Growth figures in the Indian pharmaceutical market place are no longer fascinating. Approximately 16,000 brands with a total market size above Rs.20 crore giving an average brand size of Rs.1.32 crores and an understandable growth rate of less than 10 per cent gives a clear idea of a plateauing phase in the Indian pharmaceutical industry.

A shift in thinking and a need for a new business approach is the inevitable need of the hour for both Indian companies and multinational companies (MNCs) operating in India. Poor strategies compounded by many imitations of similar, if not same, strategies has led to poor toplines and poorer bottom lines. The reasons are not many but the impacts are powerful.

There is a clear perception that the number of new products which have done well or have the future potential have declined considerably.

Many molecules from MNCs are facing expirations in a short time.

There is an increased number of imitation brands for any molecule at the time of market entry.

A major issue affecting the industry is that there are frequent interventions by the government on formulation and bulk drug prices.

A narrow range of therapeutic categories with a two-digit growth rate forces maximum number of companies to concentrate on minimum number of market segments leading to an explosive growth of brands for the same molecule.

Naturally this has led to all companies wanting a quick growth attacking a limited number of trend setters and core prescribers-with Customer Relationship Management (CRM)-by way of sponsorships of different kinds -as the quintessential marketing mantra.

Another issue is the attrition or organized poaching offshoots of exploitation which creates difficult market situations. This results in the same limited number of staff shifting from one company to another with no value addition to either.

Major companies have resorted to MNC consultant companies for Business Process Redesign (BPR) or Business Strategies. SMEs try through retired pharma executives. In either case, the change that gets suggested by them is either badly received or implemented by the rank and file of the company.

Added to all this is the ushering of the era of out sourcing, leading to the development of cottage industry in pharma manufacturing.

Out sourcing also has fuelled the price war that was already maligning pharma marketing abilities in India. Price wars have converted the "street smart" strategy to street fights."

Healthy competition has become filthy competition. Unhealthy demands or servicing has lead to unhealthy customer psychographics.

Another woe that affects the pharma industry is poor receivables from the trade, whose difficulties are sometime genuine and sometimes viewed as an exploitation of the company's difficulty in achieving a decent top line to satisfy stakeholders' expectations.

The Indian generic pharma market, which is different from international markets, added to the exaggerated trade demands. All these lead finally to poor top lines much to the chagrin of professionals and poorer bottom lines to the frustration of entrepreneurs. The focus of the hour seems to be speedy growth, adequate capitalization, tighter cost control, better employee retention and achieving a high degree of killer outlook.

The commonest platform for speedy topline is price-cutting and price-cutting only. Price cutting is followed by customer purchase under the garb of CRM. In fact today's medical representatives and managers are miserably lacking in product knowledge and selling skills. Technology development has not brought about strategy development. "The Customer has changed.

Will the companies change?
The time has come to learn salesmanship from the customer"

- (The author is vice-president (Marketing), Bal Pharma Limited.)