A pharmaceutical distribution business is a company that specialises in the distribution of pharmaceutical products, such as prescription and over-the-counter drugs, to pharmacies, hospitals, and other healthcare providers.
The pharmaceutical industry in India is one of the fastest growing in the world. The industry is the third-largest in terms of volume and the thirteenth-largest in terms of value. India produces about 15% of the world’s generic drugs. It is estimated that more than 70,000 drug formulations are produced in India and more than half of them are exported to more than 200 countries.
Medicine distribution is highly fragmented, with over 20,000 players in the market. The top 10 players account for more than 50% of the total market share. India is also the leading bulk drug manufacturer in the world, producing bulk drugs for the global market.
India is the largest producer of generic drugs in the world and the country is now a leader in the production of active pharmaceutical ingredients (APIs).
Did you know: India is the world's largest producer of generic drugs and the third-largest in terms of volume?
Medicine Distributionship in the Pharmaceutical Supply Chain
The role of the pharmaceutical distribution system is essential in ensuring the availability of quality medicines to the public. It is a complex system that involves many actors, such as manufacturers, wholesalers, retailers, and pharmacists.
Also, it takes care of the following factors:
1. Right Drug
The distribution system ensures that the right drug reaches the right patient at the right time and at the right place.
2. Connecting Various Actors
The distribution system plays a crucial role in the pharmaceutical supply chain by connecting the various actors involved in the process. It is responsible for the timely delivery of medicines to the market, as well as for the government’s regulatory requirements.
3. Availability of Medicines
The distribution system also helps to ensure that medicines are available in the correct quantity and quality.
4. Storage and Handling of Medicines
The distribution system is also responsible for the storage and handling of medicines. It ensures that medicines are stored in a safe and secure environment and are handled according to the manufacturer’s instructions.
5. Minimising Wastage
The distribution system also helps to minimise wastage and minimise the cost of medicines.
6. Proper Labelling of Medicines
In addition, the distribution system helps to ensure that the medicines are properly labelled and that the manufacturer’s instructions are followed. This helps to ensure that the medicines are safe and effective for use. The distribution system also helps to ensure that medicines are distributed promptly.
Factors Driving the Growth of the Pharmaceutical Distribution Business in India
The pharmaceutical distribution business in India is growing exponentially due to several factors. These include an increase in the population, a rise in healthcare spending, the availability of generic drugs, the growth of e-commerce, and rising disposable income. All of these factors have created opportunities for pharmaceutical distribution businesses in India. Let's discuss five of these factors in detail.
1. Growing Population
India is the second most populous country in the world, with a population of 1.3 billion. This large population requires more and more drugs and medicines to be supplied to meet the medical needs of the population. This leads to more opportunities for pharmaceutical distribution businesses in India.
2. Increased Healthcare Spending
With the government of India increasing spending on health and social security, there is an increased demand for medicines, drugs, and pharmaceutical products. This increased demand opens up new opportunities for pharmaceutical distribution businesses.
3. Increasing Availability of Generic Drugs
With the rise in the availability of generic drugs, the cost of medicines has gone down significantly. This has led to an increase in demand for generic drugs, which has created new opportunities for pharmaceutical distribution businesses in India.
4. Growth of e-Commerce
The growth of e-commerce in India has led to an increase in the number of online pharmacies. This has opened up new opportunities for pharmaceutical distribution businesses in India, as they can now reach a wider customer base and deliver medicines to their doorsteps.
5. Rising Disposable Income
With the increase in the disposable income of Indian households, there is an increased demand for medicines and drugs. This has created new opportunities for pharmaceutical distribution businesses in India, as they can provide medicines at competitive prices and deliver them to customers’ doorstep.
Challenges Faced by Pharmacy Distributorship
The pharmaceutical distribution market in India is a rapidly growing and evolving sector. In recent years, there has been an increase in the number of players in the market, and the sector has seen significant changes in terms of technology, regulation, and investments. This has created both challenges and opportunities for the market, and it is important to understand both to ensure the success of this sector.
The following are the challenges faced by pharmaceutical distributors in India.
1. Challenges with Drug Quality
The quality of drugs especially in the unorganised distribution sector continues to be a major challenge in the Indian pharmaceutical market. The presence of counterfeit drugs, substandard drugs and the unethical practice of selling expired drugs has led to a lack of trust in the system.
This has led to an increase in the rate of drug withdrawals, legal actions and even a decrease in the sales of drugs in the market.
2. Lack of Regulatory Control
The lack of strong regulatory control has resulted in the infiltration of counterfeit drugs and substandard drugs into the Indian market. This has led to a decrease in trust and confidence in the Indian pharmaceutical industry.
This has also led to a decrease in the sales of drugs as people are not sure of the quality of the drugs they are buying.
3. High Cost of Distribution
The cost of distribution in the Indian pharmaceutical market is very high. The high cost of transportation and the presence of multiple middlemen, it has led to an increase in the cost of drugs and also led to a decrease in the profit margins for the companies.
4. Low Availability of Drug
Due to the presence of multiple middlemen in the distribution chain, there is low availability of drugs in the market. This has led to a decrease in the sales of drugs as people are unable to find the drugs they require.
5. Poor Infrastructure
The infrastructure in India is not up to the standard required for the efficient distribution of drugs. The lack of proper roads and inadequate storage facilities has led to an increase in the cost of transportation and storage of drugs.
Opportunities in Pharmacy Distributorship
The following are numerous opportunities available for the growth and expansion of the pharmaceuticals distribution business:
1. Use of Technology
The use of technology in the pharmaceutical market has increased significantly in the past few years. The introduction of mobile apps, online ordering systems and automated inventory management systems have improved the efficiency of the distribution process. This has also led to a decrease in the cost of drugs.
2. Increase in Private Companies
The presence of private companies in the Indian pharmaceutical market has led to an increase in competition and also led to a decrease in the cost of drugs. The presence of companies such as Cipla, Ranbaxy and Sun Pharma, has contributed to an increase in the quality of drugs in the market.
3. Increment in Government Spending
The government has been increasing its spending on the healthcare sector. The increased spending has led to an increase in the availability of drugs in the market and has also led to a decrease in the cost of drugs.
4. Increase in Investment
The presence of foreign investors investing in the Indian pharmaceutical market has led to an increase in the number of companies. This has also led to an increase in the quality of drugs.
5. Expansion of Market
The Indian pharmaceutical market is expanding at a rapid pace. The presence of new players in the market has led to an increase in the availability of drugs. This has also led to an increase in the sales of drugs.
Emerging Trends in the Pharmaceutical Distribution Market in India
The pharmaceutical distribution market in India is witnessing several trends that are transforming the industry which is as follows:
1. Focus on Improving the Supply Chain
One such trend is the increasing focus on improving supply chain efficiency and visibility. The major players in the market are using advanced technologies such as the Internet of Things (IoT), artificial intelligence (AI), and blockchain to track and monitor the movement of drugs and medical devices.
Additionally, the market is witnessing an increasing demand for digital solutions for inventory management, order management, customer relationship management, and sales force automation.
2. Focus on Customer Centricity
Another emerging trend in the market is the increasing focus on customer-centricity. The major players are focusing on providing better customer service and personalised experiences to their customers. Additionally, they are focusing on setting up customer-centric policies and systems to ensure better customer satisfaction.
Furthermore, the market is witnessing an increasing demand for value-added services such as credit facilities, cold chain logistics, and product customisation.
Future growth prospects for the pharmaceutical distribution market in India look promising. With the government of India taking initiatives to improve the healthcare sector, the market is expected to grow at a steady pace in the coming years.
Additionally, the market is also expected to witness an increase in the use of technology and digital solutions, which will further improve the efficiency of the distribution process. The pharmaceutical distribution market in India is expected to continue to grow in the future and offer lucrative opportunities for players in the market.
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