An In-Depth-Study of OTC Medicine Segment of Indian Pharmaceutical Industry With Special

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 consumers 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
N.R.Institute of Business Management Page 1
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 researchers 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.
N.R.Institute of Business Management
Page 2
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
Ayurveda
Siddha
Unani
Homeopathy
Naturopathy
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 patients 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
black bile. A persons 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.
INTERMEDIATE RAW MATERIAL (Plant derivatives/ Animal derivatives/ Synthetic Chemical)
BULK DRUGS ACTIVE INGREDIENT (Raw medicines cant be used for medicinal purpose) FILLER SUBSTANCE PASSIVE INGREDIENT (To make bulk drugs FORMULATION (Packed with proper instruction regarding price, expiry date, storage condition and dosage)
PATIENTS (Either directly or under prescription of the doctors)

Manufacturing Process N.R.Institute of Business Management Page 6
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
Page 7
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:
Page 10
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/semiregulated 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 worlds seven key markets (US, Japan, UK, Germany, France, Spain and Italy) will drive less than half of the industrys 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.
Page 13
PACE OF THE MARKET GROWTH:
Page 14
Page 15
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, topcompanies 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:
Page 16
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.
Page 18
Protection of patents
Generic drugs manufacturers represent a significant threat to research-based pharmaceutical companies. For example, Schering-Ploughs 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 SheringPlough, 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.
Page 19
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)

61,897
Johnson & Johnson Pfizer Roche GlaxoSmithKline Novartis Sanofi-Aventis AstraZeneca Abbott Laboratories Merck & Co. Bristol-Myers Squibb
United States
2 3 4 5 6 7 8
United States Switzerland United Kingdom Switzerland France United Kingdom United States
50,009 45,304 44,421 44,267 40,870 32,804 30,800
9 10
United States
27,428 24,158
United States
Page 20
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.
Page 21
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 worlds 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.
Page 22
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 70s 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 companys 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:
Page 27
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 countrys 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: Segmentwise sales
Page 29
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 Indias 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. Reddys 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 worlds 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.
Page 30
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), Indias DMF filings were around 3.5 times that of China -187 from India vis--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:
Page 31
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 Indias 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.
Page 32
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.
Page 35
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.
Page 37
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.
Page 39
INTRODUCTION:
1) Porters 5 force analysis of industry
Page 40
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.
Page 41
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 2. Dr. Reddy Lab 3. Cipla 4. Glaxo Smithkline Pharma 5. Sun Pharma 10.7% 8% 7% 5.4% 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.
Page 42
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. Its 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.
Page 44
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. alternate manufacturing methods. A lot of money was saved this way. Indian companies exploited this law and used the reverse-engineering route to invent a lot of 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
Page 46
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 nonstandardized 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. 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. As a result the reach of
Page 47
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.
Page 48
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 dont 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 posses 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
Page 51
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 worlds population, it accounts only 1.6% of the worlds 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 shortterm, 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.
Page 54
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.
Page 55
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 DCGIs 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 DCGIs office is considering coming out with a notification prohibiting the advertising of any drug which legally requires a doctors 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 Incs, worlds 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 oneyear 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 Canadas 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
Page 57
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 DurhamHumphrey and KefauverHarris Amendments define criteria to be used by the FDA in evaluating a new-drug application for a proposed over-the-
Page 58
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 cough and cold preparation Vitamin and Minerals Analgesics Medicated skin products Traditional Medicines Other
% share 22.30 18.70 15.20 12.60 5.30 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)
% share 18.70 16.00 15.00 8.90 16.70 24.60

Page 59
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
Page 60
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 longestablished 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 Englishspeaking 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,
Page 61
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.
Page 62
Indian OTC pharmaceuticals market segmentation (In % share, by value)
% share 19.80 11.60 11.40 2.60 27.30 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 Indias 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 Indias 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 groups 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 peoples 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 Limiteds 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 womens 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 wellknown 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 Dlite 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 industrys 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
Page 68
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 Athletes 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? Its 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 Dcold D'Cold Cough Syrup ItchGuard Moov Moov spray RingGuard Stopache
Page 70
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 Daburs 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
Page 71
Survey Analysis:
Demographic Profile:
Gender
EXHIBIT I
Male Female
Frequency 148 152
Percent 49 51
FIGURE I
Page 72
Age
EXHIBIT II
19 years - 30 years 31 years - 40 years 41 years - 50 years 51 years - 60 years Above 60 Years Total
Frequency 210 34 22 26 8 300
Percent 70 11 7 9 3 100
FIGURE II
Page 73
Education
EXHIBIT III
Undergraduate Graduate Post-Graduate Total
Frequency 90 116 94 300
Percent 30 39 31 100
FIGURE III
Page 74
Monthly Income
EXHIBIT IV
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 Total
Frequency 118 66 52 36 28 300
Percent 39 22 17 12 9 100
FIGURE IV
Page 75
1) What do you do when you suffer from a minor disease?
EXHIBIT 1
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 Total
Frequency 54 12 52 118 34 30 300
Percent 18 4 17 40 11 10 100
FIGURE 1.1
Page 76
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 dont prefer anybodys advice.
2) Have you ever used any of the pharma OTC products?

EXHIBIT 2
Yes No Total
Frequency 266 34 300
Percent 89 11 100
FIGURE 2.1
Page 78
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.
Page 79
3) Which place you generally prefer to purchase pharma OTC products?

EXHIBIT 3
Neighborhood chemist store Drug retail chain Supermarket/mall Grocery stores Total Missing Grand Total
Frequency 215 30 14 7 266 34 300
Percent 81 11 5 3 100
FIGURE 3.1
Page 80
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.
Page 81
4) What is your preferred time interval for buying OTC products?

EXHIBIT 4
As and when needed Every week Every fortnight Every month Total Missing Grand Total
Frequency 231 14 6 15 266 34 300
Percent 87 5 2 6 100
FIGURE 4.1
Page 82
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 dont prefer stocking OTC products at home.
Page 83
5) Which factors influence you while making the purchase decision regarding particular brand of OTC product?
EXHIBIT 5
Frequency Earlier prescription from doctors Recommendation from a friend/relative Advertisement of a product Through product trial Total Missing Grand Total 142 62 20 50 266 34 300
Percent 52 23 7 18 100
FIGURE 5.1
Page 84
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.
Page 85
6) Rank the following features of particular brand of OTC products in order of your preference.
EXHIBIT 6
Rank 1 Efficacy Brand Name Packaging Pricing Promotional Offer 146 102 2 11 4
Rank 2 79 122 15 36 14
Rank 3 28 38 109 57 31
Rank 4 5 2 88 132 37
Rank 5 8 36 50 28 178
Descriptive Statistics N Statistic Efficacy Brand name Packaging Pricing Promotional offer Valid N 266 264 264 264 264 264 1.6842 1.7727 3.6402 3.4924 4.4053 Mean Statistic Std. Error .05829 .04399 .05405 .06119 .06091 Std. Deviation Statistic .95062 .71476 .87816 .99425 .98974
Page 86
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
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Total Missing Grand Total Frequency 146 79 28 5 8 266 34 300 Percent 55 30 11 2 3 100
FIGURE 6.2.1
Page 88
Brand Name
Frequency 102 122 38 2 0 264 36 300 Percent 39 46 14 1 0 100
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Total Missing Grand Total
FIGURE 6.2.2
Page 89
Packaging
Frequency 2 15 109 88 50 264 36 300
FIGURE 6.2.3
Percent 1 6 41 33 19 100
Page 90
Pricing
FIGURE 6.2.4
Page 91
Promotional Offer
FIGURE 6.2.5
Page 92
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.
Page 93
7) Which medium of communication is most appealing to you for advertisement of OTC products?
EXHIBIT 7
Newspaper Magazines Television Internet Billboard Pamphlet Total Missing Grand Total
Frequency 58 16 143 25 5 19 266 34 300

FIGURE 7.1
Percent 22 6 54 9 2 7 100
Page 94
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.
Page 95
8) Do you seek detail information from the chemist of brand of the OTC products which you purchase?
EXHIBIT 8
Yes No Total Missing Grand Total
Frequency 157 109 266 34 300
Percent 59 41 100
FIGURE 8.1
Page 96
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.
Page 97
9) Do you perceive OTC products as safe to buy and use?

EXHIBIT 9
Frequency 167 99 266 34 300
Percent 63 37 100
FIGURE 9.1
Page 98
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.
Page 99
10)
Are you aware of side effects of OTC products you take?

EXHIBIT 10
Frequency 158 108 266 34 300
Percent 59 41 100
FIGURE 10.1
Page 100
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 sideeffects of OTC products they take. Thus, it can be safely concluded that consiousness about health is increasing day by day among the people.
Page 101
11)
Do you read the labeling information on an OTC products package before using it?
EXHIBIT 11
Frequency 244 22 266 34 300
Percent 92 8 100
FIGURE 11.1
Page 102
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 OTCsproduct 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.
Page 103
If yes, when you look at the package including the front, back, and sides, what information do you read?
EXHIBIT 11.1
Frequency Direction for use Active ingredients Warnings Possible Side effects Price, manufacture date and expiry date Other 158 122 125 126 192 12
Percent 21 17 17 17 26 2
FIGURE 11.1.1
FIGURE 11.2.1
Page 104
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.
Page 105
12)
How often do you follow directions given on OTC drug package?

EXHIBIT 12
Always Most of the times Sometimes Rarely Never Total Missing Grand Total
Frequency 100 90 54 19 3 266 34 300
Percent 38 34 20 7 1 100
FIGURE 12.1
Page 106
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.
Page 107
13)
Do point of sale display influence you while making a purchase decision regarding OTC products?
EXHIBIT 13
Always Most of the times Sometimes Never Total Missing Grand Total
Frequency 30 55 99 82 266 34 300
Percent 11 21 37 31 100
FIGURE 13.1
Page 108
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.
Page 109
14)
Do you visit Drug store with primary intension to purchase only OTC products?
EXHIBIT 14
Frequency 118 148 266 34 300
Percent 44 56 100
FIGURE 14.1
Page 110
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%.
Page 111
15)
How would you feel when your doctor inquires you about OTC medicines taken before consulting him/her?
EXHIBIT 15
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 Total Missing Grand Total
Frequency 121 56 64 18 7 266 34 300
Percent 45.5 21.1 24.1 6.8 2.6 100.0
FIGURE 15.1
Page 112
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 dont mind either ways, 18 said that It would be better if doctor dont 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.
Page 113
16)
Frequency of stocking common OTC medicines at home

EXHIBIT 16
Always Vitamins and minerals Indigestion. Heart burn Medicated skin care products Cough remedies Sore throat Herbal remedies Laxatives Anti- Diarrhoeals Hemorrhoids Products 76 60 97 114 78 55 19 56 12
Sometimes 80 84 76 90 74 82 55 64 26
Seldom 39 48 42 38 54 52 71 61 41
Never 71 74 51 24 60 77 121 85 187
Descriptive Statistics N Statistic Vitamin and Minerals Indigestion/Heartburn Medicated skin care products Cough remedies Sore throat Herbal remedies Laxatives Anti-Diarrhoeals Haemorrhoid product Valid N 266 266 266 266 266 266 266 266 266 266 2.3947 2.5113 2.1767 1.8947 2.3609 2.5677 3.1053 2.6579 3.5150 Mean Statistic Std. Error .07122 .06888 .06891 .05896 .06918 .06835 .05944 .06964 .05198 Std. Deviation Statistic 1.16157 1.12345 1.12383 .96163 1.12829 1.11471 .96944 1.13581 .84773
Page 114
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
Always Sometimes Seldom Never Total Missing Grand Total
Frequency 76 80 39 71 266 34 300
Percent 28 30 15 27 100
FIGURE 16.2.1
Page 116
Indigestion / Heartburn
EXHIBIT 16.2
Frequency 60 84 48 74 266 34 300
Percent 22 32 18 28 100
FIGURE 16.2.2
Page 117
Medicated Skin Care Products

EXHIBIT 16.3
Frequency 97 76 42 51 266 34 300
Percent 36 29 16 19 100
FIGURE 16.2.3
Page 118
Cough Remedies
EXHIBIT 16.4
Frequency 114 90 38 24 266 34 300
Percent 43 34 14 9 100
FIGURE 16.2.4
Page 119
Sore Throat
EXHIBIT 16.5
Frequency 78 74 54 60 266 34 300
Percent 29 28 20 23 100
FIGURE 16.2.5
Page 120
Herbal Remedies
EXHIBIT 16.6
Frequency 55 82 52 77 266 34 300
Valid Percent 21 31 19 29 100
FIGURE 16.2.6
Page 121
Laxatives
EXHIBIT 16.7
Frequency 19 55 71 121 266 34 300
Percent 7 21 27 45 100
FIGURE 16.2.7
Page 122
Anti Diarrheals
EXHIBIT 16.8
Frequency 56 64 61 85 266 34 300
Percent 21 24 23 32 100
FIGURE 16.2.8
Page 123
Hemorrhoid Products
EXHIBIT 16.9
Frequency 12 26 41 187 266 34 300
Percent 4 10 15 70 100
FIGURE 16.2.9
Page 124
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
Statement 1
Disagree 38
44 47
Neutral 57
53 73
Agree 32
56 33
Strongly Agree 50
71 26
89
42 87
Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Statement 7 Statement 8 Statement 9 Statement 10
32 51 33 28 30 30
66
27 21 20 44 27 25
38
83 51 68 67 48 45
71
61 65 69 56 73 62
37
63 78 77 71 88 104
54
Descriptive Statistics N Statistic Statement 1 Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Statement 7 Statement 8 Statement 9 Statement10 266 266 266 266 266 266 266 266 266 266 2.6842 3.2632 2.4887 3.3609 3.3684 3.5150 3.3684 3.6090 3.6955 2.9060 Mean Statistic Std. Error .09222 .08700 .08100 .07841 .08960 .08064 .08077 .08194 .08374 .08854 Std. Deviation Statistic 1.50405 1.41898 1.32104 1.27879 1.46132 1.31528 1.31737 1.33648 1.36580 1.44412
Page 125
FIGURE 17.1
Page 126
I reach for OTC medicines at the first sign of illness

EXHIBIT 17.1
Strongly disagree Disagree Neutral Agree Strongly agree Total Missing Grand Total
Frequency 89 38 57 32 50 266 34 300
Valid Percent 34 14 21 12 19 100
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.
Page 127
I use OTC medicines only if the illness is quite severe

EXHIBIT 17.2
Frequency 42 44 53 56 71 266 34 300
Percent 16 16 20 21 27 100
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 87 47 73 33 26 266 34 300
Valid Percent 33 18 27 12 10 100
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
Frequency 32 27 83 61 63 266 34 300

FIGURE 17.2.4
Percent 12 10 31 23 24 100
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.
Page 130
The effect of incorrect use of non-prescription medicines can be as serious as that of prescription medicines
EXHIBIT 17.5
Frequency 51 21 51 65 78 266 34 300
Percent 19 8 19 25 29 100
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.
Page 131
Non-prescription medicines can sometimes mask serious health problems

EXHIBIT 17.6
Frequency 33 20 67 69 77 266 34 300
Percent 12 8 25 26 29 100
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.
Page 132
Some non-prescription medicines interfere with the natural healing process of the body
EXHIBIT 17.7
Frequency 28 44 67 56 71 266 34 300
Percent 10 17 25 21 27 100
FIGURE 17.2.7
Interpretation:
Proportion of respondents agreeing with this statement is almost half of the total respondents while of the respondents have expressed neutral opinion about the statement while remaining of the respondents have disagreed with the statement.
With continual use, some non-prescription medicines lose their effectiveness

EXHIBIT 17.8
Frequency 30 27 48 73 88 266 34 300
Percent 11 10 18 28 33 100
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.
Page 134
Some non-prescription medicines may cause dependency or addiction if taken for a long period of time
EXHIBIT 17.9
Frequency 30 25 45 62 104 266 34 300

FIGURE 17.2.9
Percent 11 10 17 23 39 100
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.
Page 135
Non-prescription medicines should be used frequently to relieve minor health problems

EXHIBIT 17.10
Frequency 66 38 71 37 54 266 34 300

FIGURE 17.2.10
Percent 25 14 27 14 20 100
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
Stop using the product and consult the doctor Stop using the product and ask the retailer Decrease the dose or stop the medication Increase the dose or use product more often Use for longer time Total Missing Grand Total
Frequency 198 31 23 12 2 266 34 300
Percent 74 12 9 4 1 100
FIGURE 18.1
Page 137
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.
Page 138
19)
Tick ( ) against the brand(s) which you have used for personal
consumption COLD AND COUGH SEGMENT

TABLET
EXHIBIT 19.1.1
Frequency Lemolate Dcold total Crocin cold and flu Vicks action 500 Okaset cold Other tablet
FIGURE 19.1.1
105 139 118 128 14 27
Percent 20 26 22 24 3 5
Page 139
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.
Page 140
SYRUP
EXHIBIT 19.1.2
Benadryl Corex dx Tossex Brozedex Phensedyl Other Syrup
Frequency 135 79 44 29 31 23
percent 40 23 13 8 9 7
FIGURE 19.1.2
Page 141
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.
Page 142
LOZENGES
EXHIBIT 19.1.3
Alex Vicks Strepsils Halls Koflet Other Lozenges
Frequency 21 215 149 117 29 3
Percent 4 40 28 22 5 1
FIGURE 19.1.3
Page 143
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.
Page 144
ANALGESIC (PAIN KILLER)

EXHIBIT 19.2
Voveran Metacin Disprin Calpol Combiflame Saridon Dolo Other Analgesic
Frequency 19 166 139 55 161 64 23 20
Percent 3 26 21 8 25 10 4 3
FIGURE 19.1.4
Page 145
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.
Page 146
MULTI VITAMIN
EXHIBIT 19.3
Revital Riconia Beplex Becosules Polybion Other Multi vitamin
Frequency 101 19 25 28 21 7
Percent 50 10 12 14 10 4
FIGURE 19.1.5
Page 147
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.
Page 148
ANTACID
EXHIBIT 19.4
Digene Gelucil Rantac Zintac Ranitin Other Antacid
Frequency 96 58 98 43 47 5
Percent 28 17 28 12 14 1
FIGURE 19.1.6
Page 149
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.
Page 150
BALM AND OINMENT

EXHIBIT 19.5
Zandu Tiger Moov Iodex Amrutanjan Vicks Other Balm and Oinment
Frequency 87 87 125 133 45 189 8.0
Percent 13 13 18 20 7 28 1
FIGURE 19.1.7
Page 151
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
Page 152
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 () = 0.05
Follow direction on package 95% Confidence Interval for Mean N Male Female Total 134 132 266 Mean 2.0149 1.9924 2.0038 Std. Deviation .97321 .99997 .98478 Std. Error Lower Bound Upper Bound Minimum Maximum .08407 .08704 .06038 1.8486 1.8202 1.8849 2.1812 2.1646 2.1226 1.00 1.00 1.00 5.00 5.00 5.00
Page 153
EXHIBIT 1.1
ANOVA Follow direction on package Sum of Squares Between Groups Within Groups Total .034 256.963 256.996 Df 1 264 265 Mean Square .034 .973 F .035 Significance .853
Interpretation:
The significance level as indicated in the table is 0.853 which is much higher than predetermined level of significance () (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.
Page 154
Age
Ho: Population means for following the directions given on the package are not significantly different across age groups H1: Population means for following the directions given on the package are significantly different across age groups Descriptives Follow direction on package 95% Confidence Interval for Mean N 19 years - 30 years 31 years - 40 years 41 years - 50 years 51 years - 60 years Above 60 Years Total 186 30 19 24 7 266 Mean 1.8226 2.5000 2.5789 2.1667 2.5714 2.0038 Std. Deviation .86726 1.00858 1.26121 1.16718 .97590 .98478 Std. Error .06359 .18414 .28934 .23825 .36886 .06038 Lower Bound 1.6971 2.1234 1.9711 1.6738 1.6689 1.8849 Upper Bound 1.9480 2.8766 3.1868 2.6595 3.4740 2.1226 Minimum Maximum 1.00 1.00 1.00 1.00 2.00 1.00 5.00 4.00 5.00 4.00 4.00 5.00
Page 155
EXHIBIT 1.2
ANOVA Follow direction on package Sum of Squares Between Groups Within Groups Total 22.672 234.324 256.996 df 4 261 265 Mean Square 5.668 .898 F 6.313 Sig. .000
Follow direction on package Scheffe Mean Difference (I(I) Age (J) Age J) Std. Error Sig. * 19 years - 30 years 31 years - 40 years -.67742 .18642 .012 41 years - 50 years 51 years - 60 years Above 60 Years 31 years - 40 years 19 years - 30 years 41 years - 50 years 51 years - 60 years Above 60 Years 41 years - 50 years 19 years - 30 years 31 years - 40 years 51 years - 60 years Above 60 Years 51 years - 60 years 19 years - 30 years 31 years - 40 years 41 years - 50 years Above 60 Years -.75637* -.34409 -.74885 .67742* -.07895 .33333 -.07143 .75637* .07895 .41228 .00752 .34409 -.33333 -.41228 -.40476 .22821 .20551 .36481 .18642 .27781 .25949 .39772 .22821 .27781 .29096 .41894 .20551 .25949 .29096 .40702 .029 .592 .380 .012 .999 .800 1.000 .029 .999 .734 1.000 .592 .800 .734 .911
95% Confidence Interval Lower Bound Upper Bound -1.2558 -.0991 -1.4644 -.9817 -1.8806 .0991 -.9408 -.4717 -1.3053 .0484 -.7829 -.4904 -1.2922 -.2935 -1.1384 -1.3150 -1.6675 -.0484 .2935 .3829 1.2558 .7829 1.1384 1.1625 1.4644 .9408 1.3150 1.3072 .9817 .4717 .4904 .8580
*. The mean difference is significant at the 0.05 level.
Page 156
Interpretation:
The ANOVA table reveals that significance level is much lower than alpha () (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.
Page 157
Education
Ho: Population means for following the directions given on the package are not significantly different across education level groups H1: Population means for following the directions given on the package are significantly different across education level groups Descriptives Follow direction on package 95% Confidence Interval for Mean N Undergraduat e Graduate PostGraduate Total 78 104 84 266 Mean 2.2051 2.1827 1.5952 2.0038 Std. Deviation 1.10910 .99283 .69627 .98478 Std. Error .12558 .09736 .07597 .06038 Lower Bound 1.9551 1.9896 1.4441 1.8849 Upper Bound 2.4552 2.3758 1.7463 2.1226 Minimum Maximum 1.00 1.00 1.00 1.00 5.00 5.00 3.00 5.00
EXHIBIT 1.3
ANOVA Follow direction on package Sum of Squares Between Groups Within Groups Total 20.511 236.485 256.996 df 2 263 265 Mean Square 10.256 .899 F 11.406 Sig. .000
Page 158
Multiple Comparisons Follow direction on package Scheffe Mean Difference (I(J) Education J) Std. Error Graduate Post-Graduate Graduate Undergraduate Post-Graduate Post-Graduate Undergraduate Graduate .02244 .60989* -.02244 .58745
*
95% Confidence Interval Sig. .988 .000 .988 .000 .000 .000 Lower Bound Upper Bound -.3272 .2428 -.3721 .2450 -.9770 -.9299 .3721 .9770 .3272 .9299 -.2428 -.2450
(I) Education Undergraduate
.14204 .14911 .14204 .13911 .14911 .13911
-.60989* -.58745
*
*. The mean difference is significant at the 0.05 level.
Interpretation:
The ANOVA table indicates that significance level is much lower than alpha () (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.
Page 159
Income
Ho: Population means for following the directions given on the package are not significantly different across income groups H1: Population means for following the directions given on the package are significantly different across income groups
Descriptives Follow direction on package 95% Confidence Interval for Mean N 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 Total 107 55 46 33 25 266 Mean 1.9907 1.9455 1.8913 2.0909 2.2800 2.0038 Std. Deviation 1.12010 .70496 .87504 1.01130 1.06145 .98478 Std. Error .10828 .09506 .12902 .17604 .21229 .06038
EXHIBIT 1.4
Lower Bound 1.7760 1.7549 1.6314 1.7323 1.8419 1.8849
Upper Bound 2.2053 2.1360 2.1512 2.4495 2.7181 2.1226
Minimum Maximum 1.00 1.00 1.00 1.00 1.00 1.00 5.00 3.00 4.00 4.00 4.00 5.00
ANOVA Follow direction on package Sum of Squares Between Groups Within Groups Total 2.945 254.051 256.996 df 4 261 265 Mean Square .736 .973 F .756 Sig. .554
Page 160
Multiple Comparisons Follow direction on package Scheffe Mean Difference (I-J) .04520 .09935 -.10025 -.28935 -.04520 .05415 -.14545 -.33455 -.09935 -.05415 -.19960 -.38870 .10025 .14545 .19960 -.18909 .28935 .33455 .38870 .18909 Std. Error .16369 .17395 .19645 .21916 .16369 .19712 .21724 .23798 .17395 .19712 .22507 .24514 .19645 .21724 .22507 .26159 .21916 .23798 .24514 .26159 95% Confidence Interval Lower Upper Bound Bound -.4626 .5530 -.4403 -.7097 -.9693 -.5530 -.5574 -.8194 -1.0728 -.6390 -.6657 -.8979 -1.1492 -.5092 -.5285 -.4987 -1.0007 -.3906 -.4038 -.3718 -.6225 .6390 .5092 .3906 .4626 .6657 .5285 .4038 .4403 .5574 .4987 .3718 .7097 .8194 .8979 .6225 .9693 1.0728 1.1492 1.0007
(I) Monthly income (J) 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 Rs. 10,001 - Rs. Rs. 0 - Rs. 10,000 20,000 Rs. 20,001 - Rs. 30,000 Rs. 30,001 - Rs. 40,000 Above Rs. 40,000 Rs. 20,001 - Rs. Rs. 0 - Rs. 10,000 30,000 Rs. 10,001 - Rs. 20,000 Rs. 30,001 - Rs. 40,000 Above Rs. 40,000 Rs. 30,001 - Rs. Rs. 0 - Rs. 10,000 40,000 Rs. 10,001 - Rs. 20,000 Rs. 20,001 - Rs. 30,000 Above Rs. 40,000 Above Rs. 40,000 Rs. 0 - Rs. 10,000 Rs. 10,001 - Rs. 20,000 Rs. 20,001 - Rs. 30,000 Rs. 30,001 - Rs. 40,000
Sig. .999 .988 .992 .783 .999 .999 .978 .740 .988 .999 .940 .643 .992 .978 .940 .971 .783 .740 .643 .971
Page 161
Interpretation:
The significance level as indicated in the table is 0.554 which is much than predetermined level of significance () (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.
Page 162
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
Monthly income Feel when doctor inquires you Rs. 0 - Rs. Rs. 10,001 10,000 Rs. 20,000 52 24 Rs. 20,001 - Rs. 30,000 22 Rs. 30,001 - Rs. 40,000 16 Total Above Rs. 40,000 7 121
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 Total
14
16
12
10
56
31
13
64
18
107
55
46
33
25
266
Page 163
Row 1
1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5
Column 1
2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Observed Frequency 52
24 22 16 7 14 16 12 4 10 31 13 6 8 6 5 2 6 3 2 5 0 0 2 0
Expected Frequency 48.7 25 20.9 15 11.4 22.5 11.6 9.7 6.9 5.3 25.7 13.2 11.1 7.9 6 7.2 3.7 3.1 2.2 1.7 2.8 1.4 1.2 0.9 0.7
Fo - Fe 3.3 -1 1.1 1 -4.4 -8.5 4.4 2.3 -2.9 4.7 5.3 -0.2 -5.1 0.1 0 -2.2 -1.7 2.9 0.8 0.3 2.2 -1.4 -1.2 1.1 -0.7
(Fo - Fe)^2 10.89 1 1.21 1 19.36 72.25 19.36 5.29 8.41 22.09 28.09 0.04 26.01 0.01 0 4.84 2.89 8.41 0.64 0.09 4.84 1.96 1.44 1.21 0.49
(Fo-Fe)^2/Fe 0.224 0.040 0.058 0.067 1.698 3.211 1.669 0.545 1.219 4.168 1.093 0.003 2.343 0.001 0.000 0.672 0.781 2.713 0.291 0.053 1.729 1.400 1.200 1.344 0.700 27.222
Page 164
FIGURE 2.1
Tabulated = 23.542 Calculated = 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 anybodys 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.
Page 165
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 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 Total
Age 19 years 30 years 85 34 48 14 5 186 31 years 40 years 12 10 8 0 0 30 41 years 50 years 11 4 4 0 0 19 51 years 60 years 12 6 4 2 0 24 Above 60 Years 1 2 0 2 2 7
Total 121 56 64 18 7 266
Page 166
Row 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5
Column 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Observed Frequency 85 12 11 12 1 34 10 4 6 2 48 8 4 4 0 14 0 0 2 2 5 0 0 0 2
Expected Frequency 84.6 13.6 8.6 10.9 3.2 39.2 6.3 4 5.1 1.5 44.8 7.2 4.6 5.8 1.7 12.6 2 1.3 1.6 0.5 4.9 0.8 0.5 0.6 0.2
Fo - Fe 0.4 -1.6 2.4 1.1 -2.2 -5.2 3.7 0 0.9 0.5 3.2 0.8 -0.6 -1.8 -1.7 1.4 -2 -1.3 0.4 1.5 0.1 -0.8 -0.5 -0.6 1.8
(Fo-Fe)^2 0.16 2.56 5.76 1.21 4.84 27.04 13.69 0 0.81 0.25 10.24 0.64 0.36 3.24 2.89 1.96 4 1.69 0.16 2.25 0.01 0.64 0.25 0.36 3.24
(FoFe)^2/Fe 0.002 0.188 0.670 0.111 1.513 0.690 2.173 0.000 0.159 0.167 0.229 0.089 0.078 0.559 1.700 0.156 2.000 1.300 0.100 4.500 0.002 0.800 0.500 0.600 16.200 34.484
Page 167
FIGURE 2.2
Tabulated = 23.542 Calculated = 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.
Page 168
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 () = 0.05 Defining the probability of success p1 = p/n = 157/266 = 0.5902 q1 = q/n =109/266 = 0.4098 pHo = 0.5 qHo = 0.5
Calculation of Standard Deviation Standard deviation = p = pq/n = (0.50X0.50)/266 = 0.00094 =0.0307
Page 169
FIGURE 3.1
Calculation of z-statistics Calculated Z statistics = (p1 pHo) / p1 = (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.
Page 170
4) Kruskal-Wallis Test Between age and features of brand of OTC products

EXHIBIT 4.1
Efficacy
Brand name
Packaging
Pricing
Promotional offer
Age 19 years - 30 years 31 years - 40 years 41 years - 50 years 51 years - 60 years Above 60 Years Total 19 years - 30 years 31 years - 40 years 41 years - 50 years 51 years - 60 years Above 60 Years Total 19 years - 30 years 31 years - 40 years 41 years - 50 years 51 years - 60 years Above 60 Years Total 19 years - 30 years 31 years - 40 years 41 years - 50 years 51 years - 60 years Above 60 Years Total 19 years - 30 years 31 years - 40 years 41 years - 50 years 51 years - 60 years Above 60 Years Total
N 186 30 19 24 7 266 186 28 19 24 7 264 186 28 19 24 7 264 186 28 19 24 7 264 186 28 19 24 7 264
Mean Rank 132.28 159.13 102.82 148.04 89.57 130.98 116.36 160.13 123.50 193.21 132.67 126.68 131.11 146.71 106.36 129.25 114.88 160.08 161.04 116.71 134.79 135.89 128.45 105.92 160.14
Page 171
Test Statisticsa,b Efficacy Brand name Packaging Chi-Square df Asymp. Sig. 11.818 4 .019 10.197 4 .037 2.057 4 .725 Pricing 9.245 4 .055 Promotional offer 5.955 4 .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
Interpretation:
As observed significance level is below 0.05, there is significant difference in importance 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
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
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 pricing. Thus, Ho is accepted and H1 is rejected.
PROMOTIONAL OFFER
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 promotional offer. Thus, Ho is accepted and H1 is rejected.
Page 173
Between Income and features of brand of OTC products

EXHIBIT 4.2
Efficacy
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 Total
N 107 55 46 33 25 266 107 55 46 33 23 264 107 55 46 33 23 264 107 55 46 33 23 264 107 55 46 33 23 264
Mean Rank 134.69 122.05 153.80 125.30 127.06 135.99 128.59 110.98 135.14 164.89 127.03 126.22 138.70 123.35 173.70 121.18 141.54 134.92 129.67 162.76 141.86 139.18 124.09 142.59 75.33
Brand name
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
Packaging
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 Total
Pricing
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
Total Promotional offer 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 Total
Page 174
Test Statisticsa,b Efficacy Chi-Square df 6.190 4 Brand name 9.755 4 .045 Packaging 9.477 4 .050 Pricing 7.926 4 .094 Promotional offer 23.310 4 .000
Asymp. Sig. .185 a. Kruskal Wallis Test
b. Grouping Variable: Monthly income
EFFICACY
Interpretation:
As observed significance level is above 0.05, there is no significant difference in 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
Interpretation:
As observed significance level is below 0.05, there is significant difference in importance 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
Interpretation:
As observed significance level is above 0.05, there is no significant difference in importance that respondents in the income groups give to the pricing. Thus, Ho is accepted and H1 is rejected.
PROMOTIONAL OFFER
Interpretation:
As observed significance level is below 0.05, there is significant difference in importance 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.
Page 177
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 sideeffects of the OTC products they take
Page 178
Most of the respondents read the labeling information on an OTCs 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
Page 179
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 19years30years and 41years50years 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 doctors inquiry and income and between feel about doctors 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.
Page 181
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
Page 183
CONCLUSION
The Indian Pharmaceutical Industry today is in the front rank of Indias 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 ones 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 peoples 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.
Page 185
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
Page 186
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

symptomatic relief for diarrhea.
medication which provides
Hemorrhoid: Hemorrhoids are

anus.
swelling and inflammation of veins in the rectum and
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 N.R.Institute of Business Management Page 188
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
Page 189
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 dont mind either ways It would be better if he dont I would rather be upset if he did 16) Frequency of stocking common OTC medicines at home CATEGORIES Vitamin and Minerals Indigestion/Heartburn Medicated skin care products Cough remedies Sore throat Herbal remedies Laxatives AntiDiarrheals Hemorrhoid product ALWAYS SOMETIMES SELDOM NEVER
Page 190
17) Give the following ten statements score from 1 to 5 where 1 means you strongly disagree and 5 means you strongly agree
STATEMENTS 1 2
SCORE 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 Nonprescription medicines are totally safe to use Nonprescription medicines can have dangerous side effects The effect of incorrect use of nonprescription medicines can be as serious as that of prescription medicines Nonprescription medicines can sometimes mask serious health problems Some nonprescription medicines interfere with the natural healing process of the body With continual use, some nonprescription medicines lose their effectiveness Some nonprescription medicines may cause dependency or addiction if taken for a long period of time Nonprescription 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
Page 191
19) Tick ( ) against the brand(s) which you have used for personal consumption. COLD AND COUGH SEGMENT TABLET BRAND Lemolate Dcold Total Crocin Cold and Flu Vicks Action 500 Okaset Cold Other (Specify all the names) USAGE
SYRUP BRAND Benadryl Corexdx Tossex Brozedex Phensedyl Other ( specify all the names) USAGE
LOZENGES BRAND Alex Vicks Strepsils Halls Koflet Other (Specify all the names ) USAGE
Page 192
ANALGESIC (PAIN KILLER) BRAND Voveran Metacin Disprin Calpol Combiflam Saridon Dolo Other (Specify all the names) USAGE
MULTIVITAMIN BRAND Revital Riconia Beplex forte Becosules Polybion Other (Specify all the names) USAGE
ANTACID BRAND Digene Gelucil Mps Rantac Zintac Ranitin Others(Specify all the names) USAGE
Page 193
BALM AND OINTMENT BRAND Zandu Tiger Moov Iodex Amrutanjan Vicks Other (Specify all the names) USAGE
Personal Details:
Name (Optional):________________________________________________________ Gender: Age: Male 19 years 30 years 31 years 40 years 41 years 50 years 51 years 60 years Above 60 years Undergraduate Graduate Post Graduate 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 Female
Education:
Monthly Income:
Thank You

An In-Depth-Study of OTC Medicine Segment of Indian Pharmaceutical Industry With Special

Uploaded by

Copyright:

Available Formats

An In-Depth-Study of OTC Medicine Segment of Indian Pharmaceutical Industry With Special

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

An In-Depth-Study of OTC Medicine Segment of Indian Pharmaceutical Industry With Special

Uploaded by

Copyright:

Available Formats

RESEARCH TOPIC

N.R.Institute of Business Management

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

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

INTERMEDIATE RAW MATERIAL (Plant derivatives/ Animal derivatives/ Synthetic Chemical)

PATIENTS (Either directly or under prescription of the doctors)

BULK DRUGS AND FORMULATION:

RESEARCH & DEVELOPMENT:

N.R.Institute of Business Management

THERAPEUTIC MARKET SEGMENTATION:

N.R.Institute of Business Management

ORIGINS AND EVOLUTION:

Prescription drugs These have to be prescribed or administered by healthcare

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

N.R.Institute of Business Management

PACE OF THE MARKET GROWTH:

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

Drugs portfolio management

N.R.Institute of Business Management

Major Players in the Market:

Total Revenues (USD millions)

50,009 45,304 44,421 44,267 40,870 32,804 30,800

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

Fig: Segmentwise sales

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

Fig: Advantage India-API (SOURCE: CRISINFAC, YES BANK/ OPPI)

N.R.Institute of Business Management

Fig: Indian Formulation Exports

Contract research and manufacturing

CRITICAL SUCCESS FACTORS:

New product development

N.R.Institute of Business Management

N.R.Institute of Business Management

Low cost production through scale

PHARMACEUTICAL REGULATORY BODIES IN INDIA:

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

N.R.Institute of Business Management

World Scenario of OTC market:

N.R.Institute of Business Management

US OTC Pharmaceuticals market

N.R.Institute of Business Management

% share 22.30 18.70 15.20 12.60 5.30 25.90