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PROJECT
COMPANY: PIRAMAL HEALTH
CARE
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CONTENT
I. Pharmaceutical
Industry
.05
A. Key elements of the sector.
05
B. Description of the product category and
product.05
II. Business history: Piramal Health Care
Limited.08
III. Market
Research
..10
A. Target
countries
10
1. Primary:
IRAN
..10
2. Secondary:
INDONESIA.
...18
B. Description of
IRAN
10
C. Market conditions in
IRAN
11
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1. Existing
demand
....11
2. Competition
.....12
3. Strengths and weaknesses of the economy-barriers to entry,
etc.12
IV. Marketing
decisions
..13
A. Distribution
strategies
.13
1. Direct
exporting
13
2. Documentation
.15
3. Direct investment, strategic
alliances..
15
B. Pricing
strategy
.15
C. Promotion
strategy
15
D. Product
strategy
..16
V. Legal
decisions
..16
A. Agent/distributor
agreements.
..16
B. Patent
.16
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C. Quality
...16
D. Dispute
resolution
.16
VI. Manufacturing and
operations
.16
A. Location of production facilities for
exports16
B. Capacity of existing
facilities
.16
C. Product modification necessary to adapt to local
environment.16
VII. Personnel strategies: Personnel needed to manage
exports.17
VIII. Financial
decisions
..17
IX. Secondary Market:
INDONESIA
17
X. Market conditions in
INDONESIA
.18
1. Existing
demand
.19
2. Competition
..19
3. Challenges
..19
XI. Marketing
decisions
.19
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A. Distribution
strategies
...19
1. Direct
exporting
..19
2. Documentation
...21
B. Pricing
strategy
.21
C. Promotion
strategy
21
D. Product
strategy
..21
XII. Legal
decisions
21
A. Agent/distributor
agreements
...21
B. Patent
.22
C. Quality
22
D. Dispute
resolution
.22
XIII. Manufacturing and
operations
..22
A. Location of production facilities for
exports..22
B.
Capacity of existing
facilities
..22
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C.
most importantly, it stops you from feeling pain and other sensations during
your operation
Drugs that cause anesthesia work by blocking the signals that pass along your
nerves to your brain. When the drugs wear off, you start to feel normal sensations
again, including pain. Some of these medications work on your whole body. While
some of the medications work directly on the nerves going to parts of your body.
TYPES OF ANESTHESIA
General anesthesia is a state of controlled unconsciousness during which you feel
nothing and may be described as 'anesthetized'. For some operations, general
anesthesia may be the only option for safe care during surgery. In other operations,
general anesthesia may be an alternative to regional anesthesia. During general
anesthesia, anesthetic medications are injected into a vein, or anesthetic gases may
be breathed into the lungs. When these medications are carried to the brain by the
blood, they effectively "numb" the brain, and produce unconsciousness. Other
medications are given to prevent pain and relax the muscles of the body. During
general anesthesia, you may need assistance to support adequate breathing. In this
case, you may have a breathing tube placed after you have fallen asleep. General
anesthesia produces a period of controlled unconsciousness, which is quite different
from sleep, and is also different from unconsciousness due to disease or injury. At
the end of surgery, as the anesthetic drugs wear off, your consciousness starts to
return.
Regional anesthesia is the specialized use of local anesthetic to numb a part of the
body. Regional anesthesia can be used for operations on larger or deeper parts of
the body. Local anesthetic drugs are injected near to the bundles of nerves which
carry signals from that area of the body to the brain. The most common regional
anesthetics (also known as regional 'blocks') are spinal and epidural anesthetics.
These can be used for operations on the lower body such as Caesarean sections,
bladder operations or replacing a hip joint. You stay conscious but free from pain.
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Nerve blocks in the neck or armpit area are used to numb the arm or shoulder for
surgery.
Local anesthesia numbs a small part of your body. It is used when the nerves can
easily be reached by injections, drops, sprays, or ointments. You stay conscious but
free from pain.
Sedation is the use of small amounts of anesthetic or similar drugs to produce a
'sleepy-like' state. It makes you physically and mentally relaxed during an
investigation or procedure which may be unpleasant or painful (such as an
endoscopy) but where your co-operation is needed. You may remember a little
about what happened but often you will remember nothing. This is frequently called
'conscious sedation', and may be used by other professionals as well as anesthesia
professionals. If you are having a regional or local anesthetic, you may want to ask
for some sedation as well. Combining types of anesthesia: anesthetic drugs and
techniques are often combined. For example: a regional anesthetic may be given as
well as a general anesthetic to provide pain relief after the operation. Sedation is
frequently used with either regional or local anesthesia. The anesthetic prevents
you from feeling pain, while the sedation makes you feel drowsy and mentally
relaxed during the operation.
Repeated exposure to halothane in adults was noted in rare cases to result in severe
liver injury.
Relatively low solubility and non pungency make sevoflurane an excellent choice for
inhalational induction.
It is a clear colorless liquid containing no additives. It is an inhalation anesthetic
agent administered by vaporization, for use in induction and maintenance of
general anesthesia in adult and pediatric patients for inpatient and outpatient
surgery. It is a dose related cardiac depressant.
II. Business history
PIRAMAL HEALTHCARE LTD.
Piramal Healthcare Ltd, a Piramal Group company, is a globally integrated
healthcare company that fulfills unmet medical needs across the world. It has a
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Acute-Care
Biotech
Cardiac
Cardio-Diabetes
Consumer Products
Critical Cardiology
Derma
Diabetes
General Medicine
Multi-Speciality
Multi-Therapy
Neuro-Psychiatry
Ortho
Pain-Management
Lab Diagnostics
GLOBAL FOOTPRINT
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Ahmedabad, Gujarat
Morpeth, UK
Grangemouth UK
Torcan, Canada
Rhodia, UK in FY2005
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These strategic alliances have been consistent with the objective of recognizing the
compelling potential of our Global Critical Care business and emerging as a leading
player in this segment. In addition, our manufacturing JV in China in 2008 has
further helped us explore the enormous global opportunity in the critical care
segment.
The GCC product portfolio includes some key brands:
Inhalation anaesthetics
Halothane
Isoflurane
Highlights
Haemaccel enjoys more than 70% share of the world market in Polygeline
based plasma volume expanders
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The urban working class has enjoyed somewhat enhanced status and economic
mobility, spurred in part by opportunities provided by revolutionary organizations
and the government bureaucracy.
Most Iranians are Muslims; 89% belong to the Shia branch of Islam, the official state
religion, and about 9% belong to the Sunni branch. Non-Muslim minorities include
Zoroastrians, Jews, Baha'is, and Christians.
Economic Parameters
Population: 66,429,284 (July 2009 est.)
Population Growth Rate: 0.883% (2009 est.)
GDP (purchasing power parity): $841.7 billion (2008 est.)
Agriculture products include wheat, rice, other grains, sugar beets, sugar cane,
fruits, nuts, cotton; dairy products, wool; caviar
Industries include petroleum, petrochemicals, fertilizers, caustic soda, textiles,
cement and other construction materials, food processing (particularly sugar
refining and vegetable oil production), ferrous and non-ferrous metal fabrication,
armaments
Imports and Exports:
Exports: $95.09 billion (2008 est.)
Exports - commodities: petroleum 80%, chemical and petrochemical products, fruits
and nuts, carpets
Exports - partners: China 18.5%, Japan 15.4%, Turkey 6.9%, South Korea 6.8%, Italy
4.9% (2008)
Imports: $67.25 billion (2008 est.)
Imports - commodities: industrial raw materials and intermediate goods, capital
goods, foodstuffs and other consumer goods, technical services, Inhalation
anaesthesia (Halothane, Isoflurane)
Imports - partners: China 13.5%, UAE 9.8%, Germany 9.1%, South Korea 6.1%,
Russia 5.6%, Italy 5.1%, France 4.2% (2008)
C. Market conditions in IRAN
1. Existing demand: Out of the total demand for the category which was
200,000 bottles, Halothane had the highest share which is 180,000 bottles. The
market share is 95% in the same category for the entire world.
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Market
Import
Hospital
Competito
Market
Halothane
Isoflurane
Sevoflura
ne
Thio- 1 gr
Thio- 0.5
g
Propofol
Potential
80,000
160000
Price in $
13.18
Price in $
15.75
rs
Indirect
Baxter
Minrad
2000
220
300
Abbott
1.4
.80
Sandoz
Sandoz
650000
350,000
300,000
Share
100%
PHL- 67%
Baxter22%
Minrad11%
Abbott100%
Dongkook
Baxter
PHL acquired Minrad this year. After this the market share of Piramal has gone up in
Iran considerably but in Isoflurane category.
3. Strengths and weaknesses of the economy-barriers to entry, etc.:
The following are the setbacks for PHL:
Iran is a very restricted country- Banking being the biggest obstacle. None of
the banks in Iran are recognized in any European Country, United States,
India, etc. So, inevitably getting money out is very difficult. In Iran everything
works on U.S sanctions. Supplying to Iran is not difficult but getting Money
out is difficult. The reason being they cannot open an L/C in India as none of
the banks in India or U.S or U.K recognize any Iranian Bank like Bank Saderat,
Bank Sepah, Bank Mellat, etc. So PHL has a tie up with an agent based out of
Dubai which has an office in Iran.
Clause in Ministry of Health: One cannot supply one product to two different
distributors from the same site of manufacturing. So PHL operates through a
distributor called Dareyan Trading Co. Ltd, which is very strong in the private
market
the documents according to the L/C given to it by the agent. After which the agent
makes the changes in the documents according to the distributor- so there is a lag.
Typically the transit of the product from India to Dubai takes 7 days and from Dubai
to India takes 14 days (shipment). So the product reaches them in 20-25 days but
the documents in back to back L/C take 40-45 days, hence the goods are lying at
the port, the demurrages are being paid.
So what is done is the purchaser opens an L/C with the agent in Dubai and PHL
works on it. The agent and PHL works on D/A terms, it is largely trust based.
The following are the registered Agent and Distributor for Piramal Health Care Ltd.
in Iran.
Halothane
Agent/
Distributor
IPI
Dareyan
Registration
Yes
YES
Site of
Manufacture
Ennore
Digwal
(Hyderabad)
In IPIs case money comes after 8 months of delivery and the supply is from
different site which is Chennai (keeping in mind the clause of MOH)
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In Iran, the influence of Key Opinion Leaders (KOL) makes a huge difference. If one
can tap the top 10 influencers, the business will definitely do well. So convincing
them is important.
There is Corruption as its indirect form of selling.
Dareyan Trading Co. Ltd
The sales force is also in charge of maintaining vaporizers which is the augmented
product to have the core product in place. If this fails the competition comes in and
acquires that customer.
Dareyan has a further network of local distributors who has the logistics in place to
transit the goods further and identify the inventory stock in Hospitals and thereby
supply where ever there is shortage.
So the distribution flow looks like:
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Out of the 400 anesthesiologists in Iran- 10 are the President, Secretary, Vice
President in the Iran Anesthesia Association who if convinced leads to great
business.
D. Product strategy: Banks on the proposition of Fits all pockets
V. Legal decisions
A. Agent/distributor agreements:
There is an agreement document with agents and distributors which has the
following very important factors:
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05-06
110000
06-07
-
07-08
89000
08-09
50000
Economic Parameters:
Population growth rate- 1.136% (2009 est.)
GDP (purchasing power parity)- $914.6 billion (2008 est.)
GDP - real growth rate: 6.1% (2008 est.)
GDP - composition by sector: agriculture: 14.4%, industry: 48.1%, services: 37.5%
(2008 est.)
Agriculture products include rice, cassava (tapioca), peanuts, rubber, cocoa,
coffee, palm oil, copra; poultry, beef, pork, eggs
Industries include: petroleum and natural gas, textiles, apparel, footwear, mining,
cement, chemical fertilizers, plywood, rubber, food, tourism
Imports and Exports:
Exports: 139.3 billion (2008 est.)
Commodities Exported: oil and gas, electrical appliances, plywood, textiles, rubber
Exports - Partners: Japan 20.2%, US 9.5%, Singapore 9.4%, China 8.5%, South Korea
6.7%, India 5.2%, Malaysia 4.7% (2008)
Imports: $116 billion (2008 est.)
Commodities Imported: machinery and equipment, chemicals, fuels, foodstuffs,
Inhalation anaesthesia (Halothane, Isoflurane)
Imports - partners: Singapore 16.9%, China 11.8%, Japan 11.7%, Malaysia 6.9%, US
6.1%, South Korea 5.4%, Thailand 4.9% (2008)
X. Market conditions in INDONESIA
1. Existing demand: 20,000 bottles in 2008-09
HOSPITALS:
Approximately 1,274 hospitals (Indonesian Hospitals Association, an umbrella
organization)
o Government owned = 40.92%
o Military organizations owned = 9.08%
o Private companies = 50%
The extremely popular Indonesian Red Cross or commonly known as Palang
Merah Indonesia is a non-profit organization that owns a general hospital in
Bogor located in West Java
Indonesian Hospitals Association:
o Works in collaboration with the government of Indonesia to promote
national health care programs
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IHA STRUCTURE:
2. Competition: Aventis had halothane last yr old stock which they were
disposing off now Piramal is the only one in the market and hence a market
leader in the molecule.
There is no other company manufacturing this molecule. Hence no direct
competition.
But Isoflurane Baxter, Abbott, Minrad is eating up halothane market as
they are better substitutes. PLC is towards a decline.
3. Challenges include the lack of awareness among the Anesthetists about
the availability of 3 molecules in the segment.
XI. Marketing decisions
A. Distribution strategies
1. Direct exporting: The Importer for Piramal Healthcare in Indonesia is Dexa
Medica
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Laws are that the importer cannot directly be the distributor .There has to be
another country distributor to supply to the Hospitals.
Exception:
But if a company registers itself and sets up office then it can carry on
marketing activities.
E.g.
Abbott can market their product in the country as they have set up an office.
Dexa Medica has evolved from a small company established in 1969 to one of
Indonesias largest ethical pharmaceutical companies at the beginning of the
21st century and has become a prominent, well-respected player in the
domestic pharmaceutical market.
Providing better health care by applying expertise was the foundation on
which its founders built this Company. Honesty, trust, dedication and
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Dexa had a contract with Rodia which was acquired by Piramal in 1995 hence the
contract with Nicolas.
A Typical Order Process in Indonesia:
Nicolas team discusses the budget and stock situation with the Dexa purchase team
-what is the order situation after discussing with domestic team as per the forecasts
in Indonesia and send a PI- Dexa raises a purchase order in Nicolass name -Nicolas
teams checks if the shipment terms ,payment terms are in place signs & sends
after approval scanned copy for their records -Export team checks the time of
arrival and volume of order- the export team sends the order at the factory as the
art work is specific to the Indonesia market-Raises Sales order in SAP-Plant people
label and send it to the port.
2. Documentation: Its on the D/A system. Largely trust based.
B. Pricing strategy: $80-$100 per bottle
C. Promotion strategy: The distributor is also a sister concern of Dexa which
markets the product by participating in symposiums and conferences.
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Assumption
Assumption
The
manufacturers
$ 100
$ 100
selling price
(bases)
Distributor
Profit Margin 5%
10%
10%
and hospitals
Dispensing
fee
The prices that customer have
to pay
20% 20
----------
--------
105
120
10.50
12
--------
---------
115.50
132
11.55
13.20
---------
------------
127.05
145.20
25.41
35% 50.82
----------
-----------
152.46
196.02
There has been 20% de-growth in the Halothane sales due to maturity- decline
phase.
2) Distribution Agreement
3) Office of Foreign Assets Control (OFEC)- Iranian Transactions
Regulations
4) Sales Promotion Agreement
5) MIS Finances
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