If consumers in rural markets can afford soaps, shampoos and more recently even water purifiers, they can afford to spend on healthcare too. Pharmaceutical firms—both Indian and foreign—have been trying to increase their presence in this market. And they are trying new models. The latest entrant to this market is Aventis Pharma Ltd. It is scaling up its pilot project, currently on in three states, and extending it to three more states. After conducting workshops for around 3,000 doctors till now, its target is to reach out to 100,000 doctors in five years.
In India, doctors are key to the pharmaceutical market as they prescribe specific medicine brands to their patients. Conventionally, firms employ a field force to market their brands to doctors. In rural areas, that would be prohibitively expensive in relation to the potential returns. So firms have devised new methods of reaching out to them. Holding workshops is one. Another is to outsource the field operations. Novartis India Ltd hires “health advisers” who go to villages and also bring doctors for health camps who prescribe medicines. Dr Reddy’s Laboratories Ltd has a contracted field force for the rural market.
Another key aspect is to keep the cost of medicines affordable for rural areas. Aventis has set up a new business unit, in which drugs will be branded under the brand name Hoechst and sold in rural markets. These will be generic drugs that are most commonly prescribed in these markets. The idea is to remain competitive compared with unbranded generics.
Graphics: Sandeep Bhatnagar / Mint
The accent at present is on infectious diseases that are more prevalent and are also cheaper to treat. But companies will be eyeing the spread of lifestyle diseases such as diabetes and cardiovascular-related ailments that are being reported to be on the rise in rural areas too.
The overall market potential seems sizeable on paper. Firms cite figures of 65% of the population not having access to medicine, and that 70% of the population lives in rural areas and account for 60% of national disposable income. And the rural market is estimated to contribute around 20% of total pharmaceutical sales. For large firms, the contribution is unlikely to be significant yet. But that will change. They just need to emulate the success of consumer goods firms, which get at least 50% of their sales in some products from the rural market.
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