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Introduction
India is set to witness a boom in the retail business with the Government of India opening up FDI in this sector. The total domestic pharmaceutical industry in India (retail) is about Rs. 5 Billion (Cygnus Business Consulting & Research), and is
conservatively expected to grow at a rate of about 8%. More and more retail conglomerates are taking advantage of the huge growth opportunities especially in the Over-The-Counter (OTC) drugs segment. The entry of larger players like Reliance, Apollo, and Subhiksha among others has prompted a great deal of interest in the sector as well as ensuring genuine quality of drugs in the market. Over the past few decades, the pharmaceutical industry in India has been a glowing example of success as a result of various factors, some of which are: -
Governmental, industrial and public health polices
Tailored intellectual property rights (IPR Laws)
National scientific and technology capability development
Cost effective manufacturing
Proactive responses to domestic and global opportunities
The new IPR regime of product patents and India's movements towards TRIPS compliance poses new challenges, opportunities and concerns for the Indian pharmaceutical industry (Ganguli, 2003). A major hindrance to this position is the existence of the 15-25% sub-standard and counterfeit drugs that are on the Indian pharmaceutical market. Profitable value realization will be possible only if an enabling national environment is created that is conducive to innovation and that catalyses "minds to markets" (Ganguli, 2003). Health care in India is evolving; we are becoming a nation of lifestyle diseases. These require disease or disorder management and not just treatment and medication. India is set to witness sweeping changes in the treatment methods as well as in buying patterns. While the Government funding for Healthcare has been marginal, except at primary health levels, more and more private channels for both hospitals and pharmaceuticals will emerge in various forms and methods.
Overview of Retail Pharmacy
The retail pharmacy industry is quite heavily regulated with restrictions on location and ownership. The increased competition from super-markets and other retailers for OTC drugs has increased the percentage of dispensing sales from 35% of revenue in 1981 to 70% of revenue in 2001 (KordaMentha, 2006).
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* Contributed by: -
Ramkishan Rajan has completed his Bachelor's (Mechanical Engineering) from College of Engineering, Trivandrum, and is a marketing enthusiast with specific areas of interest in Marketing of high technology products and consumer behaviour.
M. S. Diana has done her Bachelor's (Computer Science) from IIT Chennai, and has a strong analytical approach to marketing. Her specific areas of interest include marketing strategy and brand management. She is also majors in operations.
Both are currently students of the PGDM Programme (Batch 2006-08) at IIM Kozhikode.
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