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Dear Pharma Veterans. I am starting this series of Blogs to share my learning about Pharma Business in Pakistan. It will be a series spread over several parts covering the entire spectrum of Pharma business.
Pharma Business Overview
Health Is among the basic necessities of life. Getting adequate healthcare is the fundamental constitutional right of every citizen and providing it is the responsibility of state. The situation in not so black and white in any country of the world; there are several grey areas on both sides.
Healthcare rests on several pillars, including but not limited to, clean environment, clinical services, diagnostic services, hospitals, and medicines. All of these have evolved as huge businesses over time. Apothecary or medicines are the oldest and have been around for as long as the mankind has been. It started from free, wild, naturally occurring plants and has gone through innumerable stages to reach where extremely specialized and extremely costly medicines that come into use today. The human beings harnessed nature, mimicked it, isolated the, synthesized it, changed it, packed it, and sold it. True, there are some specialty drugs which have not come through this route, but most have.
Pharma business is a business like any other business. It is for-profit and rightly so. If there are no profits, there will be no new research.
Pharmaceutical industry working is based on three segments. There is a business side, there is operations side and there is control side. We shall mostly focus on the business side.
Pharma Business Volume and Growth
The Pakistan Pharmaceutical business is close to 400 billion rupees presently and has been growing steadily; mostly by double digit, thanks to new products, new entrants and major players pursuing aggressive growth goals. The number of pharmaceutical manufacturing companies has increased dramatically and stands at over seven hundred.
The pharma market is highly unevenly divided. Top 50 companies hold over 90% business while the rest 650 + companies run for only less than 10% slice of the pie. This unevenness has given rise to certain peculiarities which will come into discussion by and by.
Pharma Business Basics
We shall start with the basics and then go into diversities.
Following activities are inherent to pharma business.
- Marketing Planning
- Business Development
- Supply Chain
- Manufacturing – own or contractual
I have deliberately started from Marketing because this is absolutely unavoidable, no matter what the type or scale of business is.
I may also mention here that most pharma companies falter in this area. They focus on manufacturing but consider marketing as a no-go area. They consider toll-manufacturing, franchising and contract marketing being out of scope of marketing. I shall contest this notion. The purpose of all business is to market themselves. No one produces goods and services for own consumption only; it is for commercial presentation and revenue generation. Marketing therefore is implicit in business. Yes, what is usually referred to by saying “we don’t do marketing’ is that “we don’t promote our products directly, we sell to another business who then take it to consumer”.