pharma market in rural india
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“India lives in its villages.”
- Mahatma Gandhi
And after so many years, we still wonder – is
there a business in rural markets?
According to census 2011, out of 1.2 billion
Indians, 68.84% live in Rural India.
Rural India is undergoing a tremendous
change – machines are replacing man and
tools and as a result farmers and their families
have a lot of time for non-farming activities.
According to census 2011, 91.21 million
households in rural India have access to
phone, compared to 64.67 million households
in Urban India. Computer is not a magic-box
or a genie for a rural folk anymore. There are
8.64 million households with a computer in
rural India. Internet usage in rural India has
overtaken usage in urban India - more Internet
IS THERE BUSINESS
users in rural India than in urban. TV and dish antennas are common sight in
rural India. 56 millions households have a TV, compared to 60 million
urban households.
Government is aggressively spending for rural development. Active steps
are being taken to improve healthcare. Rashtriya Swasthya Bima Yojna
(RSBY) was launched in 2008. Its purpose is to cover all BPL families with
a health insurance of Rs. 30,000/ (government or private hospital treatment,
no age limit and pre-existing ailments are also covered).
One thousand more PG seats are sanctioned for private medical colleges,
and 4000 more seats are created in existing government colleges. Land
required to open a medical college is being reduced from 25 to 20 acres. To
meet the shortage of teachers in medical colleges, age-bar for faculty posi-
tion is being increased from 65 to 70 yrs. To encourage rural healthcare,
50% PG seats are allocated to doctors working in rural areas.
There is narrowing of rural urban divide due to:
1. Better income from farming
2. Increasing income from non-farming avenues and immigrants
3. Industry projects in rural areas
4. Infrastructure development
5. Increase in literacy and awareness
6. Affordability of technology & white goods
Dr. Surinder Kumar Sharma
IN RURAL MARKETS?
Medicin Man
“According to census
2011, 91.21 million
households in rural India
have access to phone,
compared to 64.67 mil-
lion households in Urban
India. Internet usage in
rural India has overtak-
en usage in urban India.”
MedicinMan August 2012 >>> Lead Article MedicinMan August 2012 >>> Lead Article
Read the complete issue online at www.medicinman.net
Dr. Surinder Kumar Sharma
Income from non-farming sector is increasing. Now
around 50% income in rural India is being generated from
trade, food processing, industry, and money brought back
by emigrants. Better procurement prices for crops, a run of
good monsoons, cash crops, etc. have increased disposable
income. Rural folks are buying cars, flat screen TVs, mi-
crowaves and high-end mobile phones. Rural income is
43% of national income. In terms of absolute numbers dis-
posable income and middle class is more in rural India.
Literacy is improving in rural India - there are 493 million
literates in rural India, 285.4 million in urban.
In spite of its huge potential, as indicated by various pa-
rameters mentioned earlier, rural markets‟ contribution to
pharma remains abysmal; even its growth, over the past
few years, has been suboptimal. What are the factors that
are preventing the rural pharma market to achieve its po-
tential?
Road Blocks
Inadequate Infrastructure
There are gaping holes both in government as well as pri-
vate sector‟s initiatives to create a good healthcare infra-
structure. There are gross inadequacies - be it the number
of hospitals, dispensaries, staff, or doctors (only 1 doctor
per 3000 people in rural area, compared to 2/3000 in ur-
ban). Quacks rule the roost. 60% of rural diseases do not
get treated at all.
Lack of awareness
Lack of awareness towards diseases, even the highly prev-
alent ones, continues. Superstition and belief in witchcraft
is still rampant. Most of folks still believe that diseases are
due to God‟s curse, and have fatalistic attitude towards
health and disease.
Lack of affordability
Many drugs remain expensive. Rural masses have stronger
value for money. A few days‟, or a little, suffering is pre-
ferred to spending money on medicines.
Poor accessibility
Highly disbursed markets make distribution expensive and
a logistic nightmare. Maintaining cold-chain or special
storage conditions is a challenge due to erratic electricity
supply. To establish a dependable distribution system in
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2009 2010 2011 2012
RURAL
CLASS II TO VI
METROS
CLASS I TOWNS
interiors one needs strategic approach, rather than tactical,
as ROI period is long.
What is the way forward?
To develop rural markets, one needs a multipronged ap-
proach, and need to:
1. Improve Healthcare System
2. Create Awareness
3. Provide Affordability
4. Ensure Accessibility
Improving healthcare system
It shall be viewed as a community responsibility and cor-
porations shall take active responsibility. Various steps that
can be taken to develop and robust healthcare system in
rural India are:
1. Partnering with government, NGOs and other key
stake holders
2. Training rural doctors and supporting staff
3. Providing microfinance to doctors, retails, etc. to cre-
ate healthcare infrastructure
Some of the initiatives taken in this area are:
1. MSD India launched Project Transcend, a program to
train GPs on evidence based management of diabetes.
2. Sanofi Aventis‟ PRAYAS - a program to meet rural
India‟s healthcare needs and to bridge the gap by train-
ing rural doctors - plan to train 150,000 doctors across
India.
Creating awareness
1. Educating rural masses about safe and reliable reme-
dies for common ailments
2. Partnering with rural institutions and NGOs
MedicinMan August 2012 >>> Lead Article MedicinMan August 2012 >>> Lead Article
Read the complete issue online at www.medicinman.net
To maintain the tempo generated by
Brand Drift and FFE 2012, MedicinMan will
be hosting the 1st BREAKFAST FOR THE BRAIN on
Friday 7th September 2012 in Mumbai from
0830 AM to 1000 AM.
Where Pharma Business Leaders Brainstorm
BBBREAKFASTREAKFASTREAKFAST
BBBRAINRAINRAIN
Dr. Surinder Kumar Sharma is Head - Strategy &
Business Development, TTK Healthcare Ltd
3. Making use of annuals fairs, weekly haats and man-
dis to spread awareness
Some aspiring initiatives, which have done good to
both company as well as masses are:
1. Novo Nordisk Education Foundation is undertaking
massive diabetes control program that involves
screening, spreading awareness and training doc-
tors.
2. SPARSH, a multilingual helpline for diabetics to
support Januvia and Janumet.
3. NPL had run „Teach more, reach more‟ campaign
to educate masses about epilepsy.
4. J&J‟s Mobile health for mothers helped many.
Providing affordability
1. Making medicine more affordable is very im-
portant. Companies can think of differential pricing
strategy for rural areas, e.g. Microsoft has low pric-
es for its products for students.
2. Rural healthcare insurance can help decreasing the
burden of payment on the individuals
3. Training medical staff for cost effective disease
management may help in establishing trust in allo-
pathic medicines.
Arogya Parivar (Healthy Family), a low-profit social
initiative developed by Novartis, is a good example.
This program is proved to be a commercially sustaina-
ble program.
Ensuring Accessibility
Highly disbursed market and thinly populated area make
setting an effective distribution system a nightmare. Main-
taining cold chain etc becomes very difficult due to frequent
power failures. Various options could be:
1. Company delivery vans
2. Pooling of resources by collaborations between compa-
nies to set up viable distribution channels
3. Developing products suitable for rough storing condi-
tions
4. Mobile clinics and mobile pharmacies
5. Post offices duplicating as pharmacies
Ranbaxy and Pfizer have formalized an alliance with ITC to
penetrate the rural markets for their over-the-counter (OTC)
products.
Traditionally Indian companies, especially mid- & small-
size, have a better penetration in rural and class II-VI mar-
kets. Now multinationals (Indian & foreign) are becoming
more aggressive in these markets. Every other day, there is
news of some or other company hiring to enter into rural
markets. In view of these developments, mid- & small-size
companies need to be proactive to make the most of the new
markets created by these companies and, more importantly,
to protect their current business in these markets.▌
MedicinMan August 2012 >>> Lead Article
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