Pharmacists have finger on pulse of small towns as demand increases

India’s small towns are growing as far as demand for medicines goes, thanks to post-pandemic health awareness, the proliferation of pharmacists, the coverage of government health schemes like Ayushman Bharat, and pharmaceutical (pharma) companies warming up to this segment.

Every year, about 450,000 pharmacists graduate. Of them, 40,000–45,000 have their pharmacies, says Rajiv Singhal, general-secretary, All India Organization of Chemists and Druggists — an umbrella organisation representing 1.2 million pharmacists in the country.

“Pharmacists are going to smaller towns and servicing more pincodes in the hinterland. From Kashmir to Kanyakumari, there isn’t any village or town with a population of at least 1,000–2,000 inhabitants that does not have a pharmacy,” says Singhal.

After the pandemic, people are more regular with their prescriptions and a lot more aware and conscientious when it comes to ailments, he adds.

The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) is another major reason for the growth in demand for medicines in smaller towns.

According to the 2022-23 (FY23) Economic Survey, roughly 43 million hospital admissions (adding up to Rs 50,409 crore) across 26,055 network hospitals have happened under the scheme.

About 154,070 Ayushman Bharat Health and Wellness Centres have been operationalised across India by over-hauling primary health centres in rural and urban areas, which have seen a foot-fall of 1.35 billion people. 

 The centres have also screened 870 million for non-communicable diseases.

Singhal says that prescriptions are generated and medicines sold through government channels or private pharmacies. At any rate, they add to the volume and demand in the hinterland.

According to rough estimates, tier II through tier VI towns represent roughly 21 per cent of the Indian pharma market (IPM).

Pharma companies, too, are not left behind. They are adding a field force that is focusing on tier II and tier III towns.

India’s largest drugmaker by market share, Sun Pharmaceutical Industries (Sun Pharma), says that over the past few years, it has expanded its field force, focusing on tier II and tier III towns.

“Our wider reach is enabling us to accelerate access to high-quality medicines at affordable prices,” says a spokesperson for Sun Pharma.

Rajeev Juneja, vice-chairman and managing director (MD), Mankind Pharma, says, “I have travelled extensively across the country to meet people, our stockists, our salesforce, etc. I have seen this gradual shift in infrastructure — roads, hospitals, electricity. This has ensured more people don’t leave their hometowns for metropolitan (metro) cities. After the pandemic, we have seen people choosing to stay in their hometowns as they now have better prospects.”He adds that with government schemes like Ayushman Bharat, the overall volumes have gone up, but that is not necessarily a lot of incremental sales for pharma companies. However, overall volumes and demand have gone up in the hinterland, he adds.

V Krishnakumar, executive director and chief operating officer of Eris Lifesciences, a company that focuses primarily on the domestic market, says there has been an increase in the number of Doctor of Medicine personnel in smaller towns of late.

“We have 140 points of presence, and from there a medical representative (MR) typically covers up to a 50-kilometre radius in the upcountry, taking our reach to about 300 points, or covering about 85 per cent of IPM. A point of presence is not equivalent to a pincode. For instance, Mumbai is a point of presence but has several pincodes. Similarly, Sangli is a node from where we would cover upcountry,” elaborates Krishnakumar.

Cipla’s MD and Global Chief Executive Officer Umang Vohra recently said in an analyst call after the FY23 fourth-quarter results that the pharma multinational has eight brands in its trade generics business that are over Rs 50 crore in sales and much larger in volume terms.

Trade generics are medicines not sold via the doctor channel (prescription route), but pushed directly to the trade.

Cipla operates India’s largest trade generics franchise, covering tier II and below towns with a network of 5,500 stockists and ministering to 15,000 pincodes.

In a December note, Motilal Oswal said that Cipla was reformulating its strategy in non-metro cities.

“In addition to gaining traction via the trade generics route in non-metro cities, the management is contemplating using MRs to generate business through prescriptions. It is also expanding the therapies within the trade generics segment,” the brokerage had said.

The company, therefore, sees potential for the prescription business in smaller towns.

Motilal Oswal further added: “Cipla is contemplating whether to build its Rx (prescription) franchise in non-metro cities. Given the increased awareness about medicines among the patient pool and its higher reliability on prescriptions, it will utilise existing as well as additional MR resources towards the Rx business in non-metro cities.”