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The Unique Dynamics
The DoctorThe dynamics of distribution of medicines is unlike any other. This is probably the only trade of its kind in which the end-consumer does not decide which brand of item he wants.

Surprising isn't it, but it is true. It is the doctor who decides the product that the patient must consume. The doctor not only chooses the medicine but also the brand of medicine for his patient.

The trading cycle begins with the company that owns the brand. The company either manufactures, the medicines itself or outsources manufacture of the item to some other manufacturer. The medicines reach the retailer through the pharmaceutical distribution channel comprising of one or more dealers. (Click here for more on distribution network)

Due to the nature of these products, the government has implemented a strict regulatory mechanism to prevent their misuse. Only licensed dealers are allowed to buy and sell medicines, with the pharmaceutical distribution network. Different players of the distribution network require different types of licence.

For example, the wholesaler, who handles the bulk movement of the pharmaceutical items, can sell to very limited category of customers, which broadly include another wholesaler, a retailer or directly an authorized prescriber.

Barring a few medicines permitted for OTC (over the counter) selling, the retailer is allowed to sell medicines only to a person carrying a valid prescription from a qualified prescriber (doctor).

Medical Representatives
An important part of the pharmaceutical trade is the medical representatives. A company appoints medical representatives (MR) whose primary task is visit the doctors regularly and keep reminding them about their brands. He also informs the doctor about the new brands introduced by his / her company.

The MR also cordinates between the retailer-wholesaler-distributor to ensure proper availability of his company's products, especially at the retail outlets near the doctors who prescribe them.

The effects of omni-present competition can be seen in this sector also. The different companies are bidding for a greater market share, every body wants to become a market leader. Often, the same formulation is available under multiple brand names manufactured by different manufacturers.

Each brand is vying for the same set of end-consumers, causing a greater number of products to sit-out their entire shelf life on some shelf or the other, leading to a zoom in the amount of goods that expire within the distribution network. This has made expiry management a vital function of the pharmaceutical distribution network.

Product Shelf Life and Expiry
Medicines have a shelf life, generally between 18 to 60 months from the date of manufacture. Each and every item carries an expiry date clearly visible on the packing. The rules of the trade require the company to reimburse the full value of the goods, if the medicines are not used before the prescribed expiry date.

So, in this trade, force selling does not work. If someone manages to force-sell (through schemes or discounts or otherwise) he / she has to be ready to process expiry claims, as the goods are likely to later return into the distribution channel, something that nobody appreciates, leading to disputes.

About 8 to 10 years ago, the quantum of expired goods handled by an average wholesaler used to be less than 1% of his overall turnover. Today, this has grown to as much as 10% for some.
Please consult your physician for before taking any medicine. Discussions on the merits and demerits of the different medicines is beyond the scope of this site.

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