Yesterday I met a pharma distributor. He is really huge – and controls a full state. Just to hide his identity will not reveal which state. He was talking about retail margins in the pharma industry. First of all the ‘billing’ price is far, far below the MRP (which incidentally in India is a fraud). Additionally in a worst case the retailer gets 2-5 strips FREE for the price of 10 strips. The retailer is protected by the retailers association which says (for e.g. in Navi Mumbai) “there shall be no new pharma shop within 100 mts of an existing shop).

What about distributors? Well, distributors divide the companies among themselves. So in say location A distributor Mr. D will have the agency of GSK pharma and distributor Mr. D1 will have Pfizer agency.

What about a hospital buying directly from a pharma company? Well the headache is so great that all the ‘chotta’ hospitals are happy buying from the distributor. Since the client is paying from his pocker it does not matter. In fact you are happy getting a margin on the medicine sold!

Then he regaled me about Goa trips for doctors, Eurpoe trips for gynaecs, laptops, petrol vouchers – for doctors. Then of course the ‘training’ sessions at 5 * hotels, sponsoring monthly meets, pharma meets, …and then of course cold cash! So the distributor, retailer, manufacturer, and doctor are on one side (well most of the time). What happens to the patient? Well I guess he is hoping for a regulator! So we need a pharma regulator (competition my foot), a real estate regulator, a financial services regulator (self regulation by the life insurance industry even thru IRDA looks like a joke – see the recent faux pas on the ‘charges’)…..thank God, God has kept me off medicines for the past 27 years. Man I am blessed. Thank you God, thank you Doctor Sunil Balinge!

By the way, what a day – 9 sep 09 or 09.09.09 – the previous interesting date of our times was 02.02.2002 and 20.02.2002. Of course today is not as interesting, but still sounds interesting. We will of course have 01.01.11 and 11.11.11 …but after that we will not be able to express any other date after that in our times….especially if we decide to use the 4 digits of the year….!

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  1. Fine article Suba, I absolutely agree with you. Today when we (India) are progressing in certain areas; we are are also getting more selfish.

    Sorry to say and feel we are also responsible for all the wrong that is happening around us.

    You are doing your bit by writing articles on financial market,but this one is off the financial market and pretty hitting below the belt of the concerned authorities.

    Keep it up. I am inspired to do my bit.

  2. I agree partly. I frankly do not believe in the “Power of One” – my writing is not going to change anything. Having said that Ayn Rand has a view (very different from Hindu Philosophy) that selfishness is a virtue. Frankly am stuck in between AR and Hinduism! The smart, strong and powerful will score over the weak. This is a fact of life. So an amc will survive longer than the IFA – but the ifa will redefine himself much faster than an organisation. Sebi has to still act on brokers, PMS providers, etc. – and all regulators believe banning cars is the only solution to drunken driving. We can only observe and comment – not impact the change that we went to see as Gandhiji famously said!

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