E-distribution network and Eretailing of pharmaceuticals in India

Presented by Tariq Ahmed Khan Roll no.49 MBA pharm tech 4th yr Div A

Current scenario of the Distribution Network

The pharmaceutical industry is growing at the rate of 13% which is currently amongst the highest growth rate. The pharmaceuticals has tremendously in the past three decades.

Problems with the current distribution network

Problems with the current distribution network

Over production of drugs Actual Demand of the drug remains unknown. Additional cost due to infrastructure. Addition of middle components which is unnecessary. No transparency in data generated. Addition of Spurious drugs in the network. Sales pipeline flooding and over pushing of product. Credit risk Returns Damaged goods Losses on counterfeit and/or gray market goods that are discovered in the channel. Distribution costs. Saleable returns time

E-distribution model
Adoption of model to curb issue of unwanted expenses in terms of infrastructure. Efficient management of supply chain management. The component in the system will be linked to each other electronically instead of manual linkage.

Advantages of E-distribution model

Reduction in time is achieved Reduction in counterfeit drug products Better inventory management PUSH and PULL STRATEGY through early discounts. Standardized and transparent system Savings on tax due to implementation of IT Saving on infrastructure. Reduction in middle components

Retailing of pharmaceutical in india

Exists in two forms: organized and unorganized retailing. Pharma accounts to 15% of total retail in India. Retailers reap benefits on all the products. Enjoy a profit margin of 50-300%. Availability of prescription drugs easily to public for abuse.

E-retailing buisness model 1

E-retailing buisess model 1

Advantages 1. The major advantage that E-retailing has is that of the competitive prices which are offered. 2. The drugs are genuine and offered at a much discounted rate than what we get in a retail shop. 3. Drugs which are usually not available in retails are also available to the customer. 4. Biopharmaceuticals which require critical attention are provided to customers keeping the storage conditions in mind not allowing it to deteriorate. Disadvantages: The disadvantage of this model is that it is applicable in India only to the urban population. The rural India is not applicable as it is still in the developing phase. There is a mindset of people about online transactions being fraudulent

E-retailing buiness model 2

ADVANTAGES OF THE MODEL Transparency which will be achieved in the number of prescription and sales of the drugs. The patient or customer will have the benefit of placing order on a centralised website and receiving the order on time. This model will be designed nationally but will serve locally. The benefit would be of the person owning the network and servers and website through which on every prescription the person shall earn 10-15% of the amount as well as earn royalties and subscription charges from manufacturers, stockist and retailers. The company owning the network may also charge the manufacturers for the real time reports and daily sales report that is generated by their products and competitors product. The track of physician and drugs he prescribe will also be taken care off. DISADVANTAGES OF THE MODEL Though advantages are many the major disadvantages is that being radical in nature it wont have much of acceptance. The model has chances to fail in the Indian scenario. There wouldnt be much support generated from the retailers and the physicians to implement such a radical change.

Conclusion
The models presented are radical innovation and hypothesized ideas. The solutions given in the paper are hypothetical and if implemented will lead to greater savings in costs employed by the components in distribution network. Implementation of Electronic models is possible but the implementation should be phased. The models will have low acceptance but once implemented, will change the retailing and distribution in India.