Loss of sales due to non-availability of products with chemists has been identified as one of the concern areas facing the pharma industry, according to a study by Organisation of Pharmaceutical Producers of India (OPPI) and E&Y, titled ‘Unlocking the potential of the pharma distribution channel’.
The sales loss varies from 0-1 per cent in metros to up to five per cent in tier-II and rural geographies and is 20 per cent in small brands.
The variation in loss of sales can be attributed to supply chain aspects like its reach, service levels, working capital constraints of stockists, awareness of customers and financial returns to stakeholders, the study said.
A key reason for excess inventories is lack of visibility of pharma companies in stock holding and movement in the post CFA (carrying & forwarding agent) supply chain, it said.
In the current state, visibility of the post-CFA supply chain is limited, and is traditionally through the visits of the sales force to stockists/ retailers.
“With new product introduction driven growth on the wane, effective channel management can be a strategic differentiator for the pharma companies in times to come.
“Channel management is the key to growing the classic brands but what is less understood is the positive impact it has on the ethical portfolio by virtue of improved trade hygiene and focused efforts of ethical sales reps,” E&Y partner Muralidharan Nair said.
OPPI Director General Tapan Ray said, “In pharma industry, sales force plays an important role in demand generation processes and supply chain ensures demand fulfilment. Significant amount of work is being done in improving the deployment and training of the sales force to gain competitive edge in the market place.”
The pharma distribution and retailing is one of the most complex and less understood aspects of the business in India, the study said.