Indian Pharmaceutical Industry
Model for Sustainable Access & Affordability With Respect to Retail

- by Ramkishan Rajan & M. Salomi Diana *

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As is evident from the exhibit above, the distribution is highly complex. With around 60,000 stockists and over 5,00,000 pharmacies (Health Quotient, 2007) in India, the system is highly fragmented. With distribution accounting for about 35% of the retail cost of the drug (Health Quotient, 2007), the move towards affordability needs to address this issue especially for rural markets.

With the entry of large retailers into the pharmaceutical market, smaller independent retailers will find it difficult to maintain their status-quo especially in urban and semi-urban markets. This further necessitates the need for strategic alliances with stockists from a retailer's perspective also. This is especially true in the OTC market.

Exhibit 4 shows some of the factors contributing to the growth of the OTC retail market.

Exhibit 4: Factors Driving the OTC Market

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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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