Despite a low share in the Indian pharmaceutical market, foreign multinational drug companies have inched past their domestic counterparts in terms of brand sales.
Of the 25 top medicine brands by sales last year, 13 were from the stables of global drug majors such as GSK, Pfizer, Novartis and Ranbaxy (a subsidiary of Japan’s Daiichi Sankyo).
The achievement is more significant because multinational companies (MNCs) account for just over 20 per cent share of the Rs 65,000-crore Indian drug market.
A recent report of market research entity AIOCD AWACS reveals that the brand-building exercise is fast becoming more evident in a predominantly generic Indian medicine market.
“MNCs’ efforts in brand building clearly stand out in comparison to those of Indian companies,” Hari Natarajan, head, Pharmatrac said.
The top-three brands by sales in the domestic pharmaceutical market in 2011 were antibiotic Augmentin (GSK), cough syrup Corex (Pfizer) and anti-diabetic Human Mixtard (Novo Nordisk).
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“The Indian pharma industry sustained its performance in 2011 with a host of introductions, upward price revisions and an encouraging contribution from existing products, with increasing levels of association for brand–customer relationships. This resulted in building of brand identity at the marketplace,” Natarajan said. The market shows an upward trend over three years, with a growth of 15 per cent for 2011, he adds. Voveran (Novartis), Revital (Ranbaxy), Calpol (GSK) and Januvia (MSD) were other leading MNC brands that made to the list.
Incidentally, Januvia enjoys a product patent and, hence, has no generic competition in India.
The Indian Pharmaceutical Alliance (IPA), the association of 18 leading domestic players, however, felt the brand dominance did not mean increasing MNC share in the domestic drug business. Ranbaxy, which has been listed among MNCs, continues to be an IPA member, despite Daiichi holding a majority stake in it.
“In the last five years, foreign multinational drug companies had been trying to build their business through the limited number of brands they have, while domestic drug makers were focusing on introducing new generics into the market. Since the focus was different, Indian companies might not have had too many brands in the top list; but on the basis of product introductions, they were much ahead of MNCs,” IPA Secretary General D G Shah said.
Experts differ on the view that the Indian drug industry is moving towards a brand-dominated market. “As the Indian market has intense competition, with many similar products selling, as well as many different tactics being explored to procure prescriptions from prescribers, a good brand-building environment based on proven branding principles becomes a challenging task,” Interlink Consultancy Managing Director R B Smarta said.
According to Smarta, four major areas — intense competition, discontinuity of medical representatives due to higher attrition, non-availability of time of prescribers (doctors) and a longer time period needed to establish a brand — are the major challenges in India when it comes to building brands.
“Wanting insights for targetting, segmentation and positioning is another major reason. As many brand managers do not get time due to handling of multiple brands, products and molecules and customer insight studies suffer. Building and developing target customers becomes a challenge for internal brand stakeholders,” he explains.
There are not many new entrants in the top brand list. “Niche brands have come up, but those cannot provide volumes of the first 25 or 30 brands. Hence, you do not observe any significant change in the list of top brands”, Smarta feels.