Although the term “pharma franchise” may be unfamiliar to most people, it is a well-known term among those involved in the pharmaceutical and medical industries. In the 1990s, India was entering a new age. One sector in India was about to transform, and that was the pharmaceutical industry. The Pharma Franchise Business concept completely transformed the market, allowing small pharmaceutical enterprises and pharmaceutical specialists to grow and create their own businesses.
Business Model for Pharma Franchises
We must first comprehend the Pharma Franchise Business Concept. The Pharma Franchise Business Concept is based on a two-party business agreement. Both the seller and the supplier, Pharma Marketing Company, Pharma Manufacturing Company, Carry and Forwarding Agent, Distributor/Wholesaler, and so on are examples of suppliers. CNF, Distributors/Sales Professionals/Agencies, and stores are examples of sellers.
The seller promotes and sells products, while the supplier procures and/or manufactures it. Profit margins, promotional and advertising materials, and expenses are all agreed upon. Generally, the supplier is responsible for product investment in stock and new items, promotional inputs, and advertisement, whereas the seller is responsible for doctor’s fees, market investment, and salesperson expenses, among other things.
Reason behind the popularisation of Pharma Franchise
Low Cost of Marketing– One of the key reasons for the success of pharma franchises could be this. For a start-ups pharma company, a high marketing expense is critical. From the general manager to the medical representative, from the foreign trip to the modest presents, from C&F to the retailer, the Pharma Company has to invest a lot of money and time. The Pharma Franchise model makes the procedure more cost-effective and efficient. As a result of the pharma franchise concept’s ability to reduce direct sales manpower and expenses, franchise companies’ marketing and promotion costs are reduced.
Low Cost of Admin– For a Pharma Franchise Company, there is a smaller workforce to handle duties. Even small businesses can manage with one or two professionals. A single office may oversee the marketing for the entire country.
Small Investment– Franchise marketing is the finest chance for you if you have connections with doctors and a desire for your own work. For pharma marketing experts, the concept of a pharma franchise is similar to becoming their own boss. Starting a franchise marketing and distribution business with as little as ten thousand rupees is possible.
Profitable– Pharma franchise is one of the lucrative businesses. A franchise distributor can make a good living with little effort. After two years of self-marketing, a person could make between $50,000 and $150,000. Companies can also make a lot of money by selling franchises.
Distributed Responsibilities- If you have pharma sales experience but no understanding of manufacturing or distribution channels, a pharma franchise can provide you with the opportunity to work for yourself.
Share of Responsibilities– The product is provided by a pharmaceutical business, which then sells it to franchisees. Companies are responsible for providing products and advertising materials, whereas franchise distributors are responsible for promoting and obtaining prescriptions from doctors. It splits duties while keeping the model’s cost low.
Simple Channel of Distribution– the PCD Pharma Franchise model is based on a straightforward distribution chain. Appointing a c&f or directly to distributors could be used to distribute products. It does not necessitate any prior knowledge of distribution channel development. A person with an average understanding can simply set up a distribution system across the country.
Availability– Last but not least, the ease with which franchise firms and franchise distributors/marketing personnel can be found makes it simple to take this concept to the next level. Companies may readily locate distributors by promoting their business and distributors can easily find the franchise company information by using the Internet, medicine books, and medical newspapers, among other resources.
Future of PCD Pharma– If we consider the future of the franchise in the pharmaceutical industry, we may estimate that one new pharma franchise company is launched every day. However, with the rising pharmaceutical sector, PCD companies would find it difficult to maintain their growth. In comparison to the pre-2010 age, new regulations, DPCO, and legal modifications have made life more difficult for Pharma Franchisees.
Defamation of Pharma Franchise companies in recent years, fierce competition, shrinking margins, public and professional awareness of branded and generic products, public and professional awareness of drug manufacturing costs, unprofessional approach, and poor services are just a few of the challenges PCD companies face.
The pharmaceutical industry has been in flux in recent years. No one knows which side the camel seat is on. The Pharma Franchise business has its own set of advantages and disadvantages. However, there is little doubt that a pharma franchise is the only way for small pharmaceutical companies and businesses to compete with big corporations.
It is critical to saving the future of small and medium-sized Indian pharmaceutical companies at this time. Whatever policies the government enacts, they must consider the needs of small producers and marketers.