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Trade margins:

Trade margins are being suggested by DPCO and hence almost everybody in industry is following the same practice. This leads to almost 16%-20% margin on MRP for a pharmacist and 10% margin for stockist or distributors in this chain. In other words when MRP is Rs. 100 actual realisation price for company becomes Rs. 72 and overall margin Rs. 28 is given from MRP to middlemen!

Secondly, the manufacturing companies are licensed in each state in such a way that there is over capacity to manufacture medicines in India. Contract manufacturing wave has further taken ride and has saved the manufacturing cost, manufacturing charges which are also stipulated as per DPCO is the earning of contract manufacturers.

This overcapacity has rendered support to so many manufacturers or marketers who manufacture their products with these contract manufacturers. As a result we have plethora of generics available.

Recently Competition Commission of India released POLICY NOTE for affordable healthcare and mentions the first issue of high trade margins.

Considering this context, the policy note is talking about the trade margins stipulated by law or as a result of increased availability and high competition that those small manufacturers are offering high margins beyond stipulation on MRP.

To improve direct sale, generic manufacturers offer more margins to push their products. These trade margins have been very well exploited.

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Investment surge in E-pharmacy sector

2018 has demonstrated highest amount of private equity and venture capital investment in the country’s online pharmacy sector. The sector observed 10 deals of worth $140 million (Rs 8.8 billion) in 2018, as compared to five deals worth $37 million in 2017, according to data from Venture Intelligence, a research and analysis entity. Moreover, ResearchAndMarkets.com estimates the e-pharmacy market potential at over a billion dollars, with emergence of Amazon and Flipkart to get into this sector. The manpower supporting e-pharmacy today is around 20,000 with 1.5 million customers, according to a senior member of Digital Health Platform, the combination of online sellers.

For more Details Refer…

https://www.business-standard.com/article/companies/investment-surge-in-online-pharmacy-six-year-high-in-2018-observers-118123000598_1.html

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Indian Pharma- Reputation Gap

World is looking for affordable treatment through quality and safe generics to reduce their disease burden. Considering the consumption of generic medicines in US alone, almost 45% of population is taking made in India medicines. As the time is passing, US population is consuming made in India medicines since last many years having relief and helping them in active life.

Quality and safety are the major aspects of any medicine for every citizen of any country, as it is affecting human life. Every manufacturer takes efforts to ensure that the systems, processes and regulations of manufacturing country and of those where they are exporting.

The Indian pharmaceutical industry follows stringent quality standards set by global regulatory agencies. The generic drugs that we manufacture undergo rigorous procedures to ensure the same quality standards as that of originator drugs.

Bottle of lies:

A new book arrives and discusses a decade old quality issue of Indian Manufacturers which world takes notice, makes sensational news and tries to make it as if it has happened a few days back!

Really an amazing engagement of all stake holders of pharma all over the world!!

Indian manufacturers are providing quality generic drugs to the patients throughout the world. For Indian pharma, patient’s health and safety remains fundamental. We will continue our efforts towards making a positive difference in lives of patients in most need by providing safe, efficacious and quality drugs. In India, we have been following principle of affordability, accessibility and quality since ages, as India is World’s best pharmacy hub.

The inferences in the Book titled Bottle of Lies are back dated, fed on half-truths and draw on historic information of select cases. These are far from the present situation.

Wrongly created perception gap:

As this perception gap about India is created on a few select cases and also not quoting other cases of many countries, projects different view point about Indian generic formulations. There are three implications of this kind of creation of perception gap and which would affect more to Indian Pharma industry.

  1. Creates bad opinion and bad business environment

As pharmaceuticals are a socio-political-economic issue and it affects every citizen of each country, media further projects wrong side of the country. Hence, everybody looks at pharmaceutical industry and the prices of medicine with a Jaundiced eye, whereas emergence of new diseases and million-dollar investment in creating solutions through new vaccines and medicines that goes unnoticed. As each country is trying to reduce its disease burden through selection of high quality, low cost generic medicines made in India on the contrary are serving almost all countries inclusive of US.

Once this perception gap is created and comes on the top in media with type, business environment becomes Doubting Thomas!

It hampers the Global industry dynamics.

  1. Uncertainty turns away investment

Such gap which creates poor reputation hits companies where it hurts, which gets converted to stock prices. Investors shy away from such industries where uncertainty increases.

It is very difficult to prove or disprove, but it is a fact that gap in reputation leads to shying away from industrial sector.

  1. Gap in reputation also repels talent

This is a long-term loss, whereby incoming talent to industry is repelled.

Almost similar, but not exactly same situation took away an opportunity of becoming world’s recognised hub of clinical trials few years before!

Bottle of facts: 

  1. India amongst top five pharmaceutical industry

Globally, Indian pharma has outperformed to improve public health outcomes, it accounts for 60 percent of global vaccine production. One in every three pills consumed in the United States is produced by an Indian generic’s manufacturer. In the UK, approximately 25% of the medicines used are made in India. India’s exports of generic drugs have also been growing at a very impressive rate of 24% per year for the last four years. Majority of exports is done to highly-regulated western markets. Even the cost of HIV/AIDS treatment has reduced to $400 per year from $12,000.

  1. Indian Generics a boon to US Healthcare system

In last 10 years, US healthcare system has saved almost $2 trillion due to usage of generic drugs. Out of this, saving of $293 billion is from 2018, as per IQVIA Institute for Human Data Science.

This clearly indicates the efficiency of the Indian pharma sector in terms of quality and pricing.

  1. Decreased OAI Inspection

According to USFDA data, wherever the issue was figured out during inspections, the Indian pharmaceutical organizations made remedial measures, and witnessed 4% inspection which is classified as Official Action Indicated (OAI) in 2018 as compared to 15% in 2017 indicating improvement in inspection outcomes. It means improvement in knowledge, quality culture; strength and capabilities of the Indian pharma have not been enormously improved.

  1. Continuous training of drug inspectors to inspect total quality:

The All India Drug Control Officers Confederation had organized workshops to train drug inspectors across the country. The Central Drugs Standard Control Organization is trying to strengthen Indian regulators through training so that they can match international standards. Around 150 drug inspectors residing in western India were trained at Gandhinagar, so that they improvise inspection skills. Similarly, such workshops were held at different regions across the country.

  1. Developed guidelines for data reliability, investigations, process validation and good documentation practices:

The Indian Pharmaceutical Alliance (IPA), consists of a group of leading Indian pharmaceutical companies such as Cipla, Lupin and Cadila Healthcare, had established a quality forum in May 2015 with the aim of total quality and not only compliance, with the help from McKinsey.

Let the battle be in between of Bottle of lies and Bottle of facts, but let’s not allow to degenerate or skew Indian pharmaceutical perception in the World.

References: 

  1. Pharma conundrums & bottle of lies Ashok Kumar Madan, Health Express, June 11, 2019
  2. India Emerges As Top Five Pharmaceuticals Markets Of The World; Business world, July 25, 2019
  3. IPA Report-The Indian pharmaceutical industry – The way forward; June 2019
  4. Pharmaceutical industry improving inspection skills for better compliance, Business Standard, April 8, 2018

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Digital Therapeutics

controlled by software to prevent, manage, or treat a medical disorder or disease. The components include a pill incorporated with a tracker and a wearable skin patch which transmits pharmacokinetic data of the drug to an app on a device such as the mobile phone. DTx can be used for optimizing the way cancer patients receive chemotherapy or diabetes patients adhere to their prescribed treatments.

Globally the market for DTx is at $0.17bn (2018) and is expected to reach $0.89bn by 2026 at a CAGR of 21.6%. The market in India is looking towards incorporating Digital Therapeutics (DTx) and Cipla is the frontrunner. Cipla has acquired stake in companies such as Wellthy Therapeutics and Brandmed which will enable Cipla to offer digital therapies and real time monitoring to address chronic diseases.

https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/cipla-may-raise-bar-with-digital-therapeutics-push/articleshow/71752197.cms?from=mdr

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FSSAI -Amendments

FSSAI has asked the FBO(Food Business Operator) to revalidate their existing and new products as per the notification dated on 23-12-2016.FBO are required to comply with the order by 1st Jan 2018.Scientific panel carefully considered the several representations received by stakeholders for their inclusion. Some ingredients have not been approved by FSSAI to be included in regulations due to-

  1. Safety
  2. Likely to exhibit properties of drugs
  3. Inadequate data
  4. Safety issue

Since some of the issues are yet to resolve , FSSSAI made following timelines for FBO:

  1. Ingredients and additives approved by FSSAI for inclusion:
    1. According to annexure I, the ingredients/additives which are approved by FSSAI for inclusion are given a time till 30th June 2018 for their reformulation
    2. In case of new permissible limit, FBO are given time for the period of six months from the date of revised/new formulation.
  2. Ingredients not approved by FSSAI for the inclusion due to inadequate data:
    1. The FBOs have given time to submit the data within 4 weeks from the date of issuance. For non- compliance, products containing such ingredients are to be withdrawn from the market immediately.
    2. Meanwhile, As per Annexure II, FBO are allowed to continue the food business of existing products.
  3. Ingredients not approved by FSSAI for safety reasons:
    1. FBO are directed to discontinue food business and withdraw the products containing ingredients namely ‘fluoride’ and ‘Potato protein isolate.
  4. Ingredients not approved by FSSAI since exhibiting drug like properties :
    1. FBOs are directed to discontinue the food business of products carrying drug-like ingredients namely ‘Willow Bark Extract’, ‘Pyrol Quinoline Quinone’ and ‘Lemon Bam’.
    2. For products already manufactured/imported are permitted to be sold till 30th June, 2018.
  5. FBOs are allowed to sell the formulation containing mere combinations of vitamins and minerals only up to one RDA in dosage formats such tablets, capsules and syrups for the period of 6 months or till the further order, whichever is earlier.
  6. As per Annexure lll, with respect to FSDU, FBOs be taken under medical advice are allowed to sell their existing formulations containing vitamins and minerals in food for special dietary uses without referring to the energy value(Kcal/K) for period of six months or till further orders, whichever is earlier.
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New Year Update by FSSAI on banned 14 Ingredients from Appendix I

Through directions issued on 31 December 2018 the FSSAI has clarified its decision regarding 14 ingredients listed under Appendix 1 of the Food Safety and Standards (Health Supplements, Nutraceuticals, Food for Special Dietary Use, Food for Special Medical Purpose, Functional Food and Novel Food) Regulations 2016 (Nutraceutical Regulations).

In continuation of the directions issued previously in June and August 2018, the FSSAI has further decided on the following:

FBOs are allowed to continue to use the ingredient namely ‘Vitamin D3’ from lichen (Cladonia rangiferina) as a veg source in the existing products covered under the Nutraceutical Regulations, till such time the proposed amendment of the Nutraceutical Regulations are finalized and notified.

FBOs are directed to discontinue the use of ingredient namely Raspberry ketone, Silica, Angelica Sinensis, Chlorella growth factor, Chaga extract, Tea tree oil (Melaleuca alternifolia) in the products covered under Nutraceutical Regulations with immediate effect as no additional information has been provided by the applicant. No further manufacturing of products containing these ingredients is allowed. However, any such products containing these ingredients which are already manufactured/ imported under the aforesaid regulations before 29 June 2018 are allowed to be sold only up to a period of 30 days from the date of this direction.

FBOs are directed to discontinue the use of ingredients namely ‘Oxalobacter Formigenes’in the products covered under the Nutraceutical Regulations with immediate effect since they exhibit properties of a drug and no further manufacturing of products using these ingredients is allowed. However, any such products containing these ingredients which are already manufactured/ imported under the aforesaid regulations before 29 June 2018 are allowed to be sold only up to a period of 30 days from the date of this direction.

FBOs are directed to discontinue the use of ingredients namely Paullinia cupana(Gaurana), Saw Palmetto, Notoginseng, Pine bark extract from Pinus radiata, Pine bark extract from Pinus pinaster in the products covered under the Nutraceutical Regulations with immediate effect due to lack of adequate data such as history of safe usage in India for 15 years and also the specific advantage of these plants over the already listed India plants/ botanicals. No further manufacturing of products using these ingredients is allowed. However, any such products containing these ingredients which are already manufactured/ imported under the aforesaid regulations before 29 June 2018 are allowed to be sold up to a period of 30 days from the date of this direction.

Based on the clarification provided by FBO that phytavail iron is mustard powder from Brassica juncea, which is already covered under Schedule IV of the Nutraceutical Regulations, it has been decided that no specific inclusion is required and the ingredient mustard powder can be continued to be used in products covered under the Nutraceutical Regulations subject to compliance with the aforementioned regulations.

Further, FBOs are allowed to continue the food business of existing formulations containing mere combinations of vitamins and minerals only up to one RDA in dosage formats such as tablets, capsules, and syrups for a period of three months from the date of this direction or till further orders whichever is earlier.

Reference:

https://foodsafetyhelpline.com/2018/08/fssai-issues-new-directions/

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Selling Wellness

Throughout the world, marketers are becoming more focussed on health. Be it energy, auto, chemicals or food, the focus is shifting to health and sustainability. Greater thrust on non-fossil energy sources, or cola majors moving from traditional beverages to health-based foods and beverages, are visible signs of the shift.

Pharma companies the world over, as also in India, are not far behind. Most are diversifying from chemical-based medicines into nutraceutical and wellness products. Today, most major Indian pharma companies have a nutraceutical or wellness division that produces supplements, ayurvedic & herbal products, fortified foods & beverages, functional foods, probiotic foods, energy drinks, etc. Research has shown that nutraceuticals are good for prevention of diseases, post-disease recovery, curbing deficiencies, supplementing nutrients and minerals, and better management of lifestyle diseases such as obesity, diabetes and cardiovascular diseases. Thus, nutraceuticals reduce the ill-effects of consuming pharmaceuticals. The companies are pitching for nutraceutical products with allopathic doctors too.

The awareness about the benefits of nutraceuticals is growing fast. Within a short span of 10-15 years, the annual domestic nutraceutical market has grown to Rs 30,000 crore, compared with the Rs 1,30,000 crore pharmaceutical market. According to Assocham, the nutraceutical market is expected to cross Rs 1,15,000 crore in the next 7-10 years. In addition to pharma companies, pure play domestic and international nutraceutical companies would also like to participate in this market with their unique plant-based products.

As these products are regulated by the Food Safety and Standards Authority of India, pricing is not an issue. There is also no person like a medical professional to take decision on behalf of a consumer and each person has the liberty to choose what he or she wants.

New Models in Digital Era

There will be a splash of online business models. We anticipate successful tie-ups between nutraceutical companies and established teams of nutritionists and dieticians for guiding consumers on the nutraceutical intake. We will also see start-ups becoming active with their apps and gadgets. Subscription-based models are expected to meet success and there will be specific packages for specific illnesses/conditions. Some of the models are as follows.

Wellness clinic model: Here, at a fixed rate of, say, Rs 3,000, a person will be able to take a package of benefits that includes nutritionist visits, health check-ups, diagnostic tests, disease management awareness programmes, etc.

Push model: The customer will be able to visit a nutritionist/dietician for six months by paying a subscription fee.

Conversational model: A customer will be able to converse with nutritionist/dietician through an app by paying a monthly amount.

Instant visit model: You could visit a nutritionist without waiting by paying a monthly subscription fee.

New Models in Digital Era

There will be a splash of online business models. We anticipate successful tie-ups between nutraceutical companies and established teams of nutritionists and dieticians for guiding consumers on the nutraceutical intake. We will also see start-ups becoming active with their apps and gadgets. Subscription-based models are expected to meet success and there will be specific packages for specific illnesses/conditions. Some of the models are as follows.

Wellness clinic model: Here, at a fixed rate of, say, Rs 3,000, a person will be able to take a package of benefits that includes nutritionist visits, health check-ups, diagnostic tests, disease management awareness programmes, etc.

Push model: The customer will be able to visit a nutritionist/dietician for six months by paying a subscription fee.

Conversational model: A customer will be able to converse with nutritionist/dietician through an app by paying a monthly amount.

Instant visit model: You could visit a nutritionist without waiting by paying a monthly subscription fee.

Other Gimmicks for Marketing

Virtual Reality (VR) & Augmented Reality (AI): There will be an opportunity for brand owners to be closer to consumers through VR headsets and make it a more engaging, interactive and personal experience. AR can help with blending of virtual objects such as brand image into something full of movement and wonder.

Phygital Marketing: In phygital, or physical + digital, a brand interacts with a customer in a physical location. Digital enhances the physical experience.

Referral & influencer marketing: A lot of nutra companies will use influencers to promote products on social media.

FMCG model: There will be promotions using coupons, contests, gifts.

Public relations (PR) & user generated content (UGC) marketing: Analysts predict good growth through PR and user generated content such as comments, reviews and images on social media. According to the Nielsen Consumer Trust Index, 92 per cent consumers trust UGC more than advertising as the former is not paid.

Multi-level marketing: The traditional Amway method is here to stay

Online marketing: Leverage of the good old online marketing through e-mail, social media, display advertising and search engine optimisation.

The writer is CMD, Interlink Marketing Consultancy, and Hon Secretary, HADSA

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Application of Hyper Personalization in Pharma

Today’s era is ruled by customers and because of their smart networking skills they are termed as hyperconnected customers. With digitization the limitation to gain knowledge and information from various sources has ended and this has empowered customers to make better choices for themselves.

Thus, the industry has entered a phase whereby organizational metrics of success will de dependent on their alignment with customer success metrics. Well, this is supported by our user-friendly Internet, that has created irreversible networking system, accelerating globalization with technological outburst.

With growing opportunity there comes many challenges for marketers to address their message efficiently across wide categories of customer groups with fragmented data of customer experience. Thus, the biggest challenge for marketers is to connect dots and reflect accordingly. To assure no one moves your cheese, differentiate your brand and make it stand elegantly.

Some highlights to make you realize the importance of personalization,

Figure.1: Facts of personalized marketing

Let’s know more about Hyper personalization… it is customer marketing but targeting specific needs. It is advanced marketing where it leverages artificial intelligence (AI) and real-time data to supply more relevant content, products, and service information to every user.

Journey of Hyper personalization as a whole is intense personalization. Applying it to Pharma industry whereby we are stuck at segmentation… is at basic level of Hyper-personalization. Beyond segmentation is behavioral recommendations, omnichannel optimization and predictive personalization.

Top brands like Amazon, Starbucks, Netflix have reached to level of predictive personalization whereby AI & Machine learning analyze our day to day data points which is known as “Big data” comprising of host of factors to power recommendation engine. They have access to data points such as name, requirement, average time spent on search, purchase history, favored brands, etc. using this, they craft a highly personalized email showing you relevant items.

Unknowingly, Pharma industry is moving towards personalization, whereby wearables, ingestibles, implantables are assisting in monetizing disease management programs at individual level. The model that helps us to do so is Ecosystem model. Ecosystem model allows you to focus on customer needs and help you to understand patient engagement, multi-channel and omni-channel communication strategies, sensors combined with patient data to predict future specific conditions are moving towards hyper personalization. What we need is to tap data points, whereby health data which can be actually termed as “Big Fit data” which will help us to deliver personalized solutions.

So, writing on the wall to Accept Reality, Reimagine & Transform IT & AI skills.

 

Author:

Dr. R B Smarta- CMD Interlink Marketing Consultancy

Ms. Titiksha Shinde- Associate Consultant- Interlink Marketing Consultancy

 

References: https://webengage.com/blog/hyper-personalization-marketing-future/

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Healthy living in New Year, as nutraceuticals sell more than pharma products

Nutraceuticals, which consist of vitamins and minerals, protein supplements, energy drinks and growth supplements, have clocked higher growth than prescription drugs

Year 2020 augurs well for the health conscious, as Indians are increasingly opting for preventive healthcare to stay fit rather than waiting for diseases to take over and then start treatment, say experts.

Nutraceuticals, which consist of vitamins and minerals, protein supplements, energy drinks and growth supplements, have clocked higher growth than prescription drugs. “Now the trend is that 60 per cent of doctor prescriptions include health and nutrient supplements. While pharmaceutical sales are growing in India at just above 10 per cent for the past couple of years, the nutraceutical and wellness market is growing at close to 20 per cent a year, which shows the Indians have become more health conscious and awareness is growing,” said Dr RB Smarta, chairman and managing Director, Interlink marketing consultancy and honorary secretary, Health Foods and Dietary Supplements Association (HADSA).

With more disposable income at hand and rising awareness on healthcare among the urban community, numerous people are opting for a healthy living. The trend of wearable and electronic devices to measure health parameters and mushrooming of gym and weight management centres are helping boost sales of nutraceuticals, he says.

According to a vision 2022 document on the Indian nutraceutical market by industry organisation Assocham, in association with its knowledge partner RNCOS, the Indian nutraceutical market is poised to grow from $2.8 billion in 2015 to $8.5 billion by 2022. If India accounted for a share of around 2 per cent of the global market in 2015, it is poised to become 3 per cent by 2022. Dietary Supplements, which include vitamins and minerals (40 per cent), proteins (22 per cent), and others such as herbal supplements (32 per cent), constitute about 65 per cent of the Indian nutraceutical market. That segment is growing at over 16-17 per cent per annum.

Vitamin and mineral supplement sales in India were valued at about $0.7 billion in 2015. It is growing at a compounded annual growth rate of over 16.8 per cent to $1.3 billlion in 2019 and to $2.1 billion by 2022. Prominent dietary supplement makers in India include companies such as Himalaya, Dabur, Parry, GSK, Abbott, Zydus Wellness and Piramal. Many drug companies now have a separate division for selling nutraceuticals or wellness products.

“Many specialists such as diabetologists, nephrologists, gynaecologists and oncologists mostly write vitamins and minerals as part of the treatment protocol,” notes Dr Smarta, as another reason for the growth of nutraceutical sales.

Functional foods include food products such as functional biscuits, breads, cereals, vegetable oil, nutrition bars, yogurt and others. Functional beverages that include functional fruits juices, milk, tea, coffees, and energy drinks are growing at 18 per cent. Prominent companies in this segment include ITC, Amul, Dabur, Britannia, Kellog’s, Nestle and Coca-Cola, says the report.

It also says in terms of application, nutraceuticals are mainly consumed for nutritional deficiency (51 per cent), muscle building (30 per cent), weight management (15 per cent) and other uses.

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Student felicitated for perception studies of herbal medicines at ‘Insight 2018’

Atul Prajapati, a healthcare management student won gold medal for the best ‘live project’ at the recently concluded ‘Insight 2018’ annual pharma conference held recently in Mumbai. The gold medal was instituted by leading pharma consultancy firm Interlink.

Atul won the gold for a project to find out perception of chemists and consumers on herbal medicines. He has also carried out preferences for wound cleansing and generate awareness on newer molecules.

‘Insight’ is an annual conference on pharma and healthcare organized by Mumbai-based education group IES. It aims at inspiring the young budding professionals by providing an insight into the current pharma and healthcare scenario.

“We have been instituting the medal for the past four years at Insight. It will be a source of encouragement for ICS MCRC students who have excelled in the Live Project. There is a dearth of quality professionals in the pharma and healthcare industry in the country today. The industry and academia should encourage more such competitions, which could be good opportunity for spotting the right talent,” said Dr RB Smarta, managing director, Interlink.

Among its varied consulting roles in areas including branding and due-diligence, Interlink has also been instrumental in providing skills-related training to pharma professionals, customized to the needs of the industry.

Insight 2018 puts forth the perspective of patient care, patient delivery and patient monitoring in healthcare followed by panel discussion by industry experts.

According to Dr Smarta, time is ripe for the industry to move into a patient oriented paradigm from a product oriented one. This will help in improving the quality of a patient’s life along with achieving positive clinical outcomes at a realistic economic expenditure, he said. Modern data-based technologies help in achieving effective patient monitoring and thereby good patient compliance, he observed.

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