OTC products. Moreover, respondents preferring Drug

retail chain and supermarket/mall are 11% and 5% respectively.

The above analysis indicates that people still prefer conventional chemist stores to purchase

medicines. However, with Supermarket/mall growth this percentage will fall down as the share

of supermarket will grow. At the same time, Drug retail chains like Apollo pharmacy are gaining

preference quickly.


4) What is your preferred time interval for buying OTC products?

EXHIBIT 4

Frequency Percent As and when needed 231 87 Every week 14 5 Every fortnight 6 2 Every month 15 6 Total 266 100 Missing 34 Grand Total 300

FIGURE 4.1


FIGURE 4.2

Interpretation:

The above column graph indicates that 231 respondents buy OTC products As and When

needed while the number of respondents that purchase OTC products on weekly basis, fortnight

basis and monthly basis are 14, 6, and 15 respectively.

It can be implied from the above pie chart that majority of the respondents i.e. 87% prefer

buying OTC products As and When needed. While only 2% of respondents prefer buying OTC

products on fortnight basis.

Thus, above analysis implies that people generally don’t prefer stocking OTC products at

home.


5) Which factors influence you while making the purchase decision regarding

particular brand of OTC product?

EXHIBIT 5

Frequency Percent Earlier prescription from doctors 142 52 Recommendation from a friend/relative 62 23

Advertisement of a product 20 7 Through product trial 50 18

Total 266 100 Missing 34 Grand Total 300

FIGURE 5.1


FIGURE 5.2

Interpretation:

From the above column graph 142 respondents uses earlier prescription from doctors as a

basis for making purchase decision regarding particular brand of OTC products. This is the most

influencing factor as 52% of respondents base their purchase decision on it. The second most

influencing factor is recommendation from a friend/ relative as 62 respondents i.e. 23% take it

into account while making purchase decision. 50 respondents i.e. 18% of respondents make

purchase decision through product trial.

Thus the conclusion is that in India people still consider doctors next to God.


6) Rank the following features of particular brand of OTC products in order

of your preference.

EXHIBIT 6

Rank 1 Rank 2 Rank 3 Rank 4 Rank 5

Efficacy 146 79 28 5 8

Brand Name 102 122 38 2 36

Packaging 2 15 109 88 50

Pricing 11 36 57 132 28

Promotional Offer 4 14 31 37 178

Descriptive Statistics

N Mean Std. Deviation Statistic Statistic Std. Error Statistic Efficacy 266 1.6842 .05829 .95062 Brand name 264 1.7727 .04399 .71476

Packaging 264 3.6402 .05405 .87816 Pricing 264 3.4924 .06119 .99425 Promotional offer 264 4.4053 .06091 .98974

Valid N 264


FIGURE 6.1

Interpretation:

The most frequency rank given to the below mention features of a particular brand of OTC

products by the respondents as seen in the column graph are as follows:

Efficacy – Rank 1

Brand Name – Rank 2

Packaging- Rank 3

Pricing – Rank 4

Promotional Offer – Rank 5


Efficacy

Frequency Percent

Rank 1 146 55 Rank 2 79 30 Rank 3 28 11 Rank 4 5 2 Rank 5 8 3 Total 266 100 Missing 34 Grand Total 300

FIGURE 6.2.1


Brand Name

Frequency Percent

Rank 1 102 39 Rank 2 122 46

Rank 3 38 14

Rank 4 2 1

Rank 5 0 0

Total 264 100

Missing 36 Grand Total 300

FIGURE 6.2.2


Packaging

Frequency Percent


FIGURE 6.2.3


Pricing

Frequency Percent


FIGURE 6.2.4


Promotional Offer

FIGURE 6.2.5

Frequency Percent

Rank 1 4 2 Rank 2 14 5

Rank 3 31 12 Rank 4 37 14

Rank 5 178 67 Total 264 100 Missing 36 Grand Total 300


Interpretation:

For efficacy 55% respondents have given rank 1 and only 2 %respondents have given rank 5.

For Brand Name 39% respondents have given rank 1 and o% respondents have given rank 5.

For packaging 1%respondents have given rank 1 and 19% respondents have given rank 5.

For Pricing 4% respondents have given rank 1 and 11% respondents have given rank 5.

For promotional offer 2% respondents have given rank 1 and 67% have given rank 5.

Thus, according to the respondents efficacy and brand name are the most important features

for selecting a particular brand of OTC products.


7) Which medium of communication is most appealing to you for

advertisement of OTC products?

EXHIBIT 7

Frequency Percent Newspaper 58 22 Magazines 16 6 Television 143 54 Internet 25 9 Billboard 5 2 Pamphlet 19 7 Total 266 100 Missing 34 Grand Total 300

FIGURE 7.1


FIGURE 7.2

Interpretation:

From the above graph it can be said that respondents’ most preferred medium among all

media is Television. 143 respondents preferred Television, followed by 58 respondents who

preferred Newspaper. Television is preferred by 54% of respondents while Newspaper is

preferred is by 22% of respondents.

Other mediums i.e. Magazines, Internet, Billboard and Pamphlet are preferred by 16, 25, 5

and 19 respectively. Thus, Pamphlets, Billboard & Magazines are found to be least appealing for

advertisement of OTC products i.e only 7%, 2% and 6% of respondents respectively.


8) Do you seek detail information from the chemist of brand of the OTC

products which you purchase? EXHIBIT 8

Frequency Percent

Yes 157 59 No 109 41 Total 266 100 Missing 34 Grand Total 300

FIGURE 8.1


FIGURE 8.2

Interpretation:

From the column chart itself it can be predicted that most of the respondents i.e 157 out of

300 seek detail information from the chemist about product use and other effects. Also the pie

chart indicates that 59% respondents seek detail information from chemist, while 41%

respondents say that they do not require detail information from the chemist.

Thus, Chemists play an important role in creating awareness among people regarding

various aspects of OTC medicines.


9) Do you perceive OTC products as safe to buy and use?

EXHIBIT 9

Frequency Percent Yes 167 63 No 99 37 Total 266 100 Missing 34 Grand Total 300

FIGURE 9.1


FIGURE 9.2

Interpretation:

From the column chart itself it can be ascertained that most of the respondents i.e 167 out of

300 perceive OTC products as safe to buy and use. Also the pie chart indicates that 63%

respondents perceive OTC products as safe to buy and use, while 37% respondents say that they

do not perceive OTC products as safe to buy and use.

Thus, people in India are still suspicious about the safety of using medicines without the

prescription of the doctor.


10) Are you aware of side effects of OTC products you take?

EXHIBIT 10


FIGURE 10.1


FIGURE 10.2

Interpretation:

The above column graph indicates that most of the respondents i.e 158 out of 300 are aware

of the side-effects of OTC products they take. Also the pie chart indicates that 59% respondents

are aware of side-effects of OTC products they take, while 41% respondents are unaware of side-

effects of OTC products they take.

Thus, it can be safely concluded that consiousness about health is increasing day by day

among the people.


11) Do you read the labeling information on an OTC products’ package

before using it?

EXHIBIT 11


FIGURE 11.1


FIGURE 11.2

Interpretation:

Almost all the repondents i.e 244 said that they read the labeling information on the OTCs’

product package before using it as seen from the column graph while only few respondents ie 22

said that they do not read the labeling information on the OTCs’product package before using it.

From the above pie chart it can be seen that 92% respondents read the labeling information

while 8% respondents do not read the labeling information.


If yes, when you look at the package including the front, back, and sides, what

information do you read?

EXHIBIT 11.1

Frequency

Percent

Direction for use 158 21

Active ingredients 122 17

Warnings 125 17

Possible Side effects 126 17

Price, manufacture date and expiry date 192 26

Other 12 2

FIGURE 11.1.1

FIGURE 11.2.1


Interpretation:

Those respondents who read the labeling information before using it were further asked to

tick the information that they read on the package. According to the above column chart, 192

respondents read the Price, manufacuture date and Expiry date while 158 repondents read the

directions for use. At the same time, number of respondents reading the active ingredients,

possible side effects, warnings are almost equal i.e 122, 126 and 125 respectively. only 12

respondents read other information on the package.

The above pie chart indicates that most of the respondents (26%) read the Price, maufacture

date and expiry date while only 2% respondents read the other information on the package.

The above analysis shows that people are less aware and least concern of the important

things while using medicines like active ingredients, warnings, and possible side effects. But

they are most concern about reading the price, manufacure date and expiry date on the drug

package.


12) How often do you follow directions given on OTC drug package?

EXHIBIT 12

Frequency Percent

Always 100 38

Most of the times 90 34 Sometimes 54 20 Rarely 19 7 Never 3 1 Total 266 100 Missing 34 Grand Total 300

FIGURE 12.1


FIGURE 12.2

Interpretation:

From the above column chart, it can be seen that almost 1/3rd repondents always follow the

directions given on OTC drug package. while 90 respondents follow the directions given on

drug package most of the times. Only 3 respondents never follow the directions on drug package.

From this sample, 38% reported that they always followed the directions on the OTC drug

package, while 34% said they follow the directions on the OTC drug package most of the times.

20% of respondents said they would sometimes follow these directions while 7% and 1% would

rarely or never follow the directions respectively.

Thus, most of the people know that medicines should always be used according to the

directions given.


13) Do point of sale display influence you while making a purchase decision

regarding OTC products? EXHIBIT 13

Frequency Percent Always 30 11 Most of the times 55 21 Sometimes 99 37 Never 82 31 Total 266 100 Missing 34 Grand Total 300

FIGURE 13.1


FIGURE 13.2

Interpretation:

The responses clearly signify that respondents sometimes or never get influenced by the

point of sale display while making the purchase decision regarding OTC products. 82

respondents never get influenced while 99 respondents sometimes get influenced by point of sale

display respectively. From the above Pie chart percentage of respondents getting influenced by

point of sale display always, most of the times, sometimes and never are 11%, 21%, 37% and

31% respectively.

Thus, people are conservative about the OTC products and they know that medicines should

not be taken just by seeing the display in the shop.


14) Do you visit Drug store with primary intension to purchase only OTC

products? EXHIBIT 14

Frequency Percent Yes 118 44

No 148 56 Total 266 100 Missing 34 Grand Total 300

FIGURE 14.1


FIGURE 14.2

Interpretation:

The above graph signifies that 118 respondents (44%) visit drug store with primary intention

to purchase only OTC products while 148 respondents (56%) visit drug store to purchase

Prescription medicines along with the OTC products.

Thus, tendency among people is more towards purchasing OTC products whenever they visit

drug store for some other purpose.But still clear distinction cannot be made as what is the

general tendency among people because even respondents visiting drug store with primary

intention to purchase OTC products is 44%.


15) How would you feel when your doctor inquires you about OTC

medicines taken before consulting him/her?

EXHIBIT 15

Frequency Percent He should do it routinely 121 45.5

It would be a good idea sometimes 56 21.1 I don't mind either ways 64 24.1 It would be better if he don't 18 6.8

I would rather be upset if he did 7 2.6 Total 266 100.0 Missing 34 Grand Total 300

FIGURE 15.1


FIGURE 15.2

Interpretation:

A total of 266 respondents responded about prior use of OTCs out of which 121 said that

doctor should do it routinely, 56 said that it would be a good idea sometimes, 64 said that I don’t

mind either ways, 18 said that It would be better if doctor don’t inquire and only 7 stated that

they would be upset if doctor inquire them.

Thus, 45% of respondents preferred Doctor doing inquiry while 24% respondents expressed

indifference to such inquiry which least proportion of respondents i.e only 3% respondents said

that they would be upset with doctors, inquiry.


16) Frequency of stocking common OTC medicines at home

EXHIBIT 16

Always Sometimes Seldom Never

Vitamins and minerals 76 80 39 71 Indigestion. Heart burn 60 84 48 74 Medicated skin care products 97 76 42 51

Cough remedies 114 90 38 24

Sore throat 78 74 54 60

Herbal remedies 55 82 52 77 Laxatives 19 55 71 121 Anti- Diarrhoeals 56 64 61 85 Hemorrhoids Products 12 26 41 187

Descriptive Statistics

N Mean Std. Deviation Statistic Statistic Std. Error Statistic Vitamin and Minerals 266 2.3947 .07122 1.16157

Indigestion/Heartburn 266 2.5113 .06888 1.12345

Medicated skin care products

266 2.1767 .06891 1.12383

Cough remedies 266 1.8947 .05896 .96163 Sore throat 266 2.3609 .06918 1.12829

Herbal remedies 266 2.5677 .06835 1.11471

Laxatives 266 3.1053 .05944 .96944

Anti-Diarrhoeals 266 2.6579 .06964 1.13581

Haemorrhoid product 266 3.5150 .05198 .84773

Valid N 266


FIGURE 16.1

Interpretation:

From the above Column graph following can be concluded about most preferred

frequency of stocking among respondents for major OTC categories:

• Vitamins and minerals are stocked sometimes

• Indigestion and heart burn medicines are stocked sometimes

• Medicated skin care products like Soframycin are always stocked

• Cough remedies are always stocked

• Sore throat medicines are also always stocked

• Herbal remedies are sometimes stocked

• Laxatives are never stocked

• Anti-Diarrheals are never stocked

• Hemorrhoid products are never stocked

Thus, it can be ascertained that Cough remedies, Sore throat medicines and

Medicated skin care products are more frequently stocked and used than Vitamins and

minerals, Indigestion and heart burn medicines and herbal medicines. And at the same time,

Anti-Diarrhoeals, Haemorrhoid products and Laxatives are least stocked and used than other

categories.


Vitamin and Minerals

EXHIBIT 16.1

Frequency Percent

Always 76 28

Sometimes 80 30 Seldom 39 15 Never 71 27 Total 266 100 Missing 34 Grand Total 300

FIGURE 16.2.1


Indigestion / Heartburn EXHIBIT 16.2

Frequency Percent

Always 60 22

Sometimes 84 32 Seldom 48 18 Never 74 28 Total 266 100 Missing 34 Grand Total 300

FIGURE 16.2.2


Medicated Skin Care Products EXHIBIT 16.3

Frequency Percent Always 97 36

Sometimes 76 29

Seldom 42 16

Never 51 19

Total 266 100


FIGURE 16.2.3


Cough Remedies EXHIBIT 16.4


Sometimes 90 34 Seldom 38 14

Never 24 9 Total 266 100


FIGURE 16.2.4


Sore Throat EXHIBIT 16.5


Sometimes 74 28 Seldom 54 20 Never 60 23 Total 266 100 Missing 34

Grand Total 300

FIGURE 16.2.5


Herbal Remedies EXHIBIT 16.6

Frequency Valid Percent Always 55 21

Sometimes 82 31

Seldom 52 19 Never 77 29 Total 266 100


FIGURE 16.2.6


Laxatives EXHIBIT 16.7

Frequency Percent Always 19 7 Sometimes 55 21 Seldom 71 27

Never 121 45 Total 266 100


FIGURE 16.2.7


Anti – Diarrheals

EXHIBIT 16.8

Frequency Percent Always 56 21 Sometimes 64 24 Seldom 61 23 Never 85 32 Total 266 100 Missing 34 Grand Total 300

FIGURE 16.2.8


Hemorrhoid Products

EXHIBIT 16.9


Sometimes 26 10

Seldom 41 15

Never 187 70

Total 266 100


FIGURE 16.2.9


17) Give the following ten statements score from 1 to 5 where 1 means you

strongly disagree and 5 means you strongly agree EXHIBIT 17

Strongly Disagree Disagree Neutral Agree Strongly

Agree

Statement 1 89 38 57 32 50

Statement 2 42 44 53 56 71

Statement 3 87 47 73 33 26

Statement 4 32 27 83 61 63

Statement 5 51 21 51 65 78

Statement 6 33 20 68 69 77

Statement 7 28 44 67 56 71

Statement 8 30 27 48 73 88

Statement 9 30 25 45 62 104

Statement 10 66 38 71 37 54

Descriptive Statistics N Mean Std. Deviation Statistic Statistic Std. Error Statistic

Statement 1 266 2.6842 .09222 1.50405 Statement 2 266 3.2632 .08700 1.41898 Statement 3 266 2.4887 .08100 1.32104 Statement 4 266 3.3609 .07841 1.27879 Statement 5 266 3.3684 .08960 1.46132 Statement 6 266 3.5150 .08064 1.31528 Statement 7 266 3.3684 .08077 1.31737 Statement 8 266 3.6090 .08194 1.33648 Statement 9 266 3.6955 .08374 1.36580 Statement10 266 2.9060 .08854 1.44412


FIGURE 17.1


I reach for OTC medicines at the first sign of illness EXHIBIT 17.1

Frequency Valid Percent Strongly disagree 89 34 Disagree 38 14 Neutral 57 21 Agree 32 12 Strongly agree 50 19 Total 266 100 Missing 34 Grand Total 300

FIGURE 17.2.1

Interpretation:

It can be seen from the above Pie-chart that 34% respondents have strongly Disagreed

with this statement while only 19% have strongly agreed with this statement. Thus, it shows that

people take OTC medicines only when the illness is severe.


I use OTC medicines only if the illness is quite severe EXHIBIT 17.2

Frequency Percent Strongly disagree 42 16 Disagree 44 16 Neutral 53 20 Agree 56 21 Strongly agree 71 27 Total 266 100 Missing 34 Grand Total 300

FIGURE 17.2.2

Interpretation:

In this statement, 27% respondents strongly agree with this statements and so it

reconfirms first statement that people use OTC medicines only if the illness is quite severe. Only

16% of sample strongly disagrees with this statement.


Non-prescription medicines are totally safe to use

EXHIBIT 17.3

Frequency Valid Percent

Strongly disagree 87 33 Disagree 47 18 Neutral 73 27 Agree 33 12 Strongly agree 26 10 Total 266 100 Missing 34 Grand Total 300

FIGURE 17.2.3

Interpretation: The above Pie chart indicates that 33% respondents strongly disagree with this statement

while only 10% respondents strongly agrees with this statement. This means that people are well

aware of the fact that no medicines are devoid of any side-effects and no medicine in the world is

good for our health.


Non-prescription medicines can have dangerous side-effects EXHIBIT 17.4


FIGURE 17.2.4

Interpretation: 31% respondents are neutral to this statement as seen in above pie while 23% and 24%

respondents agree and strongly agree respectively. The proportion of neutral respondents is high

because of the word ‘dangerous’. People know that Non-prescription medicines have side-effects

but they are not sure if they are having dangerous side-effects or not.


The effect of incorrect use of non-prescription medicines can be as serious as that of prescription medicines

EXHIBIT 17.5 Frequency Percent Strongly disagree 51 19 Disagree 21 8 Neutral 51 19 Agree 65 25 Strongly agree 78 29 Total 266 100 Missing 34 Grand Total 300

FIGURE 17.2.5

Interpretation: 29% respondents strongly agree with this statement and 25% respondents agree with this

statement. It means people believe that medicines should be used according to directions for use.


Non-prescription medicines can sometimes mask serious health problems EXHIBIT 17.6


FIGURE 17.2.6

Interpretation: The response for this statement is quite clear as 29% respondents strongly agree and 26%

respondents agree with this statements. Thus, people believe that use of Non-prescription

medicines can mask serious health problems.


Some non-prescription medicines interfere with the natural healing process of

the body EXHIBIT 17.7


FIGURE 17.2.7

Interpretation: Proportion of respondents agreeing with this statement is almost half of the total

respondents while ¼ of the respondents have expressed neutral opinion about the statement while

remaining ¼ of the respondents have disagreed with the statement.


With continual use, some non-prescription medicines lose their effectiveness

EXHIBIT 17.8


FIGURE 17.2.8

Interpretation:

It can be seen from the Pie-chart that 28% respondents agree and 33% strongly agree

with the statement. So it can be easily concluded that people believe that Non-prescription

medicines should not used frequently as they may lose their effectiveness and thereafter they will

not work at a same dose.


Some non-prescription medicines may cause dependency or addiction if taken

for a long period of time EXHIBIT 17.9


FIGURE 17.2.9

Interpretation: 39% respondents strongly agree to this statement as seen in above pie chart while 23%

respondents agree to this statements. People believe that Non-prescription medicines can also

cause addiction when used for a longer period of time but 17% respodents are not sure about this

statement.


Non-prescription medicines should be used frequently to relieve minor health

problems

EXHIBIT 17.10


FIGURE 17.2.10

Interpretation: From the above Pie-chart it can be concluded that 27% respondents are neutral to this

statement. Moreover, 25% respondents strongly disagree with this statement and 20%

respondents strongly agree with this statement. Thus, the response is quite ambigious and it

cannot be clearly stated as what is the opinion of the respondents.


18) What action would you take if an OTC medicine did not work within

reasonable period of time?

EXHIBIT 18

Frequency Percent Stop using the product and consult the doctor 198 74 Stop using the product and ask the retailer 31 12 Decrease the dose or stop the medication 23 9 Increase the dose or use product more often 12 4 Use for longer time 2 1 Total 266 100 Missing 34 Grand Total 300

FIGURE 18.1


FIGURE 18.2

Interpretation:

When asked what action they would take if an OTC medicine did not work within the

recommended period of time, 198 respondents reported that they would stop and consult the

Doctor. 31 respondents said that they would stop using the product and ask the retailer while 23

respondents said that they would decrease the dose or stop the medication. Moreover 12

respondents indicated that they would increase the dose or use the product more often while only

2 respondents said that they would use the product for a longer time.

Thus the most prominent response is to stop the medication and consult the doctor as chosen

by 74% of respondents while the least preferred action is to use the product for a longer time as

only 1% of respondents prefer that action.


19) Tick ( ) against the brand(s) which you have used for personal

consumption

COLD AND COUGH SEGMENT

TABLET

EXHIBIT 19.1.1

Frequency Percent

Lemolate 105 20

Dcold total 139 26

Crocin cold and flu 118 22 Vicks action 500 128 24

Okaset cold 14 3

Other tablet 27 5

FIGURE 19.1.1


FIGURE 19.2.1

Interpretation:

The analysis of the above data using column graph and pie chart indicates that Lemolate

is used by 105 respondents and Dcold Total is used by 139 respondents. Moreover, Crocin Cold

And Flu and Vicks Action 500 is used by 118 and 128 respondents respectively. 14 respondents

have used Okaset Cold while 27 respondents use other brands.

Thus, Dcold Total is a leading brand with majority of respondents i.e 26% have used it.

Even Vicks Action 500 is not far behind as 24% of respondents have used it. At the same time,

Okaset Cold is a new brand for the consumers and only 3% of respondents use it for personal

consumption.


SYRUP

EXHIBIT 19.1.2

Frequency percent Benadryl 135 40 Corex dx 79 23 Tossex 44 13 Brozedex 29 8 Phensedyl 31 9 Other Syrup 23 7

FIGURE 19.1.2


FIGURE 19.2.2

Interpretation:

The analysis of the above data using column graph and pie chart states that Benadryl is

used by 135 respondents while Corex Dx is used by 79 respondents. Moreover, Tossex and

Brozedex is used by 44 and 29 respondents respectively. 31 respondents have used Phensedyl

while 23 respondents use other brands.

Thus, Benadryl is a leading brand with majority of respondents i.e 40% have used it.

Corex Dx is very far behind as only 23% of respondents have used it. At the same time,

Phensedyl is a not so famous brand among the consumers as only 8% of respondents use it for

personal consumption.


LOZENGES

EXHIBIT 19.1.3

Frequency Percent Alex 21 4

Vicks 215 40

Strepsils 149 28 Halls 117 22 Koflet 29 5 Other Lozenges 3 1

FIGURE 19.1.3


FIGURE 19.2.3

Interpretation:

The above column graph and pie-chart states that Vicks and Strepsils are most

frequently used by the respondents as Vicks and Strepsils is used by 215 and 149 respondents

respectively and both together is favored by 68% of respondents. The least used lozenges is Alex

which is used by only 21 i.e 4% of respondents.


ANALGESIC (PAIN KILLER)

EXHIBIT 19.2

Frequency Percent Voveran 19 3 Metacin 166 26 Disprin 139 21 Calpol 55 8 Combiflame 161 25

Saridon 64 10

Dolo 23 4 Other Analgesic 20 3

FIGURE 19.1.4


FIGURE 19.2.4

Interpretation:

From the above analysis it can be concluded that Metacin, Disprin and Combiflam are far

ahead of all the other analgesic or pain killer brands as 166, 139, and 161 respondents

respectively have used it. This three brands in total accounts for 72% of respondents. The least

used brands are Voveran and Dolo as only 19 (3%) and 23(4%) of respondents have used it

personally.


MULTI VITAMIN

EXHIBIT 19.3

Frequency Percent

Revital 101 50

Riconia 19 10

Beplex 25 12

Becosules 28 14

Polybion 21 10 Other Multi vitamin 7 4

FIGURE 19.1.5


FIGURE 19.2.5

Interpretation:

It is clearly seen from the column chart that Revital is far far ahead of all the

other vitamin brands. 101 respondents have used Revital personally. This accounts to about 50%

of total respondents using any multi-vitamin brand. This is due to the intense advertisement by

Revital. Responses for other brands like Riconia, Beplex, Becosules and Polybion are almost

similar i.e 19,25,28 and 21 respectively. In total, these four brands along with others account for

remaining 50% of respondents.


ANTACID

EXHIBIT 19.4

Frequency Percent

Digene 96 28

Gelucil 58 17

Rantac 98 28

Zintac 43 12

Ranitin 47 14

Other Antacid 5 1

FIGURE 19.1.6


FIGURE 19.2.6

Interpretation:

Both Digene and Rantac are leading in the market with 96 and 98 respondents

respectively using them as seen from the Column graph. The third most frequently used brand is

Gelucil. It is but obvious due to popularity of brand as a result of advertisement. While Zintac

and Ranitin is used by 43 and 47 respondents respectively. Only 5 respondents uses other brand

of antacids.

Also the Pie-chart indicates that there is fierce competition between Digene and Rantac

with 28 % respondents each using it. At the same time Zintac is new in the market with 12% of

respondents using it.


BALM AND OINMENT

EXHIBIT 19.5

Frequency Percent Zandu 87 13 Tiger 87 13 Moov 125 18 Iodex 133 20 Amrutanjan 45 7 Vicks 189 28 Other Balm and Oinment 8.0 1

FIGURE 19.1.7


FIGURE 19.2.7

Interpretation:

It can be concluded from the above column graph that 189 respondents have personally

used Vicks. The second most frequently used balm and ointment is Iodex which is used by 133

respondents. Not so far behind is the Moov which is used by 125 respondents. Both Zandu and

Tiger balm is used by 87 respondents each. The least used brand is the Amrutanjan which is used

by 45 respondents.8 respondents uses other balm and ointment.

As seen from the Pie-chart, the most frequently used brand that is Vicks is used by 28%

of respondents while the least used brand that is Amrutanjan is used by 7% of respondents.

Thus, Vicks has benefited from the intense advetising since many years


Hypothesis Analysis:

1) ANOVA

Gender

Ho: Population means for following the directions given on the package are not

significantly different across gender groups

H1: Population means for following the directions given on the package are significantly

different across gender groups

Level of significance (α) = 0.05

Follow direction on package

N Mean Std.

Deviation Std. Error

95% Confidence Interval for Mean

Minimum MaximumLower Bound Upper Bound Male 134 2.0149 .97321 .08407 1.8486 2.1812 1.00 5.00

Female 132 1.9924 .99997 .08704 1.8202 2.1646 1.00 5.00

Total 266 2.0038 .98478 .06038 1.8849 2.1226 1.00 5.00


EXHIBIT 1.1

ANOVA


Sum of Squares Df Mean Square F Significance

Between Groups .034 1 .034 .035 .853

Within Groups 256.963 264 .973

Total 256.996 265

Interpretation:

The significance level as indicated in the table is 0.853 which is much higher than

predetermined level of significance (α) (0.853 > 0.5). This implies that there are no significant

differences in population means for following the directions given on the package across gender

groups. So, null hypothesis Ho is accepted and Alternate hypothesis H1 is rejected. Hence, it can

be concluded that males follow the directions given on the package to the same extent as

females.


Age


significantly different across age groups


different across age groups

Descriptives


N Mean Std.

Deviation Std.

Error


Minimum MaximumLower Bound

Upper Bound

19 years - 30 years

186 1.8226 .86726 .06359 1.6971 1.9480 1.00 5.00

31 years - 40 years

30 2.5000 1.00858 .18414 2.1234 2.8766 1.00 4.00

41 years - 50 years

19 2.5789 1.26121 .28934 1.9711 3.1868 1.00 5.00

51 years - 60 years

24 2.1667 1.16718 .23825 1.6738 2.6595 1.00 4.00

Above 60 Years 7 2.5714 .97590 .36886 1.6689 3.4740 2.00 4.00

Total 266 2.0038 .98478 .06038 1.8849 2.1226 1.00 5.00


EXHIBIT 1.2

ANOVAFollow direction on package

Sum of Squares df Mean Square F Sig.

Between Groups 22.672 4 5.668 6.313 .000 Within Groups 234.324 261 .898

Total 256.996 265

Follow direction on package Scheffe

(I) Age (J) Age

Mean Difference (I-

J) Std. Error Sig.

95% Confidence Interval

Lower Bound Upper Bound19 years - 30 years 31 years - 40 years -.67742* .18642 .012 -1.2558 -.0991

41 years - 50 years -.75637* .22821 .029 -1.4644 -.0484 51 years - 60 years -.34409 .20551 .592 -.9817 .2935 Above 60 Years -.74885 .36481 .380 -1.8806 .3829

31 years - 40 years 19 years - 30 years .67742* .18642 .012 .0991 1.2558 41 years - 50 years -.07895 .27781 .999 -.9408 .7829 51 years - 60 years .33333 .25949 .800 -.4717 1.1384 Above 60 Years -.07143 .39772 1.000 -1.3053 1.1625

41 years - 50 years 19 years - 30 years .75637* .22821 .029 .0484 1.4644 31 years - 40 years .07895 .27781 .999 -.7829 .9408 51 years - 60 years .41228 .29096 .734 -.4904 1.3150 Above 60 Years .00752 .41894 1.000 -1.2922 1.3072

51 years - 60 years 19 years - 30 years .34409 .20551 .592 -.2935 .9817 31 years - 40 years -.33333 .25949 .800 -1.1384 .4717 41 years - 50 years -.41228 .29096 .734 -1.3150 .4904 Above 60 Years -.40476 .40702 .911 -1.6675 .8580

*. The mean difference is significant at the 0.05 level.


Interpretation:

The ANOVA table reveals that significance level is much lower than alpha (α) (0 < 0.05).

This means that there are significant differences in population means for following the directions

given on the package across age groups. Hence, null hypothesis Ho is rejected and Alternate

hypothesis H1 is accepted. In order to examine where differences existed, the post-hoc Scheffe

Test is employed. First, for age level, there are significant differences between mean direction

follow for 19 years - 30 years against the group of 31 years - 40 years.

The difference was also significant between respondents who are between 41 years - 50

years and those who are between 19 years - 30 years. Moreover it can be concluded from the

descriptive table that respondents that are between 19 years – 30 years follow directions given on

package more often than other age groups. Respondents between 51 years – 60 years follow

directions given on package more often than other age groups except respondents falling in age

group of 19 years – 30 years.


Education


significantly different across education level groups


different across education level groups

Descriptives


N Mean Std.

Deviation Std.

Error


Minimum Maximum Lower Bound

Upper Bound

Undergraduate

78 2.2051 1.10910 .12558 1.9551 2.4552 1.00 5.00

Graduate 104 2.1827 .99283 .09736 1.9896 2.3758 1.00 5.00

Post-Graduate

84 1.5952 .69627 .07597 1.4441 1.7463 1.00 3.00

Total 266 2.0038 .98478 .06038 1.8849 2.1226 1.00 5.00

EXHIBIT 1.3 ANOVA

Follow direction on package Sum of

Squares df Mean Square F Sig. Between Groups 20.511 2 10.256 11.406 .000 Within Groups 236.485 263 .899

Total 256.996 265


Multiple ComparisonsFollow direction on package

Scheffe

(I) Education (J) Education

Mean Difference (I-

J) Std. Error Sig.

95% Confidence Interval

Lower Bound Upper BoundUndergraduate Graduate .02244 .14204 .988 -.3272 .3721

Post-Graduate .60989* .14911 .000 .2428 .9770 Graduate Undergraduate -.02244 .14204 .988 -.3721 .3272

Post-Graduate .58745* .13911 .000 .2450 .9299 Post-Graduate Undergraduate -.60989* .14911 .000 -.9770 -.2428

Graduate -.58745* .13911 .000 -.9299 -.2450 *. The mean difference is significant at the 0.05 level.

Interpretation:

The ANOVA table indicates that significance level is much lower than alpha (α) (0 <

0.05). This means that there are significant differences in population means for following the

directions given on the package across Education groups. Hence, null hypothesis Ho is rejected

and Alternate hypothesis H1 is accepted. The post-hoc Scheffe Test signifies that there are

significant differences between mean direction follow for Under-Graduates against the group

of Post- Graduates.

The difference was also significant between respondents who are between Graduates

and those who are between Post-Graduates. Moreover it seems from the descriptive table that

Post – Graduate respondents follow directions given on package more often than other education

groups.


Income


significantly different across income groups


different across income groups

Descriptives


N Mean Std.

Deviation Std.

Error


Minimum MaximumLower Bound

Upper Bound

Rs. 0 - Rs. 10,000 107 1.9907 1.12010 .10828 1.7760 2.2053 1.00 5.00 Rs. 10,001 - Rs. 20,000

55 1.9455 .70496 .09506 1.7549 2.1360 1.00 3.00

Rs. 20,001 - Rs. 30,000

46 1.8913 .87504 .12902 1.6314 2.1512 1.00 4.00

Rs. 30,001 - Rs. 40,000

33 2.0909 1.01130 .17604 1.7323 2.4495 1.00 4.00

Above Rs. 40,000 25 2.2800 1.06145 .21229 1.8419 2.7181 1.00 4.00 Total 266 2.0038 .98478 .06038 1.8849 2.1226 1.00 5.00

EXHIBIT 1.4 ANOVA

Follow direction on package Sum of Squares df Mean Square F Sig. Between Groups 2.945 4 .736 .756 .554 Within Groups 254.051 261 .973

Total 256.996 265


Multiple ComparisonsFollow direction on package

Scheffe

(I) Monthly income (J) Monthly income

Mean Difference

(I-J) Std.

Error Sig.

95% Confidence IntervalLower Bound

Upper Bound

Rs. 0 - Rs. 10,000 Rs. 10,001 - Rs. 20,000

.04520 .16369 .999 -.4626 .5530

Rs. 20,001 - Rs. 30,000

.09935 .17395 .988 -.4403 .6390

Rs. 30,001 - Rs. 40,000

-.10025 .19645 .992 -.7097 .5092

Above Rs. 40,000 -.28935 .21916 .783 -.9693 .3906 Rs. 10,001 - Rs. 20,000

Rs. 0 - Rs. 10,000 -.04520 .16369 .999 -.5530 .4626

Rs. 20,001 - Rs. 30,000

.05415 .19712 .999 -.5574 .6657

Rs. 30,001 - Rs. 40,000

-.14545 .21724 .978 -.8194 .5285

Above Rs. 40,000 -.33455 .23798 .740 -1.0728 .4038 Rs. 20,001 - Rs. 30,000

Rs. 0 - Rs. 10,000 -.09935 .17395 .988 -.6390 .4403

Rs. 10,001 - Rs. 20,000

-.05415 .19712 .999 -.6657 .5574

Rs. 30,001 - Rs. 40,000

-.19960 .22507 .940 -.8979 .4987

Above Rs. 40,000 -.38870 .24514 .643 -1.1492 .3718 Rs. 30,001 - Rs. 40,000

Rs. 0 - Rs. 10,000 .10025 .19645 .992 -.5092 .7097

Rs. 10,001 - Rs. 20,000

.14545 .21724 .978 -.5285 .8194

Rs. 20,001 - Rs. 30,000

.19960 .22507 .940 -.4987 .8979

Above Rs. 40,000 -.18909 .26159 .971 -1.0007 .6225 Above Rs. 40,000 Rs. 0 - Rs. 10,000 .28935 .21916 .783 -.3906 .9693

Rs. 10,001 - Rs. 20,000

.33455 .23798 .740 -.4038 1.0728

Rs. 20,001 - Rs. 30,000

.38870 .24514 .643 -.3718 1.1492

Rs. 30,001 - Rs. 40,000

.18909 .26159 .971 -.6225 1.0007


Interpretation:

The significance level as indicated in the table is 0.554 which is much than

predetermined level of significance (α) (0.554 > 0.5). This implies that there are no significant

differences in population means for following the directions given on the package across income

groups. So, null hypothesis Ho is accepted and Alternate hypothesis H1 is rejected. Hence, it can

be concluded that respondents falling in any of the income groups follow the directions given on

the package to the same extent.


2) CHI- SQUARE

Income and Doctors’ inquiry

H0: Income and feel about Doctors’ inquiry are independent to each other

H1: Income and feel about Doctors’ inquiry are dependent on each other

Degree of freedom= (row-1) (column-1) = (5-1) (5-1) = 16

Level of significance = 0.10

EXHIBIT 2.1

Feel when

doctor inquires you

Monthly income

Total Rs. 0 - Rs.

10,000 Rs. 10,001 -

Rs. 20,000

Rs. 20,001 - Rs.

30,000

Rs. 30,001 - Rs.

40,000

Above Rs. 40,000

He should do it routinely 52 24 22 16 7 121

It would be a good idea

sometimes 14 16 12 4 10 56

I don't mind either ways 31 13 6 8 6 64

It would be better if he

don't 5 2 6 3 2 18

I would rather be upset if he

did 5 0 0 2 0 7

Total 107 55 46 33 25 266


Row Column Observed Frequency

Expected Frequency Fo - Fe (Fo - Fe)^2 (Fo-Fe)^2/Fe

1 1 52 48.7 3.3 10.89 0.224

1 2 24 25 -1 1 0.040

1 3 22 20.9 1.1 1.21 0.058

1 4 16 15 1 1 0.067

1 5 7 11.4 -4.4 19.36 1.698

2 1 14 22.5 -8.5 72.25 3.211

2 2 16 11.6 4.4 19.36 1.669

2 3 12 9.7 2.3 5.29 0.545

2 4 4 6.9 -2.9 8.41 1.219

2 5 10 5.3 4.7 22.09 4.168

3 1 31 25.7 5.3 28.09 1.093

3 2 13 13.2 -0.2 0.04 0.003

3 3 6 11.1 -5.1 26.01 2.343

3 4 8 7.9 0.1 0.01 0.001

3 5 6 6 0 0 0.000

4 1 5 7.2 -2.2 4.84 0.672

4 2 2 3.7 -1.7 2.89 0.781

4 3 6 3.1 2.9 8.41 2.713

4 4 3 2.2 0.8 0.64 0.291

4 5 2 1.7 0.3 0.09 0.053

5 1 5 2.8 2.2 4.84 1.729

5 2 0 1.4 -1.4 1.96 1.400

5 3 0 1.2 -1.2 1.44 1.200

5 4 2 0.9 1.1 1.21 1.344

5 5 0 0.7 -0.7 0.49 0.700

27.222


FIGURE 2.1

χTabulated = 23.542

χCalculated = 27.222

Thus, Ho is rejected and H1 is accepted.

Interpretation:

The above analysis shows that H1 is accepted and Ho is rejected. So it can be concluded

that there is dependence between feel about Doctors’ inquiry and income.

The given conclusion is due to the fact that income of the people has the bearing on their

attitude towards the society. People with high income do not prefer being inquired by any person

may it be a Doctor. They feel that they have a higher status in the society than others and they

are not required to answer anybody’s questions. While the people with low income think

logically that it is better if Doctor inquires them as it would help the Doctor to diagnose more

accurately.


Age and Doctors’ inquiry

H0: Age and feel about Doctors’ inquiry are independent to each other

H1: Age and feel about Doctors’ inquiry are dependent on each other

Degree of freedom= (row-1) (column-1) = (5-1) (5-1) = 16

Level of significance = 0.10 EXHIBIT 2.2

Feel when

doctor inquires you

Age

Total 19 years - 30 years

31 years - 40 years

41 years - 50 years

51 years - 60 years

Above 60 Years

He should do it routinely

85 12 11 12 1 121

It would be a good idea sometimes

34 10 4 6 2 56

I don't mind either ways

48 8 4 4 0 64

It would be better if he don't

14 0 0 2 2 18

I would rather be upset if he did

5 0 0 0 2 7

Total 186 30 19 24 7 266


Row Column Observed Frequency

Expected Frequency Fo - Fe (Fo-Fe)^2 (Fo-

Fe)^2/Fe 1 1 85 84.6 0.4 0.16 0.002

1 2 12 13.6 -1.6 2.56 0.188

1 3 11 8.6 2.4 5.76 0.670

1 4 12 10.9 1.1 1.21 0.111

1 5 1 3.2 -2.2 4.84 1.513

2 1 34 39.2 -5.2 27.04 0.690

2 2 10 6.3 3.7 13.69 2.173

2 3 4 4 0 0 0.000

2 4 6 5.1 0.9 0.81 0.159

2 5 2 1.5 0.5 0.25 0.167

3 1 48 44.8 3.2 10.24 0.229

3 2 8 7.2 0.8 0.64 0.089

3 3 4 4.6 -0.6 0.36 0.078

3 4 4 5.8 -1.8 3.24 0.559

3 5 0 1.7 -1.7 2.89 1.700

4 1 14 12.6 1.4 1.96 0.156

4 2 0 2 -2 4 2.000

4 3 0 1.3 -1.3 1.69 1.300

4 4 2 1.6 0.4 0.16 0.100

4 5 2 0.5 1.5 2.25 4.500

5 1 5 4.9 0.1 0.01 0.002

5 2 0 0.8 -0.8 0.64 0.800

5 3 0 0.5 -0.5 0.25 0.500

5 4 0 0.6 -0.6 0.36 0.600

5 5 2 0.2 1.8 3.24 16.200

34.484


FIGURE 2.2

χTabulated = 23.542

χCalculated = 34.484

Thus, Ho is rejected and H1 is accepted.

Interpretation:

The above analysis shows that H1 is accepted and Ho is rejected. So it can be concluded

that there is dependence between feel about Doctors’ inquiry and age.

The given conclusion is due to the fact that people in different age groups have different

attitude towards the society. Most people in age group of 19 years- 30 years ie young generation

prefer being inquired by Doctor because they know the importance of Doctors’ inquiry about

prior OTC medication use. Still many people in age group of 19 years – 30 years do not mind

either ways whether Doctor inquires or do not inquires. While the people in the age group of

Above 60 years have narrow minded approach and they feel that why should I tell everything to

the Doctor? More than 50% of people in this age group feel that Doctors should not inquiry them

about prior OTC medicines usage.


3) Z-Test

Ho: p = 0.5 50% of people seek detail information from the chemist of brand of the OTC

products

H1: p > 0.5 Proportion of people seeking detail information from the chemist of brand of

the OTC products is greater than 50%

Level of Significance (α) = 0.05

Defining the probability of success

p1 = p/n = 157/266 = 0.5902 pHo = 0.5

q1 = q/n =109/266 = 0.4098 qHo = 0.5

Calculation of Standard Deviation

Standard deviation = σp = √pq/n

= √ (0.50X0.50)/266

= √ 0.00094

=0.0307


FIGURE 3.1

Calculation of z-statistics

Calculated Z statistics = (p1 – pHo) / σp1

= (0.5902 – 0.50) / 0.0307

= 2.9381

Z-Critical for 95% confidence level is 1.645 from the z table which is less than the calculated

value i.e. 2.9381

Therefore Ho rejected and H1 is accepted.

Interpretation:

Hence, Proportion of people seeking detail information from the chemist of brand of the

OTC products is greater than 50%. Thus, It can be safely concluded that in India, Chemist play a

major role in creating awareness about the medicines among the people.


4) Kruskal-Wallis Test

Between age and features of brand of OTC products

EXHIBIT 4.1

Age N Mean Rank Efficacy 19 years - 30 years 186 132.28

31 years - 40 years 30 159.13 41 years - 50 years 19 102.82 51 years - 60 years 24 148.04 Above 60 Years 7 89.57 Total 266

Brand name 19 years - 30 years 186 130.98 31 years - 40 years 28 116.36 41 years - 50 years 19 160.13 51 years - 60 years 24 123.50 Above 60 Years 7 193.21 Total 264

Packaging 19 years - 30 years 186 132.67 31 years - 40 years 28 126.68 41 years - 50 years 19 131.11 51 years - 60 years 24 146.71 Above 60 Years 7 106.36 Total 264

Pricing 19 years - 30 years 186 129.25 31 years - 40 years 28 114.88 41 years - 50 years 19 160.08 51 years - 60 years 24 161.04 Above 60 Years 7 116.71 Total 264

Promotional offer 19 years - 30 years 186 134.79 31 years - 40 years 28 135.89 41 years - 50 years 19 128.45 51 years - 60 years 24 105.92 Above 60 Years 7 160.14 Total 264


Test Statisticsa,b

Efficacy Brand name Packaging Pricing Promotional offer Chi-Square 11.818 10.197 2.057 9.245 5.955 df 4 4 4 4 4 Asymp. Sig. .019 .037 .725 .055 .202 a. Kruskal Wallis Test b. Grouping Variable: Age

EFFICACY Ho: There are no differences among the population groups so they have same mean

H1: There are differences among the population groups so they do not have same mean

Interpretation: As observed significance level is below 0.05, there is significant difference in importance

that respondents in the age groups give to the efficacy. Thus, Ho is rejected and H1 is accepted.

Moreover, analysis of the mean ranks shown in the above table indicates that people above 60

years give the maximum importance to efficacy among all the age groups.

BRAND NAME

Ho: There are no differences among the population groups so they have same mean



that respondents in the age groups give to the brand name. Thus, Ho is rejected and H1 is

accepted. Moreover, analysis of the mean ranks shown in the above table indicates that people in

31-40 years give the maximum importance to brand name among all the age groups.


PACKAGING Ho: There are no differences among the population groups so they have same mean


Interpretation: As observed significance level is above 0.05, there is no significant difference in

importance that respondents in the age groups give to the packaging. Thus, Ho is accepted and

H1 is rejected.

PRICING Ho: There are no differences among the population groups so they have same mean



importance that respondents in the age groups give to the pricing. Thus, Ho is accepted and H1 is

rejected.

PROMOTIONAL OFFER




importance that respondents in the age groups give to the promotional offer. Thus, Ho is

accepted and H1 is rejected.


Between Income and features of brand of OTC products

EXHIBIT 4.2

Monthly income N Mean Rank Efficacy Rs. 0 - Rs. 10,000 107 134.69

Rs. 10,001 - Rs. 20,000 55 122.05 Rs. 20,001 - Rs. 30,000 46 153.80 Rs. 30,001 - Rs. 40,000 33 125.30 Above Rs. 40,000 25 127.06 Total 266

Brand name Rs. 0 - Rs. 10,000 107 135.99 Rs. 10,001 - Rs. 20,000 55 128.59 Rs. 20,001 - Rs. 30,000 46 110.98 Rs. 30,001 - Rs. 40,000 33 135.14 Above Rs. 40,000 23 164.89 Total 264

Packaging Rs. 0 - Rs. 10,000 107 127.03 Rs. 10,001 - Rs. 20,000 55 126.22 Rs. 20,001 - Rs. 30,000 46 138.70 Rs. 30,001 - Rs. 40,000 33 123.35 Above Rs. 40,000 23 173.70 Total 264

Pricing Rs. 0 - Rs. 10,000 107 121.18 Rs. 10,001 - Rs. 20,000 55 141.54 Rs. 20,001 - Rs. 30,000 46 134.92 Rs. 30,001 - Rs. 40,000 33 129.67 Above Rs. 40,000 23 162.76 Total 264

Promotional offer Rs. 0 - Rs. 10,000 107 141.86 Rs. 10,001 - Rs. 20,000 55 139.18 Rs. 20,001 - Rs. 30,000 46 124.09 Rs. 30,001 - Rs. 40,000 33 142.59 Above Rs. 40,000 23 75.33 Total 264


Test Statisticsa,b

Efficacy Brand name Packaging Pricing Promotional offer

Chi-Square 6.190 9.755 9.477 7.926 23.310

df 4 4 4 4 4

Asymp. Sig. .185 .045 .050 .094 .000

a. Kruskal Wallis Test

b. Grouping Variable: Monthly income

EFFICACY




importance that respondents in the income groups give to the efficacy. Thus, Ho is accepted and

H1 is rejected.

BRAND NAME



Interpretation: As observed significance level is below 0.05, there is significant difference in

importance that respondents in the income groups give to the brand name. Thus, Ho is rejected

and H1 is accepted. Moreover, analysis of the mean ranks shown in the above table indicates that

people having Rs.20001 – Rs.30,000 incomes give the maximum importance to brand name

among all the income groups.


PACKAGING




that respondents in the income groups give to the packaging. Thus, Ho is rejected and H1 is

accepted. Moreover, analysis of the mean ranks shown in the above table indicates that people

having Rs.30001 – Rs.40,000 incomes give the maximum importance to packaging among all the

income groups.

PRICING




importance that respondents in the income groups give to the pricing. Thus, Ho is accepted and

H1 is rejected.

PROMOTIONAL OFFER




that respondents in the income groups give to the promotional offer. Thus, Ho is rejected and H1

is accepted. Moreover, analysis of the mean ranks shown in the above table indicates that people


having Above Rs.40,000 incomes give the maximum importance to promotional offer among all

the income groups.


FINDINGS

In Ahmedabad, when people suffer from minor disease most of them ie 40% take

medicine of their own

89% of respondents have used any of the pharma OTC products at some point of time in

their life

Most of the respondents prefer to purchase Pharma OTC products from Neighborhood

chemist store

In Ahmedabad, most of the respondents prefer to purchase OTC medicines as and when

needed as responded by 87% of respondents

When asked about the factors that influence them in making the purchase decision, 52%

of respondents has said that early prescription from doctors influence them

55% of respondents has ranked efficacy as most preferred feature of particular brand of

OTC products

Highest proportion of respondents that is 46% has ranked brand name as second most

preferred feature of particular brand of OTC products

41% respondents has ranked packaging as third most preferred feature of particular brand

of OTC products

50% respondents has ranked pricing as fourth most preferred feature of particular brand

of OTC products

Promotional offer has been ranked by 67% of respondents as fifth most preferred feature

of particular brand of OTC products

Among the medium of communication , television is preferred by 54% of respondents as

most appealing for advertisement of OTC products

Chemist play a major role as 59% of respondents seek detail information from the

chemist about the brand of product they purchase

63% respondents perceive OTC products as safe to buy and use

People in Ahmedabad are well informed as 59% of respondents are aware of the side-

effects of the OTC products they take


Most of the respondents read the labeling information on an OTC’s product package

before using it

Price, manufacture date and expiry date is read by most of the respondents

The respondents that always follow directions given on drug package are maximum in

number

Though 31% of respondents never get influenced by point of sale display while making a

purchase decision, there are 37% respondents who sometimes consider point of sale

display in their purchase decision regarding OTC products

56% respondents never visit drug store with primary intention to purchase only OTC

products but they purchase OTC products along with other prescription drugs

In Ahmedabad, 45.5% of respondents believe that when doctor inquires prior OTC

medicines use it help him to diagnose better and that doctor should do it routinely.

The most preferred frequency of stocking among respondents for major OTC categories:

o Vitamins and minerals are stocked sometimes,Indigestion and heart burn

medicines are stocked sometimes, Medicated skin care products like Soframycin

are always stocked, Cough remedies are always stocked, Sore throat medicines

are also always stocked, Herbal remedies are sometimes stocked, Laxatives are

never stocked, Anti-Diarrhoeals are never stocked, Haemorrhoid products are

never stocked

48% respondents take OTC medicines only when the illness is severe

27% respondents reconfirms first statement that people use OTC medicines only if the

illness is quite severe

51% respondents in Ahmedabad are well aware of the fact that no medicines are devoid

of any side-effects and no medicine in the world is good for our health

48% respondents in Ahmedabad know that Non-prescription medicines have side-effects

but they are not sure if they are having dangerous side-effects or not

54% respondents believe that medicines should be used according to directions for use

55% people believe that use of Non-prescription medicines can mask serious health

problems


Almost half of the total respondents agrees that non-prescription medicines interfere with

the natural healing process of the body

61% respondents said that Non-prescription medicines should not used frequently as they

may lose their effectiveness and thereafter they will not work at a same dose

According to 62% of respondents, Non-prescription medicines can also cause addiction

when used for a longer period of time

25% of respondents strongly diagree that Non-prescription medicines should not be used

frequently while 20% of respondents strongly agree with this statement

When asked about what action you will take if an OTC medicine did not work within

reasonable period of time , 74.4 % respondents would stop using the product and consult

the doctor

Dcold Total is a leading brand in cold and cough segment in tablet dosage form as

majority of respondents i.e 26% have used it

Benadryl cough syrup is a leading brand as majority of respondents i.e 40% have used it

Vicks lozenges is the most consumed brand while Alex lozenges is the least consumed

brand

Metacin is the most consumed brand with 26% of respondents using it while Combiflam

is not far behind with 25% of respondents are using it

Revital is far far ahead of all the other vitamin brands as 50% respondents have used

Revital personally

In Antacid category, there is fierce competition between Digene and Rantac with 28 %

respondents each using it

The most frequently used brand is Vicks while the least used brand is Amrutanjan

The Anova technique reveal that there is no difference between male and female for

following the directions given on drug package while among the age groups significant

difference exist between 19 years-30years and 31years-40years, and between 19years-

30years and 41years–50years

Among the education groups, significant difference exist between under-graduates and

Post-graduates and between Graduates and Post-graduates for following the directions

while among the income groups, no such differences exist.


Chi-Square technique reveals that there is dependence between feel about doctor’s

inquiry and income and between feel about doctor’s inquiry and age

Chemist play a major role as according to Z-test more than 50% of population seek detail

information from chemist about OTC products

Kruskal Wallis test is done to understand whether significant difference exist in

importance respondents in various population groups give to the various features of

brands of OTC products or not and for age groups, significant difference is found only for

efficacy and brand name among all the other criteria. Moreover, people above 60 years

give the maximum importance to efficacy and people in 31-40 years give the maximum

importance to brand name among all the age groups.

For income groups, significant difference is found for brand name, packaging and

promotional offer among all the other criteria. Moreover, people having Rs.20001 –

Rs.30,000 income give the maximum importance to brand name, people having Rs.30001

– Rs.40,000 income give the maximum importance to packaging and Above Rs.40,000

income give the maximum importance to promotional offer among all the income groups.


RECOMMENDATIONS

Chemist should play a very important role in the society and should try to inform

consumer about side effect and dosage rate of the medicine

Many respondents are still not aware about the side effects therefore government should

create awareness about the non-prescription medicines’ side-effects and should cap on

these hazardous OTC products

Consumers should prefer to purchase healthcare products from medical store rather than

grocery store, because they can get information about adverse effects more from the

chemist

Companies should give information about contra indication and dosage in the

advertisement and on label of the drug

An awareness program should be started by the government that explains the importance

of reading labeling information to the consumers

Consumers can not differentiate between prescribed and non prescribed drugs. Therefore

government should convert some of the well known and frequently purchased product

into OTC products that is Rx to OTC switch

People consider Brand rather than price and packaging of the OTC product so companies

should advertise more and build stronger brand

At the same time, people also consider efficacy or effectiveness as important feature thus

companies should build brand loyalty by providing high quality products

In order to increase the effectiveness of the advertisement, companies should use

television as a medium of communication

Supermarket/ malls should strive to improve their market by instilling trust into the

people and offering various incentives like lower prices and good quality products

Doctors should inquire the patients properly about prior OTC medicines use so that he

can diagnose in the better way and even people feel that doctor should do that routinely

People consider early prescription from a doctor as a most influencing factor for making

the purchase decision so rather than focusing on direct advertising, pharma companies

should also direct their attention to advertising to the doctors


Most of the people are not influenced by point of sale display while purchasing so it is a

good thing as medicines should not be taken without prior experience and it is also an

indication for the pharma companies to reduce spending on point of sale display


CONCLUSION

The Indian Pharmaceutical Industry today is in the front rank of India’s science-based

industries. This highly fragmented industry is very competitive. The companies are compelled to

focus on R&D and innovative methods to improve their manufacturing capabilities.

In the OTC drug marketing, the Customer and Consumer being the same, companies

have to immediately address the information needs more effectively and on a continuous basis.

The acceptability of OTC drugs will improve once the awareness level is enhanced. When the

knowledge of the traditional medicine is rooted in the culture, the knowledge about allopathic

OTC drugs has to be disseminated by manufacturing company and ensure drastic reduction in the

high information asymmetry existing today. The OTC drug offering is incomplete with out

empowering the public on its rational use through well planed strategic marketing initiative

revolving around the aliment, the knowledge to diagnose and manage the same. In this

empowerment process which can be considered as CSR, the objective should be prevention and

holistic awareness creation leading to health and wellbeing than just offering the minimum

needed information to use one’s products. Thus by educating public (consumer) on how to

manage common ailments and finally how to prevent them, the pharma companies can achieve

its real goal of health for all and improve the quality of people’s life.

The social benefit at a national level will be lesser work load on general practitioners,

pharmacists who are more empowered to guide and counsel patients and more confident public

who are in a better position to take more informed choice of the best available solution to treat

their common ailments and prevent the frequent occurrence of the same. This will increase

productivity at work and every one in society can make superior contribution towards nation

building as it strives to be a developed one.

In India, most residents are aware that OTC medicines could be purchased in

convenience stores, although most still showed preference for making purchases in pharmacies.

This may be due to different expectations for this outlet – the public may expect that pharmacies


can provide professional help, as well as offer good quality, lower prices, and a greater variety of

products.

As OTC product today enjoy a good market share and also in coming future as numbers

of drugs are going off-patent, so OTC market is going to see increasing market share.


Books

Malhotra, N.K., Marketing Research. Delhi : Pearson

Kothari, C., Business Methodology

Levin and Rubin, Statistics for Management. Delhi: Prentice-hall

Web sites

Pharma news retrieved from http://www.pharmabiz.com/article/search.asp

Pharmaceutical market information from http://pharmexcil.org/index.php

OTC profile retrieved from http://www.indiaoppi.com/IndiaOTCProfile2008.asp

Regulations retrieved from http://nppaindia.nic.in/index1.html

Perception for OTC products retrieved from

http://fampra.oxfordjournals.org/cgi/content/full/22/2/170#top

Pharmaceutical market information retrieved from

http://www.pharmaexpress.com/index.php

Company profile retrieved from http://www.novartis.com/products/over-counter.shtml

Company profile retrieved from http://www.zyduscadila.com/aboutus.html

Company profile retrieved from http://www.gsk-india.com/product-index.html

Journals Empirical analysis of OTC supplements in India retrieved from International Journal of

Indian Culture and Business Management


Efficacy: Power or capacity to produce a desired effect; effectiveness. Laxatives: Laxatives are foods, compounds, or drugs taken to induce bowel

movements or to loosen the stool, most often taken to treat constipation.

Anti-Diarrheal: An anti-diarrheal drug is any medication which provides

symptomatic relief for diarrhea.

Hemorrhoid: Hemorrhoids are swelling and inflammation of veins in the rectum and

anus.

Point of sale display: A point-of-sale display (POS) is a specialized form of sales

promotion that is found near, on, or next to a checkout counter (the "point of sale").

Indigestion: Used in curing Acidity

Antacid: used in curing Acidity

Lozenges: A small, medicated candy intended to be dissolved slowly in the mouth to

lubricate and soothe irritated tissues of the throat.

Gastrointestinal: The digestive system is the system by which ingested food is acted

upon by physical and chemical means to provide the body with nutrients it can absorb

and to excrete waste products; in mammals the system includes the alimentary canal

extending from the mouth to the anus, and the hormones and enzymes assisting in

digestion.

API: An active ingredient (AI) is the substance in a pharmaceutical drug or a pesticide

that is biologically active.

Drug Master File or DMF: DMF is a document prepared by a pharmaceutical

manufacturer and submitted solely at its discretion to the appropriate regulatory authority

in the intended drug market.

Stem cells: Stem cells are cells found in most, if not all, multi-cellular organisms. They

are characterized by the ability to renew themselves through mitotic cell division and

differentiating into a diverse range of specialized cell types.

Antiflatulent: An antiflatulent agent is a drug used for the alleviation or prevention

of excessive intestinal gas, i.e., flatulence


QUESTIONNAIRE FOR CONSUMERS

Dear Sir/Madam,

I am conducting a survey which is a part of Grand Project for partial fulfillment of MBA curriculum. Your views about the questions asked are welcomed and are of great importance to my project. The survey is solely for the academic purpose and details provided by you will be very much confidential.

1) What do you do when you suffer from a minor disease? Consult to the doctor Consult a friend Consult to a family member Take a medicine on your own Take a medicine which the storekeeper suggests Do nothing

2) Have you ever used any of the pharma OTC products?

(OTC products are the medicines that can be purchased without advice of the Doctor) Yes No

3) Which place you generally prefer to purchase Pharma OTC products? Neighborhood Chemist store Drug retail chain (like Apollo Pharmacy) Supermarket/mall Grocery stores

4) What is your preferred time interval for buying OTC products?

As and when needed Every Week Every Fortnight Every Month

5) Which factors influence you while making the purchase decision regarding particular brand of

OTC product? Earlier prescription from a Doctor Recommendation from a friend/relative Advertisements of a product Through product trial

6) Rank the following features of a particular brand of OTC products in order of your preference.

Efficacy Brand name Packaging Pricing Promotional Offer


7) Which medium of communication is most appealing to you for advertisements of OTC products?

Newspaper Magazines Television Internet Billboard Pamphlet

8) Do you seek detail information from the chemist of brand of the OTC products which you

purchase? Yes No

9) Do you perceive OTC products as safe to buy and use? yes No

10) Are you aware of side effects of OTC products you take?

Yes No

11) Do you read the labeling information on an OTC products’ package before using it? Yes No

If Yes, when you look at the package including the front, back, and sides, what information do you read? (Tick multiple options if you want)

Directions for use Active ingredients Warnings (about using it with other drugs or conditions) Possible side effects Price, manufacture date and expiry date Other_______________________________________________________

If No, then what is the reason behind it?

________________________________________________________________________

12) How often do you follow directions given on OTC drug package? Always Most of the times Sometimes Rarely Never


13) Do point of sale display influence you while making a purchase decision regarding OTC products?

Always Most of the times Sometimes Never

14) Do you visit Drug store with primary intention to purchase only OTC products?

Yes No

15) How would you feel when your doctor inquires you about OTC medicines taken before

consulting him/her? He should do it routinely It would be a good idea sometimes I don’t mind either ways It would be better if he don’t I would rather be upset if he did

16) Frequency of stocking common OTC medicines at home

CATEGORIES ALWAYS SOMETIMES SELDOM NEVER

Vitamin and Minerals

Indigestion/Heartburn

Medicated skin care products

Cough remedies

Sore throat

Herbal remedies

Laxatives

Anti‐Diarrheals

Hemorrhoid product


17) Give the following ten statements score from 1 to 5 where 1 means you strongly disagree and 5 means you strongly agree

STATEMENTS SCORE

1 2 3 4 5

I reach for OTC medicines at the first sign of illness

I use OTC medicines only if the illness is quite severe

Non‐prescription medicines are totally safe to use

Non‐prescription medicines can have dangerous side‐effects

The effect of incorrect use of non‐prescription medicines can be as serious as that of prescription medicines

Non‐prescription medicines can sometimes mask serious health problems

Some non‐prescription medicines interfere with the natural healing process of the body

With continual use, some non‐prescription medicines lose their effectiveness

Some non‐prescription medicines may cause dependency or addiction if taken for a long period of time

Non‐prescription medicines should be used frequently to relieve minor health problems

18) What action would you take if an OTC medicine did not work within reasonable period of time?

Stop using the product and consult the doctor Stop using product and ask the retailer Decrease the dose or stop the medication Increase the dose or use product more often Use for longer time


19) Tick ( ) against the brand(s) which you have used for personal consumption.

COLD AND COUGH SEGMENT

TABLET

BRAND USAGE

Lemolate

Dcold Total

Crocin Cold and Flu

Vicks Action 500

Okaset Cold

Other (Specify all the names)

SYRUP

BRAND USAGE

Benadryl

Corex‐dx

Tossex

Brozedex

Phensedyl

Other ( specify all the names)

LOZENGES

BRAND USAGE

Alex

Vicks

Strepsils

Halls

Koflet

Other (Specify all the names )


ANALGESIC (PAIN KILLER)

BRAND USAGE

Voveran

Metacin

Disprin

Calpol

Combiflam

Saridon

Dolo


MULTI‐VITAMIN

BRAND USAGE

Revital

Riconia

Beplex‐ forte

Becosules

Polybion


ANTACID

BRAND USAGE

Digene

Gelucil‐ Mps

Rantac

Zintac

Ranitin

Others(Specify all the names)


BALM AND OINTMENT

BRAND USAGE

Zandu

Tiger

Moov

Iodex

Amrutanjan

Vicks


Personal Details:

Name (Optional):________________________________________________________

Gender: Male Female

Age: 19 years ‐ 30 years 31 years ‐ 40 years 41 years ‐ 50 years 51 years ‐ 60 years Above 60 years Education: Undergraduate

Graduate Post‐ Graduate Monthly Income: Rs. 0 ‐ Rs. 10,000 Rs. 10,001 ‐ Rs. 20,000 Rs. 20,001 ‐ Rs. 30,000 Rs. 30,001‐ Rs. 40,000 Above Rs. 40,000

Thank You

Date post:	29-Jul-2015
Category:	Documents
Upload:	jnany-appu
View:	146 times
Download:	10 times

An in-Depth-study of OTC Medicine Segment of Indian Pharmaceutical Industry With Special

Documents