Previous

Page - 8

Accessibility

Current Status

India Markets are divided into Tier 1 and Tier 2. Tier 1 contributes to around 60% of sales whereas Tier 2 markets account for 40%. Neraly 45% of the market growth in the next decade will take place in Tier 2 cities.
Rural markets will account for 27% and Class II, III and IV will be remaining 18% (McKinsey Report). A homogeneous model is very much unlikely to work in both Tier 1 and Tier 2 markets as the infrastructure facilities and the financial returns differ significantly. Therefore, companies need to vary their products, pricing, sales & distribution, infrastructure, etc., according to achieve suitability. Over 70% of pharmacy outlets are in five states, which comprise only about 30% of India's population. They are Tamil Nadu, Maharashtra, West Bengal, Karnataka and Punjab. There is a completely skewed penetration of pharmaceutical stores in the country. Rural areas show significant opportunity for pharmacy retail but the format there cannot be the same as in urban areas. The consumer in these areas simply wants to buy the product. Hence, the format will have to be modified accordingly.

Ensuring access must be understood as the processes of making medicines available through regulation, importation, distribution, and safe prescribing and of identifying and removing the barriers that must be locally defined and addressed.

Involving Different Entities in the Rural Set-up

Government: Access to affordable healthcare is a key imperative for the government. Generics need to be promoted and quality control institutions are to be established at regional level. Much will depend on the negotiations of the government with the pharmaceutical industry for reasonable prices of drugs.

NGOs: The population living in the rural area is highly dependent on the services provided by the government, in one or the other village, there may be an NGO working as well. The NGO sector with its non-profit hospitals and dispensaries will do well, if it maintains treatment guidelines and essential drug lists in its institutions. For example, LOCOST (Low Cost Standard Therapeutics) started by contracting the use of spare capacity in the drug industry and later moved into direct distribution to provide affordable medicines to 300 NGOs. Its uses a direct distribution model through NGOs, which is ideal for carrying out the educational component critical to its operations. LOCOST was able to cut costs by eliminating costly marketing campaigns and fancy packaging, as well as middlemen.

Next

* 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.