With more than 30 years of history, the pharmaceutical industry in Nepal has come a long way from its crude incipient days, which saw even the domestic medical fraternity turning their back towards the drugs produced by its pharma players, to a prominent player, who produces well accepted quality drugs for a number of diseases prevalent in the region.
The Nepalese pharma market is continuing its growth journey under all disturbed political, legal and social conditions. At present, Nepalese pharmaceutical market is mainly influenced and shared by Indian companies.
The Nepalese government's first-ever serious effort towards developing pharmaceutical industry came in 1972 establishing Nepal Drugs Ltd (formally Royal Drugs Ltd) as a public enterprise. A few other companies were also launched in that period, but because of unprofessional approach and poor technical infrastructures, they could not compete with the Indian or multinational pharma companies. However, the scenario is different now.
After the launch of companies like Nepal Pharmaceutical Laboratories Pvt. Ltd and Simca Laboratories Pvt. Ltd., the Nepalese pharmaceutical industry acquired a new horizon. There was a time when Nepalese products (even an analgesic) were not accepted by the doctors. But time, technology and investment have changed the scenario. Now Nepalese companies produce a number of products under cardiovascular, antidiabetic, antipsychotic and hormones segments, which are well accepted by the medical fraternity of Nepal.
Presently, a total of 265 companies are registered in Department of Drug Administration (DDA). Out of this, around 40 local pharma industries are in a good health and shape, enjoying a robust growth. More over, some of the companies hold a healthy pipeline and are expected to launch their products very shortly.
The rapid strides that the Nepalese pharma industry is making in the networking front are helping the region to expand its access into new markets. The public awareness on diseases and use of drugs are on the rise. The life style of the people is ever changing in urban and sub-urban towns. The increasing number of medical colleges, nursing homes, poly clinics and other institutions are other major factors driving the growth of Nepalese pharmaceutical market.
The total pharma market in Nepal is estimated at around Rs 9 billion with an estimated growth rate of 27 per cent per year. The Nepalese companies are enjoying approximately 35 per cent market share, while the rest is mostly dominated by Indian or multinational pharma companies. If we are to believe available figures, around 7727 brands are prevalent in Nepalese pharma market, which are either produced locally or imported from India and abroad.
At present there are no bulk drug companies in Nepal. Hence, raw materials are either imported from third countries or India depending upon the quantity required.
Drug consumption
A study revealed that Nepalese population mainly depends on allopathic drugs, taking the total consumption to approximately US $127 million. Amoxicillin is the top selling drug from the domestic industry. The study also showed that antibiotics constituted about 30 per cent of the total consumption of drugs.
The study showed that the five top selling allopathic medicines produced by Nepalese pharma players are amoxicillin, vitamin preparations, cough preparations, ciprofloxacin and iron preparations. It was also found that the five top selling allopathic medicines that were imported from other countries comprised Topical skin preparations, Methyl ergometrine, Diclofenac, Vitamin preparations and large volume parenterals.
Out of these domestically produced and imported allopathic medicines, the top selling five are:
● Amoxicillin
● Vitamin preparations
● Topical skin preparations
● Cough preparations
● Diclofenac
Consumption of antibiotics
Available figures indicate that total consumption of antibiotics in 2005-06 stood at Rs 2 billion. Out of it, the domestic industry contributed 48.7 per cent of the antibiotics sale. Antibiotics like Amoxicillin, Ciprofloxacin, Cefadroxil, Metronidazole + Diloxanide and Ampicillin + Cloxacillin constitute the top five selling antibiotics in Nepalese market.
The study revealed that about 65 per cent of medicines consumption was met through import by public and private sector, while 35 per cent of medicines consumption was met through domestic companies.
Market environment
The pharmaceutical market in Nepal is still an ethical market compared to Indian market. Maximum volume of sales is obtained through doctor's prescription, but at the same time the dominance of chemists cannot be denied.
Presently the pharmaceutical marketing environment in Nepal can be compared with that of India in terms of consumer behaviour. However, in terms of technical advancement, promotion and other inputs, Nepal is a little inferior to India because of lack of desired and accessible resources. Hence, Nepalese companies are not successful in indulging in the better quality trade games. The differentiations with the branded generics are minimum. All these call for developing customer relationship management, aggressive management style and strong and flexible operational methods to achieve success.
Authority
In Nepal, Department of Drug Administration (under ministry of health) is the main government authority, which regulates the registration of companies and brands. Its office is situated at Bijuli Bazaar, New Baneshwor, Kathmandu. It has got branches at Nepalganj, Birganj and Biratnagar. Recently Radha Raman Prasad has been appointed as the chief of this department.
Because of recent DDA policy, which made world health organisation recommended certificate for foreign companies to market their products in Nepal, several of sub-standard companies of Indian origin have to withdraw their marketing from Nepal. This policy has given extra financial load to few of the Nepalese companies, apart from opening export opportunities.
(While Umesh PD Rauniyar is with Nepal Pharmaceuticals Laboratories Pvt. Ltd., Dr R K Srivastava is a marketing consultant from India)